question

What is the primary goal of accounting?

answer

To provide information for decision making.

question

Which of the following is not a characteristic of financial accounting? A. Financial reports are prepared according to GAAP. B. Information is used by external parties. C. Information is subjective, relevant and future-oriented. D. Reports are prepared periodically.

answer

C. Information is subjective, relevant and future-oriented.

question

Which of the following is not a characteristic of financial accounting? A. Information is reported at the decision making level. B. Information is used by external parties. C. Information is objective, reliable and historical. D. Reports are prepared periodically

answer

A. Information is reported at the decision making level.

question

Which of the following is not a characteristic of financial accounting? A. Financial reports are prepared according to GAAP. B. Information is used primarily by internal parties. C. Information is objective, reliable and historical. D. Reports are prepared periodically.

answer

B. Information is used primarily by internal parties.

question

Which of the following is not a characteristic of managerial accounting? A. Information is used by internal parties. B. Information is subjective, relevant, future-oriented. C. Reports are prepared as needed. D. Reports are prepared according to GAAP.

answer

D. Reports are prepared according to GAAP.

question

Which of the following is not a characteristic of managerial accounting? A. Information is used by external parties. B. Information is subjective, relevant, future-oriented. C. Reports are prepared as needed. D. Information is reported at the decision making level.

answer

A. Information is used by external parties.

question

Which of the following is not a characteristic of managerial accounting? A. Information is used by internal parties. B. Information is subjective, relevant, future-oriented. C. Reports are prepared as needed. D. Information is reported for the company as a whole.

answer

D. Information is reported for the company as a whole.

question

Which of the following types of reports is more characteristic of managerial accounting than financial accounting? A. An internal report used by management. B. An external report used by investors. C. A report prepared according to GAAP. D. A report prepared periodically (monthly, quarterly, annually).

answer

A. An internal report used by management.

question

Which of the following functions of management involves taking actions to implement the plan?

answer

directing/leading

question

Which of the following functions of management involves comparing actual results with budgeted results?

answer

Control

question

Which of the following functions of management involves setting short and long-term objectives and the tactics to achieve them?

answer

Planning

question

Which of the following functions of management involves arranging the necessary resources to carry out the plan?

answer

Organizing

question

Which of the following functions of management involves providing motivation to achieve results? A. Planning B. Organizing C. Directing/leading D. Control

answer

C. Directing/leading

question

Which of the following functions of management involves taking corrective action if needed? A. Planning B. Organizing C. Directing/leading D. Control

answer

D. Control

question

Which of the following functions of management involves providing feedback for future plans? A. Planning B. Organizing C. Directing/leading D. Control

answer

D. Control

question

Which of the following describes one of the Directing/Leading functions of management? A. Setting short and long-term objectives B. Comparing actual to budgeted results and taking corrective action C. Taking actions to implement the plan D. Arranging the necessary resources to carry out the plan

answer

C. Taking actions to implement the plan

question

Opportunity cost is the cost of not doing something. T/F

answer

True

question

The cost of not doing something is a(n)

answer

Opportunity Cost

question

An opportunity cost is

answer

the foregone benefit of the path not taken.

question

An out-of-pocket cost involves which of the following? A. Choosing to do one thing instead of another. B. Tracing the cost directly to a cost object. C. An actual outlay of cash. D. Determining how the cost changes with a change in activity level.

answer

C. An actual outlay of cash.

question

To earn summer money, Joe could mow lawns in his neighborhood, or he could work at a local grocery store. Which of the following is an opportunity cost of mowing lawns? A. Cash paid for gas to run the lawnmower. B. The time spent mowing the lawns. C. The wages he could have earned working at the grocery store. D. Depreciation on the lawnmower.

answer

C. The wages he could have earned working at the grocery store.

question

Out-of-pocket costs involve an actual outlay of cash. T/F

answer

True

question

Which of the following is not one of the categories used to sort costs in managerial accounting? A. Relevant or irrelevant B. Variable or fixed C. Out-of-pocket or opportunity D. Direct or indirect

answer

C. Out-of-pocket or opportunity

question

To earn summer money, Joe could mow lawns in his neighborhood, or he could work at a local grocery store. Which of the following is an out-of-pocket cost of mowing lawns? A. The use of his father's truck to get to job sites. B. The wages he could have earned working at the grocery store. C. The time spent mowing the lawns. D. Cash paid for gas to run the lawnmower.

answer

D. Cash paid for gas to run the lawnmower.

question

Which of the following cannot be an out-of-pocket cost? A. A direct cost. B. An opportunity cost. C. A variable cost. D. A period cost.

answer

B. An opportunity cost.

question

Whether a cost is treated as direct or indirect depends on whether tracing the cost is either possible or feasible. T/F

answer

True

question

An indirect cost can be readily traced to a cost object while a direct cost is traced only to manufacturing costs. T/F

answer

False

question

What determines the difference between a direct and an indirect cost?

answer

Whether it can be traced to a specific cost object.

question

Which of the following is an indirect cost of manufacturing a table made of wood and glass, for a firm that manufactures furniture?

answer

The cost of rent on the factory where the table is manufactured.

question

Indirect costs are

answer

costs that are not worth the effort to trace to a specific cost object.

question

A direct cost is one which

answer

Can be traced to a specific object.

question

Which of the following is a direct cost of manufacturing a table made of wood and glass, for a firm that manufactures furniture? A. The cost of the wood in the table. B. The cost of rent on the factory where the table is manufactured. C. The salary of the supervisor who oversees all production for the firm. D. Depreciation on the tools used to manufacture the table.

answer

A. The cost of the wood in the table.

question

Costs that can be traced to a specific cost object are

answer

Direct costs

question

A cost object is

answer

an item for which managers are trying to determine the cost.

question

A cost is $50,000 when 25,000 units are produced, and $100,000 when 50,000 units are produced. This is an example of a(n)

answer

variable cost

question

Variable costs are

answer

costs that change, in total, in direct proportion to changes in activity levels.

question

What determines the difference between a variable and a fixed cost?

answer

Whether the total cost changes when activity levels change.

question

Which of the following is an example of a variable cost for a manufacturing firm? A. The cost of rent on the factory. B. The cost of factory supervision. C. The cost of raw materials. D. The cost of depreciation on equipment.

answer

C. The cost of raw materials

question

For a cost to be relevant, it must be

answer

a different cost, but not a sunk cost

question

Which of the following is true about product and period costs? A. Product costs are usually manufacturing costs, and period costs are usually nonmanufacturing costs. B. Product costs are usually nonmanufacturing costs, and period costs are usually manufacturing costs. C. Both product and period costs are usually manufacturing costs. D. Both product and period costs are usually nonmanufacturing costs.

answer

A. Product costs are usually manufacturing costs, and period costs are usually nonmanufacturing costs.

question

When are period costs counted as inventory?

answer

Never

question

What determines the difference between a product cost and a period cost?

answer

When the cost will be matched against revenue on the income statement

question

Fixed costs stay the same, on a per-unit basis, as activity level changes. T/F

answer

False

question

Fixed costs stay the same, in total, as activity level changes. T/F

answer

True

question

Prime costs include direct materials, direct labor, and manufacturing overhead. T/F

answer

False

question

A manufacturing firm reports only manufacturing cost. T/F

answer

False

question

All manufacturing costs are treated as product costs. T/F

answer

True

question

All manufacturing costs are inventoriable costs. T/F

answer

True

question

Manufacturing costs are generally classified into which of the following categories?

answer

direct materials, direct labor, and manufacturing overhead

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