Accounting HW Questions- Test3 – Flashcards
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Significant accounting policies are described in the notes to the financial statements because:
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the reader must be aware of which of the alternative generally accepted accounting practices have been used.
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Corporate governance includes concerns about:
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business ethics and social responsibility, the responsibilities of the board of directors, equitable treatment of all stakeholders, disclosures and transparency.
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An audit conducted in accordance with generally accepted auditing standards includes each of the following except:
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evaluation of the efficiency and effectiveness of management.
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The nature and content of disclosures relate to all of the following except:
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management's plans for the future.
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As the total volume of activity changes:
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the total of variable costs changes.
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An example of a cost that is likely to have a variable behavior pattern is:
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production labor wages.
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Knowledge about the behavior pattern of a cost is important to understanding the effect on net income of a change in sales volume because as sales volume changes:
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the effect on net income will depend on the behavior pattern of various costs.
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Management accounting is:
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an activity that gets involved with virtually all of the other functional areas of the organization.
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As the level of activity decreases:
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fixed cost remains constant in total.
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Which of the following statements does not describe a characteristic of management accounting?
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Management accounting must conform to GAAP.
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Selling price per unit- $100 Variable expenses per unit- $40 Fixed expenses per month- $60,000 Operating income at a volume of 4,000 units per month is:
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$180,000
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The three components of product costs are:
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direct material, direct labor, manufacturing overhead.
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Product costs are inventoried and treated as assets until:
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the period in which the products they relate to are sold.
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The cost formula for monthly customer order processing cost has been established as $100 + $0.15 per order. It is expected that 5,600 orders will be processed in May and 6,400 in June. Total order processing costs for May and June combined will be estimated to be:
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$2,000
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