Question 1

Property taxes on the factory buildings should be charged to factory overhead.

Accepted Answer

A) True 
 B)False

Question 2

There are two basic types of cost accounting systems: manufacturing costing and merchandising costing.

Accepted Answer

A) True 
 B)False

Question 3

Production cost information is needed to assist with all of the following EXCEPT

Accepted Answer

A)  setting selling prices. 
B)  controlling production costs. 
C)  determining overhead. 
D)  determining the net income or loss. 
A)  setting selling prices. 
B)  controlling production costs. 
C)  determining overhead. 
D)  determining the net income or loss.

Question 4

Indirect wages includes the wages of employees who spend their time supervising or working in a general nature.

Accepted Answer

A) True 
 B)False

Question 5

Under a perpetual inventory system, the sale of a manufactured product requires an entry

Accepted Answer

A)  debiting Cost of Goods Sold and crediting Finished Goods. 
B)  debiting Cost of Goods Sold and crediting Work in Process. 
C)  debiting Finished Goods and crediting Work in Process. 
D)  debiting Finished Goods and crediting Cost of Goods Sold. 
A)  debiting Cost of Goods Sold and crediting Finished Goods. 
B)  debiting Cost of Goods Sold and crediting Work in Process. 
C)  debiting Finished Goods and crediting Work in Process. 
D)  debiting Finished Goods and crediting Cost of Goods Sold.

Question 6

Overapplied overhead is normally transferred to work in process inventory.

Accepted Answer

A) True 
 B)False

Question 7

Direct materials are often referred to as factory supplies.

Accepted Answer

A) True 
 B)False

Question 8

If the product is made to a customer's orders or specifications or if products are made in separately identifiable "lots" or "batches," a process cost system is appropriate.

Accepted Answer

A) True 
 B)False

Question 9

A system for accumulating detailed information about the cost of producing a product is known as a

Accepted Answer

A)  product costing system. 
B)  cost accounting system. 
C)  financial accounting system. 
D)  managerial accounting system. 
A)  product costing system. 
B)  cost accounting system. 
C)  financial accounting system. 
D)  managerial accounting system.

Question 10

Products that have been completed and are ready for sale at the end of the accounting period are known as costs of goods sold.

Accepted Answer

A) True 
 B)False

Question 11

Match the terms with the definitions.
-A system for accumulating detailed information regarding the cost of producing a product.

Accepted Answer

A) cost accounting system 
B) daily time sheet 
C) direct labor 
D) underapplied overhead 
E) factory overhead
F)predetermined overhead rate
G)Materials Inventory
H)finished goods ledger
I)indirect labor
J)job cost ledger 
A) cost accounting system 
B) daily time sheet 
C) direct labor 
D) underapplied overhead 
E) factory overhead
F)predetermined overhead rate
G)Materials Inventory
H)finished goods ledger
I)indirect labor
J)job cost ledger

Question 12

When direct and indirect materials are issued into production from storage, an entry is made

Accepted Answer

A)  debiting Work in Process, debiting Factory Overhead, and crediting Materials. 
B)  debiting Work in Process and crediting Materials. 
C)  debiting Materials, crediting Work in Process, and crediting Factory Overhead. 
D)  debiting Factory Overhead, crediting Work in Process, and crediting Materials. 
A)  debiting Work in Process, debiting Factory Overhead, and crediting Materials. 
B)  debiting Work in Process and crediting Materials. 
C)  debiting Materials, crediting Work in Process, and crediting Factory Overhead. 
D)  debiting Factory Overhead, crediting Work in Process, and crediting Materials.

Question 13

The main difference in the financial statements of a manufacturing business and a merchandiser is the cost of goods sold section of the income statement and the inventories on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

Items acquired that either become a part of the finished product or are used in the process of manufacturing the finished product are known as materials.

Accepted Answer

A) True 
 B)False

Question 15

Match the terms with the definitions.
-The wages and salaries of employees who devote their time to supervision or to work of a general nature.

Accepted Answer

A) cost accounting system 
B) daily time sheet 
C) direct labor 
D) underapplied overhead 
E) factory overhead
F)predetermined overhead rate
G)Materials Inventory
H)finished goods ledger
I)indirect labor
J)job cost ledger 
A) cost accounting system 
B) daily time sheet 
C) direct labor 
D) underapplied overhead 
E) factory overhead
F)predetermined overhead rate
G)Materials Inventory
H)finished goods ledger
I)indirect labor
J)job cost ledger

Question 16

Match the terms with the definitions.
-Those materials that enter into and become a major part of the finished product.

Accepted Answer

A) Work in Process 
B) process cost system 
C) overapplied overhead 
D) direct materials 
E) materials requisition
F)factory overhead subsidiary ledger
G)Finished Goods Inventory
H)materials ledger
I)job order cost system
J)indirect materials
K)job cost sheet 
A) Work in Process 
B) process cost system 
C) overapplied overhead 
D) direct materials 
E) materials requisition
F)factory overhead subsidiary ledger
G)Finished Goods Inventory
H)materials ledger
I)job order cost system
J)indirect materials
K)job cost sheet

Question 17

Materials and direct labor flow into which of the following accounts?

Accepted Answer

A)  finished goods 
B)  work in process 
C)  cost of goods sold 
D)  operating expenses 
A)  finished goods 
B)  work in process 
C)  cost of goods sold 
D)  operating expenses

Question 18

Match the terms with the definitions.
-A record of the time worked and labor cost incurred on each job.

Accepted Answer

A) cost accounting system 
B) daily time sheet 
C) direct labor 
D) underapplied overhead 
E) factory overhead
F)predetermined overhead rate
G)Materials Inventory
H)finished goods ledger
I)indirect labor
J)job cost ledger 
A) cost accounting system 
B) daily time sheet 
C) direct labor 
D) underapplied overhead 
E) factory overhead
F)predetermined overhead rate
G)Materials Inventory
H)finished goods ledger
I)indirect labor
J)job cost ledger

Question 19

To apply factory overhead to work in process, an entry is made

Accepted Answer

A)  debiting Factory Overhead and crediting Work in Process. 
B)  debiting Work in Process and crediting Factory Overhead. 
C)  debiting Cost of Goods Sold and crediting Work in Process. 
D)  debiting Factory Overhead and crediting Cost of Goods Sold. 
A)  debiting Factory Overhead and crediting Work in Process. 
B)  debiting Work in Process and crediting Factory Overhead. 
C)  debiting Cost of Goods Sold and crediting Work in Process. 
D)  debiting Factory Overhead and crediting Cost of Goods Sold.

Question 20

The inventory accounts used in a manufacturing business are

Accepted Answer

A)  merchandise, materials, and work in process. 
B)  materials, work in process, and finished goods. 
C)  merchandise, materials, and finished goods. 
D)  merchandise, work in process, and finished goods. 
A)  merchandise, materials, and work in process. 
B)  materials, work in process, and finished goods. 
C)  merchandise, materials, and finished goods. 
D)  merchandise, work in process, and finished goods.

Exam 26: Manufacturing Accounting: The Job Order Cost System

Property taxes on the factory buildings should be charged to factory overhead.

There are two basic types of cost accounting systems: manufacturing costing and merchandising costing.

Production cost information is needed to assist with all of the following EXCEPT

Indirect wages includes the wages of employees who spend their time supervising or working in a general nature.

Under a perpetual inventory system, the sale of a manufactured product requires an entry

Overapplied overhead is normally transferred to work in process inventory.

Direct materials are often referred to as factory supplies.

If the product is made to a customer's orders or specifications or if products are made in separately identifiable "lots" or "batches," a process cost system is appropriate.

A system for accumulating detailed information about the cost of producing a product is known as a

Products that have been completed and are ready for sale at the end of the accounting period are known as costs of goods sold.

Match the terms with the definitions. -A system for accumulating detailed information regarding the cost of producing a product.

When direct and indirect materials are issued into production from storage, an entry is made

The main difference in the financial statements of a manufacturing business and a merchandiser is the cost of goods sold section of the income statement and the inventories on the balance sheet.

Items acquired that either become a part of the finished product or are used in the process of manufacturing the finished product are known as materials.

Match the terms with the definitions. -The wages and salaries of employees who devote their time to supervision or to work of a general nature.

Match the terms with the definitions. -Those materials that enter into and become a major part of the finished product.

Materials and direct labor flow into which of the following accounts?

Match the terms with the definitions. -A record of the time worked and labor cost incurred on each job.

To apply factory overhead to work in process, an entry is made

The inventory accounts used in a manufacturing business are

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Work Sheet and Financial Statements

Filters