Question 1

Which of the following costs should be recorded as an expense?

Accepted Answer

A)  Salary of administrative employee 
B)  Depreciation of manufacturing equipment 
C)  Insurance for the factory building 
D)  All of these are expenses. 
A)  Salary of administrative employee 
B)  Depreciation of manufacturing equipment 
C)  Insurance for the factory building 
D)  All of these are expenses. A

Question 2

How does the Sarbanes-Oxley Act of 2002 affect the responsibilities of the managers of publicly held US corporations?

Accepted Answer

Under the terms of the Act,the chief executive officer and chief financial officer are responsible for development and enforcement of a strong set of internal controls.The company must report on the effectiveness of its internal controls.The CEO and CFO have ultimate responsibility for the accuracy of the company's financial statements.They must certify that,to their knowledge,the financial statements do not include False information or omit information that would be material.The managers of the company are required to establish a code of ethics and to report on the code of ethics in the 10K annual report filed with the Securities and Exchange Commission.Managers are also required to provide mechanisms for anonymous reporting of fraud within the company (to protect a potential whistleblower).

Question 3

The Sarbanes Oxley Act of 2002:

Accepted Answer

A)  prohibits CPA's from becoming managerial accountants. 
B)  created Generally Accepted Accounting principles (GAAP). 
C)  requires the CEO and CFO to defer responsibility for internal controls to external auditors. 
D)  requires management to establish a whistleblower policy. 
A)  prohibits CPA's from becoming managerial accountants. 
B)  created Generally Accepted Accounting principles (GAAP). 
C)  requires the CEO and CFO to defer responsibility for internal controls to external auditors. 
D)  requires management to establish a whistleblower policy. D

Question 4

A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers.Its product costs were $2,550.

Accepted Answer

A) True 
 B)False

Question 5

Select the incorrect statement regarding service companies.

Accepted Answer

A)  Because service companies do not carry inventory, it is impossible to determine product costs. 
B)  Because the products of service companies are consumed immediately, there is no finished goods inventory on their balance sheets. 
C)  Managers of service companies are expected to control costs, improve quality, and increase productivity just like managers of manufacturing companies. 
D)  Material, labor, and overhead costs of service companies are treated as period costs. 
A)  Because service companies do not carry inventory, it is impossible to determine product costs. 
B)  Because the products of service companies are consumed immediately, there is no finished goods inventory on their balance sheets. 
C)  Managers of service companies are expected to control costs, improve quality, and increase productivity just like managers of manufacturing companies. 
D)  Material, labor, and overhead costs of service companies are treated as period costs.

Question 6

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

Accepted Answer

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

Question 7

A just-in-time system can lower inventory holding costs and increase customer satisfaction.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is not a provision of the Sarbanes-Oxley Act of 2002?

Accepted Answer

A)  The chief executive officer and the chief financial officer are jointly responsible for establishment and enforcement of internal controls. 
B)  Companies are required to report on the effectiveness of their internal controls. 
C)  The company's external auditor is charged with the ultimate responsibility for the accuracy of the company's financial statements and accompanying footnotes. 
D)  The company's external auditors are required to attest to the accuracy of the internal controls report. 
A)  The chief executive officer and the chief financial officer are jointly responsible for establishment and enforcement of internal controls. 
B)  Companies are required to report on the effectiveness of their internal controls. 
C)  The company's external auditor is charged with the ultimate responsibility for the accuracy of the company's financial statements and accompanying footnotes. 
D)  The company's external auditors are required to attest to the accuracy of the internal controls report.

Question 9

The Szakos Company engaged in the following transactions during the current year:
a)Acquired $50,000 of cash by issuing common stock to owners
b)Paid $10,000 to acquire manufacturing equipment
c)Paid $5,000 cash for materials used in production
d)Paid $2,000 for wages of production workers
e)Paid $8,000 in general,selling,and administrative costs
f)Recognized $1,000 of depreciation on the manufacturing equipment
g)Sold inventory for $18,000 cash
h)The cost of the inventory sold was $6,500
Required:
Show the balance sheet and income statement effects of the transactions by completing the financial statement model provided.

Accepted Answer

The answer of The Szakos Company engaged in the following...

Question 10

What costs are treated as product costs for a manufacturing company?

Accepted Answer

Product costs for a manufactur

Question 11

The four Standards of Ethical Conduct for Management Accountants relate to competence,confidentiality,integrity,and objectivity.

Accepted Answer

A) True 
 B)False

Question 12

Costs such as transportation-out,sales commissions,uncollectible accounts receivable,and advertising costs are sometimes called:

Accepted Answer

A)  upstream costs. 
B)  downstream costs. 
C)  direct costs. 
D)  indirect costs. 
A)  upstream costs. 
B)  downstream costs. 
C)  direct costs. 
D)  indirect costs.

Question 13

If product costs are misclassified as selling costs,the average cost per unit will be understated.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not an element that is typically present when fraud occurs?

Accepted Answer

A)  Separating duties 
B)  Opportunity 
C)  Pressure 
D)  Rationalize 
A)  Separating duties 
B)  Opportunity 
C)  Pressure 
D)  Rationalize

Question 15

What part do management accountants play in corporate governance?

Accepted Answer

Management accountants are the guardians

Question 16

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

Accepted Answer

A)  Assets decrease by $200 and stockholders' equity decreases by $200. 
B)  Assets and stockholders' equity do not change. 
C)  Assets increase by $200 and stockholders' equity increases by $200. 
D)  Assets increase by $200 and stockholders' equity does not change. 
A)  Assets decrease by $200 and stockholders' equity decreases by $200. 
B)  Assets and stockholders' equity do not change. 
C)  Assets increase by $200 and stockholders' equity increases by $200. 
D)  Assets increase by $200 and stockholders' equity does not change.

Question 17

Unlike direct material and direct labor costs,overhead costs must be allocated to products.

Accepted Answer

A) True 
 B)False

Question 18

Select the correct statement regarding managerial and financial accounting.

Accepted Answer

A)  Users of managerial accounting information desire greater aggregation than do users of financial accounting information. 
B)  Both managerial and financial accounting use economic and physical data in addition to financial data. 
C)  Financial accounting is more highly regulated than managerial accounting. 
D)  Timeliness is more important in financial accounting than in managerial accounting. 
A)  Users of managerial accounting information desire greater aggregation than do users of financial accounting information. 
B)  Both managerial and financial accounting use economic and physical data in addition to financial data. 
C)  Financial accounting is more highly regulated than managerial accounting. 
D)  Timeliness is more important in financial accounting than in managerial accounting.

Question 19

Costs associated with holding inventory include hidden costs,such as low employee motivation.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following costs is not considered a period cost?

Accepted Answer

A)  Warehousing costs 
B)  Depreciation of delivery vehicles 
C)  Salaries paid to company executives 
D)  Freight paid on a purchase of raw materials 
A)  Warehousing costs 
B)  Depreciation of delivery vehicles 
C)  Salaries paid to company executives 
D)  Freight paid on a purchase of raw materials

Which of the following costs should be recorded as an expense?

How does the Sarbanes-Oxley Act of 2002 affect the responsibilities of the managers of publicly held US corporations?

The Sarbanes Oxley Act of 2002:

A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers.Its product costs were $2,550.

Select the incorrect statement regarding service companies.

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

A just-in-time system can lower inventory holding costs and increase customer satisfaction.

Which of the following is not a provision of the Sarbanes-Oxley Act of 2002?

What costs are treated as product costs for a manufacturing company?

The four Standards of Ethical Conduct for Management Accountants relate to competence,confidentiality,integrity,and objectivity.

Costs such as transportation-out,sales commissions,uncollectible accounts receivable,and advertising costs are sometimes called:

If product costs are misclassified as selling costs,the average cost per unit will be understated.

Which of the following is not an element that is typically present when fraud occurs?

What part do management accountants play in corporate governance?

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

Unlike direct material and direct labor costs,overhead costs must be allocated to products.

Select the correct statement regarding managerial and financial accounting.

Costs associated with holding inventory include hidden costs,such as low employee motivation.

Which of the following costs is not considered a period cost?

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

Which of the following costs should be recorded as an expense?

How does the Sarbanes-Oxley Act of 2002 affect the responsibilities of the managers of publicly held US corporations?

The Sarbanes Oxley Act of 2002:

A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its customers.Its product costs were $2,550.

Select the incorrect statement regarding service companies.

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

A just-in-time system can lower inventory holding costs and increase customer satisfaction.

Which of the following is not a provision of the Sarbanes-Oxley Act of 2002?

What costs are treated as product costs for a manufacturing company?

The four Standards of Ethical Conduct for Management Accountants relate to competence,confidentiality,integrity,and objectivity.

Costs such as transportation-out,sales commissions,uncollectible accounts receivable,and advertising costs are sometimes called:

If product costs are misclassified as selling costs,the average cost per unit will be understated.

Which of the following is not an element that is typically present when fraud occurs?

What part do management accountants play in corporate governance?

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

Unlike direct material and direct labor costs,overhead costs must be allocated to products.

Select the correct statement regarding managerial and financial accounting.

Costs associated with holding inventory include hidden costs,such as low employee motivation.

Which of the following costs is not considered a period cost?

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