Question 1

A job order cost system and a process cost system are two alternative methods for valuing inventories.

Accepted Answer

A) True 
 B)False

Question 2

The Purchases account is credited for all raw materials purchase returns and allowances.

Accepted Answer

A) True 
 B)False

Question 3

Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory.

Accepted Answer

A) True 
 B)False

Question 4

At the end of the year the accountant credits the amount of the overapplied overhead to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 5

If actual overhead is less than applied manufacturing overhead then manufacturing overhead is:

Accepted Answer

A)  underapplied. 
B)  overapplied. 
C)  a loss on the income statement under "Other Expenses and Losses." 
D)  considered a miscellaneous expense. 
A)  underapplied. 
B)  overapplied. 
C)  a loss on the income statement under "Other Expenses and Losses." 
D)  considered a miscellaneous expense.

Question 6

If Manufacturing Overhead has a credit balance at the end of the period then

Accepted Answer

A)  overhead has been underapplied. 
B)  the overhead assigned to Work in Process Inventory is less than the overhead incurred. 
C)  overhead has been overapplied. 
D)  management must take corrective action. 
A)  overhead has been underapplied. 
B)  the overhead assigned to Work in Process Inventory is less than the overhead incurred. 
C)  overhead has been overapplied. 
D)  management must take corrective action.

Question 7

Finished Goods Inventory is charged for the cost of jobs completed during a period.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not included in factory labor costs?

Accepted Answer

A)  Gross earnings. 
B)  Employer payroll taxes. 
C)  Fringe benefits. 
D)  All of these are included. 
A)  Gross earnings. 
B)  Employer payroll taxes. 
C)  Fringe benefits. 
D)  All of these are included.

Question 9

The manufacturing operations of Beatly Inc. had the following balances for the month of January: $\begin{array}{lrr}
&\text { January 1}&\text { January 31}\
\text { Raw materials } & \$ 12,000 & \$ 13,000 \
\text { Work in process } & 21,000 & 23,000 \
\text { Finished goods } & 14,000 & 12,000
\end{array}$
 Beatly transferred $270000 of completed goods out of work in process during January.
Instructions
Compute the cost of goods sold for January.

Accepted Answer

$14000 + $

Question 10

If manufacturing overhead has been overapplied during the year the adjusting entry at the end of the year will show a

Accepted Answer

A)  debit to Manufacturing Overhead. 
B)  credit to Finished Goods Inventory 
C)  debit to Cost of Goods Sold. 
D)  credit to Work in Process Inventory. 
A)  debit to Manufacturing Overhead. 
B)  credit to Finished Goods Inventory 
C)  debit to Cost of Goods Sold. 
D)  credit to Work in Process Inventory.

Question 11

Which of the following is one of the components of cost accounting?

Accepted Answer

A)  It involves measuring product costs. 
B)  It involves the determination of company profits. 
C)  It requires GAAP to be applied. 
D)  It requires cost minimizing principles. 
A)  It involves measuring product costs. 
B)  It involves the determination of company profits. 
C)  It requires GAAP to be applied. 
D)  It requires cost minimizing principles.

Question 12

Materials requisition slips are costed

Accepted Answer

A)  by production supervisors. 
B)  by factory personnel who work on the production line. 
C)  after the goods have been sold. 
D)  using any of the inventory costing methods. 
A)  by production supervisors. 
B)  by factory personnel who work on the production line. 
C)  after the goods have been sold. 
D)  using any of the inventory costing methods.

Question 13

A selected list of accounts used by Cline Manufacturing Company follows: $$\begin{array} { l c l } 
\text { Code } & \text { Code } \
\text { A Cash } & \text { F } & \text { Accounts Payable } \
\text { B Accounts Receivable } & \text { G } & \text { Factory Labor } \
\text { C RawMaterials Inventory } & \text { H } & \text { Manufacturing Overhead } \
\text { D Work In Process Inventory } & \text { I } & \text {Cost of Goods Sold } \
\text { E Finished Goods Inventory } & \text { J } & \text {Sales Revenue }
\end{array}$$ Cline Manufacturing Company uses a job order system and maintains perpetual inventory records.
Instructions
Place the appropriate code letter in the columns indicating the appropriate account(s) to be debited and credited for the transactions listed below.

Accepted Answer

The answer of A selected list of accounts used by...

Question 14

The Manufacturing Overhead account shows debits of $30000 $24000 and $28000 and one credit for $86000. Based on this information manufacturing overhead

Accepted Answer

A)  has been overapplied. 
B)  has been underapplied. 
C)  has not been applied. 
D)  shows a zero balance. 
A)  has been overapplied. 
B)  has been underapplied. 
C)  has not been applied. 
D)  shows a zero balance.

Question 15

Cost accounting involves the measuring recording and reporting of ______________ costs.

Accepted Answer

The answer of Cost accounting involves the measuring recording and...

Question 16

Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?

Accepted Answer

A)  The total of the amounts transferred from raw materials for the current period 
B)  The sum of the costs shown on the job cost sheets of unfinished jobs 
C)  The total of manufacturing overhead applied to work in process for the period 
D)  The total manufacturing costs for the period 
A)  The total of the amounts transferred from raw materials for the current period 
B)  The sum of the costs shown on the job cost sheets of unfinished jobs 
C)  The total of manufacturing overhead applied to work in process for the period 
D)  The total manufacturing costs for the period

Question 17

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

Accepted Answer

A)  actual overhead rate. 
B)  estimated overhead rate. 
C)  assigned overhead rate. 
D)  predetermined overhead rate. 
A)  actual overhead rate. 
B)  estimated overhead rate. 
C)  assigned overhead rate. 
D)  predetermined overhead rate.

Question 18

Requisitions for direct materials are posted daily to the individual job cost sheets.

Accepted Answer

A) True 
 B)False

Question 19

The flow of costs in a job order cost system

Accepted Answer

A)  involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done. 
B)  cannot be measured until all jobs are complete. 
C)  measures product costs for a set time period. 
D)  generally follows a LIFO cost flow assumption. 
A)  involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done. 
B)  cannot be measured until all jobs are complete. 
C)  measures product costs for a set time period. 
D)  generally follows a LIFO cost flow assumption.

Question 20

Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.

Accepted Answer

A) True 
 B)False

Exam 20: Job Order Costing

A job order cost system and a process cost system are two alternative methods for valuing inventories.

The Purchases account is credited for all raw materials purchase returns and allowances.

Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory.

At the end of the year the accountant credits the amount of the overapplied overhead to Cost of Goods Sold.

If actual overhead is less than applied manufacturing overhead then manufacturing overhead is:

If Manufacturing Overhead has a credit balance at the end of the period then

Finished Goods Inventory is charged for the cost of jobs completed during a period.

Which of the following is not included in factory labor costs?

If manufacturing overhead has been overapplied during the year the adjusting entry at the end of the year will show a

Which of the following is one of the components of cost accounting?

Materials requisition slips are costed

The Manufacturing Overhead account shows debits of $30000 $24000 and $28000 and one credit for $86000. Based on this information manufacturing overhead

Cost accounting involves the measuring recording and reporting of ______________ costs.

Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

Requisitions for direct materials are posted daily to the individual job cost sheets.

The flow of costs in a job order cost system

Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

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