Question 1

The Sarbanes-Oxley Act allows,but does not require,a corporation to establish a whistleblower policy.

Accepted Answer

A) True 
 B)False

Question 2

Anton believes his company's overhead costs are driven (affected)by the number of machine hours because the production process is heavily automated.During the period,the company produced 3,000 units of Product A requiring a total of 100 machine hours and 2,000 units of Product B requiring a total of 25 machine hours.What allocation rate should be used if the company incurs overhead costs of $10,000?

Accepted Answer

A)  $2 per unit 
B)  $2 per machine hour 
C)  $80 per unit 
D)  $80 per machine hour 
A)  $2 per unit 
B)  $2 per machine hour 
C)  $80 per unit 
D)  $80 per machine hour

Question 3

Depreciation on manufacturing equipment is an indirect product cost,while depreciation on office equipment is a period cost.

Accepted Answer

A) True 
 B)False

Question 4

Opportunity,pressure and rationalization are the three elements of the fraud triangle.

Accepted Answer

A) True 
 B)False

Question 5

Randall Company manufactures chocolate bars.The following were among Randall's manufacturing costs during the current year: $\begin{array}{c}
\begin{array}{lll}
\underline{\text {  Wages}} \
\text { Machine operators}\
\text { Selling and administrative personnel}\  
\end{array}
\begin{array}{lll}
\
\$300,000\
\$75,000
\end{array}
\end{array}$

$\begin{array}{c}
\begin{array}{lll}
\underline{\text { Materials used}}\ 
\text { Lubricant for oiling machinery}\
\text { Cocoa, sugar, and other raw materials}\
\text { Packaging materials}\ 
\end{array}
\begin{array}{lll}
\
\$25,000\
\$225,000\
\$190,000
\end{array}
\end{array}$

Randall's direct materials amounted to:

Accepted Answer

A)  $25,000 
B)  $225,000 
C)  $250,000 
D)  $475,000 
A)  $25,000 
B)  $225,000 
C)  $250,000 
D)  $475,000

Question 6

For what activities do an organization's managers need accounting information?

Accepted Answer

Answers will vary
Managers of

Question 7

Assuming a company's inventory increased during the period,which of the following misclassifications may increase net income?

Accepted Answer

A)  Recording administrative salaries as a product cost 
B)  Recording depreciation on production equipment as an expense 
C)  Expensing raw material costs instead of including them in inventory 
D)  Recording depreciation on production equipment as an expense and Expensing raw material costs instead of including them in inventory 
A)  Recording administrative salaries as a product cost 
B)  Recording depreciation on production equipment as an expense 
C)  Expensing raw material costs instead of including them in inventory 
D)  Recording depreciation on production equipment as an expense and Expensing raw material costs instead of including them in inventory

Question 8

The objective of a just-in-time inventory system is to totally eliminate all inventories.

Accepted Answer

A) True 
 B)False

Question 9

If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:

Accepted Answer

A)  net income will be overstated. 
B)  total assets will be understated. 
C)  gross margin will be understated. 
D)  Both net income will be overstated and gross margin will be understated. 
A)  net income will be overstated. 
B)  total assets will be understated. 
C)  gross margin will be understated. 
D)  Both net income will be overstated and gross margin will be understated.

Question 10

Which of following practices is not considered an effective means of reengineering business systems?

Accepted Answer

A)  Identifying the best practices used by world-class competitors 
B)  Improving the accuracy of cost allocations 
C)  Increasing non-value added activities 
D)  All of these are effective means of reengineering business systems. 
A)  Identifying the best practices used by world-class competitors 
B)  Improving the accuracy of cost allocations 
C)  Increasing non-value added activities 
D)  All of these are effective means of reengineering business systems.

Question 11

According to the Sarbanes-Oxley Act,a company's audit committee is responsible for its system of internal controls.

Accepted Answer

A) True 
 B)False

Question 12

What is the effect on the balance sheet of making cash sales of inventory to customers on profit?

Accepted Answer

A)  Assets and equity increase. 
B)  Assets and equity decrease. 
C)  Assets decrease and equity increases. 
D)  Assets increase and equity decreases. 
A)  Assets and equity increase. 
B)  Assets and equity decrease. 
C)  Assets decrease and equity increases. 
D)  Assets increase and equity decreases.

Question 13

Costs associated with holding inventory often include:

Accepted Answer

A)  theft,damage,and obsolescence. 
B)  financing. 
C)  warehouse space. 
D)  supervision. 
E)  All of these. 
A)  theft,damage,and obsolescence. 
B)  financing. 
C)  warehouse space. 
D)  supervision. 
E)  All of these.

Question 14

How does the level of aggregation differ between financial accounting information and managerial accounting information?

Accepted Answer

Answers will vary
Most financial account

Question 15

Select the term from the list provided that best matches each of the following descriptions.The first is done for you.

Accepted Answer

The answer of Select the term from the list provided...

Question 16

The benefits of a just-in-time system would include all of the following except:

Accepted Answer

A)  increased warehousing costs. 
B)  reduced inventory holding costs. 
C)  improved customer satisfaction. 
D)  decrease in the number of suppliers. 
A)  increased warehousing costs. 
B)  reduced inventory holding costs. 
C)  improved customer satisfaction. 
D)  decrease in the number of suppliers.

Question 17

Which of the following transactions would cause net income for the period to decrease?

Accepted Answer

A)  Paid $2,500 cash for raw material cost 
B)  Purchased $8,000 of merchandise inventory 
C)  Recorded $5,000 of depreciation on production equipment 
D)  Used $2,000 of office supplies 
A)  Paid $2,500 cash for raw material cost 
B)  Purchased $8,000 of merchandise inventory 
C)  Recorded $5,000 of depreciation on production equipment 
D)  Used $2,000 of office supplies

Question 18

For a manufacturing company,both direct labor costs and indirect labor costs are classified as product costs.

Accepted Answer

A) True 
 B)False

Question 19

Select the incorrect statement regarding costs and expenses.

Accepted Answer

A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred. 
A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred.

Question 20

Just in time systems can be used by both manufacturing and merchandising companies.

Accepted Answer

A) True 
 B)False

The Sarbanes-Oxley Act allows,but does not require,a corporation to establish a whistleblower policy.

Depreciation on manufacturing equipment is an indirect product cost,while depreciation on office equipment is a period cost.

Opportunity,pressure and rationalization are the three elements of the fraud triangle.

For what activities do an organization's managers need accounting information?

Assuming a company's inventory increased during the period,which of the following misclassifications may increase net income?

The objective of a just-in-time inventory system is to totally eliminate all inventories.

If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:

Which of following practices is not considered an effective means of reengineering business systems?

According to the Sarbanes-Oxley Act,a company's audit committee is responsible for its system of internal controls.

What is the effect on the balance sheet of making cash sales of inventory to customers on profit?

Costs associated with holding inventory often include:

How does the level of aggregation differ between financial accounting information and managerial accounting information?

Select the term from the list provided that best matches each of the following descriptions.The first is done for you.

The benefits of a just-in-time system would include all of the following except:

Which of the following transactions would cause net income for the period to decrease?

For a manufacturing company,both direct labor costs and indirect labor costs are classified as product costs.

Select the incorrect statement regarding costs and expenses.

Just in time systems can be used by both manufacturing and merchandising companies.

Cost Behavior, Operating Leverage, and Profitability Analysis

Analysis of Cost,Volume,and Pricing to Increase Profitability

Cost Accumulation,Tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, Process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters

Exam 1: Management Accounting and Corporate Governance

The Sarbanes-Oxley Act allows,but does not require,a corporation to establish a whistleblower policy.

Depreciation on manufacturing equipment is an indirect product cost,while depreciation on office equipment is a period cost.

Opportunity,pressure and rationalization are the three elements of the fraud triangle.

For what activities do an organization's managers need accounting information?

Assuming a company's inventory increased during the period,which of the following misclassifications may increase net income?

The objective of a just-in-time inventory system is to totally eliminate all inventories.

If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:

Which of following practices is not considered an effective means of reengineering business systems?

According to the Sarbanes-Oxley Act,a company's audit committee is responsible for its system of internal controls.

What is the effect on the balance sheet of making cash sales of inventory to customers on profit?

Costs associated with holding inventory often include:

How does the level of aggregation differ between financial accounting information and managerial accounting information?

Select the term from the list provided that best matches each of the following descriptions.The first is done for you.

The benefits of a just-in-time system would include all of the following except:

Which of the following transactions would cause net income for the period to decrease?

For a manufacturing company,both direct labor costs and indirect labor costs are classified as product costs.

Select the incorrect statement regarding costs and expenses.

Just in time systems can be used by both manufacturing and merchandising companies.

Cost Behavior, Operating Leverage, and Profitability Analysis

Analysis of Cost,Volume,and Pricing to Increase Profitability

Cost Accumulation,Tracing,and Allocation

Cost Management in an Automated Business Environment: ABC, ABM, and TQM

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Responsibility Accounting

Planning for Capital Investments

Product Costing in Service and Manufacturing Entities

Job-Order, Process, and Hybrid Costing Systems

Financial Statement Analysis

Statement of Cash Flows

Filters