ACCT 201 QUIZ 4 WITH CORRECT
ANSWERS
Managerial accounting differs from financial accounting in that ______.
A. financial accounting does not have to conform to GAAP and managerial accounting
does
B. the primary purpose of managerial accounting is to prepare reports for internal users
of accounting information
C. the primary purpose of financial accounting is to prepare future oriented reports
D. the primary purpose of managerial accounting is to prepare reports for the Securities
and Exchange Commission (SEC) - Answer- B. the primary purpose of managerial
accounting is to prepare reports for internal users of accounting information
Product costs differ from period costs because ______.
A. period costs are not considered part of operating expenses for a manufacturing
company
B. period costs increase inventory whereas product costs do not
C. product costs may appear on the balance sheet as assets
D. product costs are expenses for manufacturing companies and period costs are
expenses for service organizations - Answer- C. product costs may appear on the
balance sheet as assets
For a merchandiser, ____________ Inventory plus _____________ equals Cost of
Goods Available for Sale. Cost of Goods Available for Sale less ___________
___________ equals Cost of Goods Sold. - Answer- Beginning, Purchases, Ending,
Inventory
Which of the following financial statement line items would be found on a manufacturer's
financial statement but not on a merchandiser or service company's? (Select all that
apply.)
Work-in-process Inventory
Finished Goods Inventory
Raw Materials Inventory
Cost of Goods Sold - Answer- Work-in-process Inventory
Finished Goods Inventory
Raw Materials Inventory
, Which of the following accounts would be a product cost rather than a period cost?
(Select all that apply.)
Depreciation on manufacturing machinery
Wages of sales persons
Production manager's salary
Insurance on factory assets
Human resources overhead
Shipping costs on purchases of inventory - Answer- Depreciation on manufacturing
machinery
Production manager's salary
Insurance on factory assets
Shipping costs on purchases of inventory
All of the following companies would most likely use process costing EXCEPT
A. Ryan Homebuilders, Inc.
B. Coca Cola
C. Dupont Chemicals
D. Campbell's Soups - Answer- A. Ryan Homebuilders, Inc.
A company's balance sheet shows inventory of Raw Materials, Work-in-process, and
Finished Goods. This company is a ______.
A. Manufacturer
B. Merchandiser
C. Service business
D. None of these are correct because these line items are not found on any balance
sheets. - Answer- A. Manufacturer
The costs of all jobs completed but not yet sold are in the ______ Inventory account.
A. Raw Materials
B. Work-in-Process
C. Finished Goods
D. Good Available for Sale - Answer- C. Finished Goods
Which of the following are characteristics of financial accounting reports? Select all that
apply.
A. Reports are for those external to the company
B. Reports are historical, current, and future oriented
C. Reports include job costing information
D. Reports are highly summarized and report on the company as a whole - Answer- A.
Reports are for those external to the company
ANSWERS
Managerial accounting differs from financial accounting in that ______.
A. financial accounting does not have to conform to GAAP and managerial accounting
does
B. the primary purpose of managerial accounting is to prepare reports for internal users
of accounting information
C. the primary purpose of financial accounting is to prepare future oriented reports
D. the primary purpose of managerial accounting is to prepare reports for the Securities
and Exchange Commission (SEC) - Answer- B. the primary purpose of managerial
accounting is to prepare reports for internal users of accounting information
Product costs differ from period costs because ______.
A. period costs are not considered part of operating expenses for a manufacturing
company
B. period costs increase inventory whereas product costs do not
C. product costs may appear on the balance sheet as assets
D. product costs are expenses for manufacturing companies and period costs are
expenses for service organizations - Answer- C. product costs may appear on the
balance sheet as assets
For a merchandiser, ____________ Inventory plus _____________ equals Cost of
Goods Available for Sale. Cost of Goods Available for Sale less ___________
___________ equals Cost of Goods Sold. - Answer- Beginning, Purchases, Ending,
Inventory
Which of the following financial statement line items would be found on a manufacturer's
financial statement but not on a merchandiser or service company's? (Select all that
apply.)
Work-in-process Inventory
Finished Goods Inventory
Raw Materials Inventory
Cost of Goods Sold - Answer- Work-in-process Inventory
Finished Goods Inventory
Raw Materials Inventory
, Which of the following accounts would be a product cost rather than a period cost?
(Select all that apply.)
Depreciation on manufacturing machinery
Wages of sales persons
Production manager's salary
Insurance on factory assets
Human resources overhead
Shipping costs on purchases of inventory - Answer- Depreciation on manufacturing
machinery
Production manager's salary
Insurance on factory assets
Shipping costs on purchases of inventory
All of the following companies would most likely use process costing EXCEPT
A. Ryan Homebuilders, Inc.
B. Coca Cola
C. Dupont Chemicals
D. Campbell's Soups - Answer- A. Ryan Homebuilders, Inc.
A company's balance sheet shows inventory of Raw Materials, Work-in-process, and
Finished Goods. This company is a ______.
A. Manufacturer
B. Merchandiser
C. Service business
D. None of these are correct because these line items are not found on any balance
sheets. - Answer- A. Manufacturer
The costs of all jobs completed but not yet sold are in the ______ Inventory account.
A. Raw Materials
B. Work-in-Process
C. Finished Goods
D. Good Available for Sale - Answer- C. Finished Goods
Which of the following are characteristics of financial accounting reports? Select all that
apply.
A. Reports are for those external to the company
B. Reports are historical, current, and future oriented
C. Reports include job costing information
D. Reports are highly summarized and report on the company as a whole - Answer- A.
Reports are for those external to the company
