,Fundamental Managerial Accounting Concepts, 9e (Edmonds) Ch xz xz xz xz xz xz
apter 1 Management Accounting and Corporate Governance
xz x z xz xz xz xz
1) Ashley Bradshaw is the manager of one department in a large store. In this capacity, which
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
of the following kinds of information would she be interested in?
xz xz xz xz xz xz xz xz xz xz
A) Economic data xz
B) Financial data xz
C) Nonfinancial data xz
D) Financial, economic, and nonfinancial data xz xz xz xz
2) All of the following are features of managerial accounting except:
xz xz xz xz xz xz xz xz xz
A) information is provided primarily to insiders such as managers. xz xz xz xz xz xz xz xz
B) information includes economic and non-financial data as well as financial data.
xz xz xz xz xz xz xz xz xz xz
C) information is characterized by objectivity, reliability, consistency, and accuracy.
xz xz xz xz xz xz xz xz
D) information is reported continuously with a present or future orientation.
xz xz xz xz xz xz xz xz xz
3) Choose the answer that is not a distinguishing characteristic of financial accountin
xz xz xz xz xz xz xz xz xz xz xz
g information.
xz
A) It is global information that reflects the performance of the whole company.
xz xz xz xz xz xz xz xz xz xz xz
B) It is focused primarily on the future.
xz xz xz xz xz xz
C) It is more concerned with financial data than physical or economic data.
xz xz xz xz xz xz xz xz xz xz xz
D) It is more highly regulated than managerial accounting information.
xz xz xz xz xz xz xz xz
4) Managerial accounting information is limited or restricted by which of the followin
xz xz xz xz xz xz xz xz xz xz xz
g authorities or principles?
xz xz xz
A) Securities and Exchange Commission xz xz xz
B) Generally Accepted Accounting Principles xz xz xz
C) Managerial Accounting Standards Board xz xz xz
D) Value-Added Principle xz
5) Select the incorrect statement regarding the relationship between type of user and type
xz xz xz xz xz xz xz xz xz xz xz xz xz
of information.
xz
A) Middle managers need more nonfinancial, or operational data than do senior executives.
xz xz xz xz xz xz xz xz xz xz xz
B) Assembly line supervisors need more immediate feedback on performance than do seni
xz xz xz xz xz xz xz xz xz xz xz
or executives.
xz
C) Senior executives need less aggregated information than do lower-level managers.
xz xz xz xz xz xz xz xz xz
D) Senior executives use general economic information as well as financial information.
xz xz xz xz xz xz xz xz xz xz
6) Select the correct statement regarding managerial and financial accounting.
xz xz xz xz xz xz xz xz
A) Users of managerial accounting information desire greater aggregation than do users
xz xz xz xz xz xz xz xz xz xz xz
of financial accounting information.
xz xz xz
B) Both managerial and financial accounting use economic and physical data in addition t
xz xz xz xz xz xz xz xz xz xz xz xz
o financial data.
xz xz
C) Financial accounting is more highly regulated than managerial accounting.
xz xz xz xz xz xz xz xz
D) Timeliness is more important in financial accounting than in managerial accounting.
xz xz xz xz xz xz xz xz xz xz
1
Copyright 2020 © McGraw- xz xz xz
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McG
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
raw-Hill Education.
,7) Which of the following most exemplifies the value-added principle?
xz xz xz xz xz xz xz xz
A) An ongoing process where continuous improvement is the goal.
xz xz xz xz xz xz xz xz
B) A competitive management program that emphasizes quality.
xz xz xz xz xz xz
C) Information gathering and reporting activities should be restricted to those activities that ad
xz xz xz xz xz xz xz xz xz xz xz xz
d value in excess of their cost.
xz xz xz xz xz xz
D) Managerial accounting information is measured in economic, physical, and financial terms.
xz xz xz xz xz xz xz xz xz xz
8) Which of the following costs would be classified as a direct cost for a company that produc
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
es motorcycles?
xz
A) Rent of manufacturing facility that produces motorcycles.
xz xz xz xz xz xz
B) Seats used in the motorcycles.
xz xz xz xz
C) Wages of motorcycle assembly workers.
xz xz xz xz
D) Both seats used in the motorcycles and wages of motorcycle assembly workers are correct.
xz xz xz xz xz xz xz xz xz xz xz xz xz
9) Which of the following is a product cost for a construction company?
xz xz xz xz xz xz xz xz xz xz xz
A) Cost of transporting raw materials to the job site
xz xz xz xz xz xz xz xz
B) Wages paid to the company's payroll clerk
xz xz xz xz xz xz
C) Rent of the company's main office
xz xz xz xz xz
D) All of these. xz xz
10) For a manufacturing company, product costs include all of the following except:
xz xz xz xz xz xz xz xz xz xz xz
A) indirect material costs. xz xz
B) warehousing costs of finished goods. xz xz xz xz
C) direct labor costs. xz xz
D) All of these are product costs.
xz xz xz xz xz
11) During its first year of operations, Connor Company paid $50,000 for direct materials and
xz xz xz xz xz xz xz xz xz xz xz xz xz
$36,000 in wages for production workers. Lease payments and utilities on the production facil
xz xz xz xz xz xz xz xz xz xz xz xz xz
ities amounted to $14,000. General, selling, and administrative expenses were $16,000. The co
xz xz xz xz xz xz xz xz xz xz xz xz
mpany produced 5,000 units and sold 4,000 units for $30.00 a unit. The average cost to produ
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
ce one unit is which of the following amounts?
xz xz xz xz xz xz xz xz
A) $20.00
B) $16.00
C) $18.40
D) $25.00
12) During its first year of operations, Forrest Company paid $30,000 for direct materials and
xz xz xz xz xz xz xz xz xz xz xz xz xz
$50,000 in wages for production workers. Lease payments, utility costs, and depreciation on f
xz xz xz xz xz xz xz xz xz xz xz xz xz
actory equipment totaled $15,000. General, selling, and administrative expenses were $20,000.
xz xz xz xz xz xz xz xz xz xz xz
The average cost to produce one unit was $2.50. How many units were produced during the p
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
eriod?
A) 40,000
B) 46,000
C) 38,000
D) None of these. xz xz
2
Copyright 2020 © McGraw- xz xz xz
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McG
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
raw-Hill Education.
, 13) Why do accountants normally calculate cost per unit as an average?
xz xz xz xz xz xz xz xz xz xz
A) Determining the exact cost of a product is virtually impossible.
xz xz xz xz xz xz xz xz xz
B) Some manufacturing-related costs cannot be accurately traced to specific units of product.
xz xz xz xz xz xz xz xz xz xz xz
C) Even when producing multiple units of the same product, normal variations occur in th
xz xz xz xz xz xz xz xz xz xz xz xz xz
e amount of materials and labor used.
xz xz xz xz xz xz
D) All of these are justifications for computing average unit costs.
xz xz xz xz xz xz xz xz xz
14) Which of the following costs is not considered a period cost?
xz xz xz xz xz xz xz xz xz xz
A) Warehousing costs xz
B) Depreciation of delivery vehicles xz xz xz
C) Salaries paid to company executives
xz xz xz xz
D) Freight paid on a purchase of raw materials
xz xz xz xz xz xz xz
15) Select the incorrect statement regarding costs and expenses.
xz xz xz xz xz xz xz
A) Some costs are initially recorded as expenses while others are initially recorded as assets.
xz xz xz xz xz xz xz xz xz xz xz xz xz
B) Expenses are incurred when assets are used to generate revenue.
xz xz xz xz xz xz xz xz xz
C) Manufacturing-related costs are initially recorded as expenses. xz xz xz xz xz xz
D) Non-manufacturing costs should be expensed in the period in which they are incurred. xz xz xz xz xz xz xz xz xz xz xz xz
16) Which of the following costs should be recorded as an expense?
xz xz xz xz xz xz xz xz xz xz
A) Salary of administrative employee
xz xz xz
B) Depreciation of manufacturing equipment xz xz xz
C) Insurance for the factory building xz xz xz xz
D) All of these are expenses.
xz xz xz xz
17) Which of the following costs should not be recorded as an expense?
xz xz xz xz xz xz xz xz xz xz xz
A) Insurance on factory building xz xz xz
B) Sales commissions
xz
C) Product shipping costs xz xz
D) Product advertising xz
18) Which of the following transactions would cause net income for the period to decrease?
xz xz xz xz xz xz xz xz xz xz xz xz xz
A) Paid $2,500 cash for raw material cost
xz xz xz xz xz xz
B) Purchased $8,000 of merchandise inventory xz xz xz xz
C) Recorded $5,000 of depreciation on production equipment
xz xz xz xz xz xz
D) Used $2,000 of office supplies
xz xz xz xz
19) Which of the following statements is true with regard to product costs versus general, sellin
xz xz xz xz xz xz xz xz xz xz xz xz xz xz
g, and administrative costs?
xz xz xz
A) Product costs associated with unsold units appear on the income statement as gener
xz xz xz xz xz xz xz xz xz xz xz xz
al expenses.
xz
B) General, selling, and administrative costs appear on the balance sheet.
xz xz xz xz xz xz xz xz xz
C) Product costs associated with units sold appear on the income statement as cost of goods sold.
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
D) None of these are true.
xz xz xz xz
3
Copyright 2020 © McGraw- xz xz xz
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McG
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
raw-Hill Education.
apter 1 Management Accounting and Corporate Governance
xz x z xz xz xz xz
1) Ashley Bradshaw is the manager of one department in a large store. In this capacity, which
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
of the following kinds of information would she be interested in?
xz xz xz xz xz xz xz xz xz xz
A) Economic data xz
B) Financial data xz
C) Nonfinancial data xz
D) Financial, economic, and nonfinancial data xz xz xz xz
2) All of the following are features of managerial accounting except:
xz xz xz xz xz xz xz xz xz
A) information is provided primarily to insiders such as managers. xz xz xz xz xz xz xz xz
B) information includes economic and non-financial data as well as financial data.
xz xz xz xz xz xz xz xz xz xz
C) information is characterized by objectivity, reliability, consistency, and accuracy.
xz xz xz xz xz xz xz xz
D) information is reported continuously with a present or future orientation.
xz xz xz xz xz xz xz xz xz
3) Choose the answer that is not a distinguishing characteristic of financial accountin
xz xz xz xz xz xz xz xz xz xz xz
g information.
xz
A) It is global information that reflects the performance of the whole company.
xz xz xz xz xz xz xz xz xz xz xz
B) It is focused primarily on the future.
xz xz xz xz xz xz
C) It is more concerned with financial data than physical or economic data.
xz xz xz xz xz xz xz xz xz xz xz
D) It is more highly regulated than managerial accounting information.
xz xz xz xz xz xz xz xz
4) Managerial accounting information is limited or restricted by which of the followin
xz xz xz xz xz xz xz xz xz xz xz
g authorities or principles?
xz xz xz
A) Securities and Exchange Commission xz xz xz
B) Generally Accepted Accounting Principles xz xz xz
C) Managerial Accounting Standards Board xz xz xz
D) Value-Added Principle xz
5) Select the incorrect statement regarding the relationship between type of user and type
xz xz xz xz xz xz xz xz xz xz xz xz xz
of information.
xz
A) Middle managers need more nonfinancial, or operational data than do senior executives.
xz xz xz xz xz xz xz xz xz xz xz
B) Assembly line supervisors need more immediate feedback on performance than do seni
xz xz xz xz xz xz xz xz xz xz xz
or executives.
xz
C) Senior executives need less aggregated information than do lower-level managers.
xz xz xz xz xz xz xz xz xz
D) Senior executives use general economic information as well as financial information.
xz xz xz xz xz xz xz xz xz xz
6) Select the correct statement regarding managerial and financial accounting.
xz xz xz xz xz xz xz xz
A) Users of managerial accounting information desire greater aggregation than do users
xz xz xz xz xz xz xz xz xz xz xz
of financial accounting information.
xz xz xz
B) Both managerial and financial accounting use economic and physical data in addition t
xz xz xz xz xz xz xz xz xz xz xz xz
o financial data.
xz xz
C) Financial accounting is more highly regulated than managerial accounting.
xz xz xz xz xz xz xz xz
D) Timeliness is more important in financial accounting than in managerial accounting.
xz xz xz xz xz xz xz xz xz xz
1
Copyright 2020 © McGraw- xz xz xz
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McG
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
raw-Hill Education.
,7) Which of the following most exemplifies the value-added principle?
xz xz xz xz xz xz xz xz
A) An ongoing process where continuous improvement is the goal.
xz xz xz xz xz xz xz xz
B) A competitive management program that emphasizes quality.
xz xz xz xz xz xz
C) Information gathering and reporting activities should be restricted to those activities that ad
xz xz xz xz xz xz xz xz xz xz xz xz
d value in excess of their cost.
xz xz xz xz xz xz
D) Managerial accounting information is measured in economic, physical, and financial terms.
xz xz xz xz xz xz xz xz xz xz
8) Which of the following costs would be classified as a direct cost for a company that produc
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
es motorcycles?
xz
A) Rent of manufacturing facility that produces motorcycles.
xz xz xz xz xz xz
B) Seats used in the motorcycles.
xz xz xz xz
C) Wages of motorcycle assembly workers.
xz xz xz xz
D) Both seats used in the motorcycles and wages of motorcycle assembly workers are correct.
xz xz xz xz xz xz xz xz xz xz xz xz xz
9) Which of the following is a product cost for a construction company?
xz xz xz xz xz xz xz xz xz xz xz
A) Cost of transporting raw materials to the job site
xz xz xz xz xz xz xz xz
B) Wages paid to the company's payroll clerk
xz xz xz xz xz xz
C) Rent of the company's main office
xz xz xz xz xz
D) All of these. xz xz
10) For a manufacturing company, product costs include all of the following except:
xz xz xz xz xz xz xz xz xz xz xz
A) indirect material costs. xz xz
B) warehousing costs of finished goods. xz xz xz xz
C) direct labor costs. xz xz
D) All of these are product costs.
xz xz xz xz xz
11) During its first year of operations, Connor Company paid $50,000 for direct materials and
xz xz xz xz xz xz xz xz xz xz xz xz xz
$36,000 in wages for production workers. Lease payments and utilities on the production facil
xz xz xz xz xz xz xz xz xz xz xz xz xz
ities amounted to $14,000. General, selling, and administrative expenses were $16,000. The co
xz xz xz xz xz xz xz xz xz xz xz xz
mpany produced 5,000 units and sold 4,000 units for $30.00 a unit. The average cost to produ
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
ce one unit is which of the following amounts?
xz xz xz xz xz xz xz xz
A) $20.00
B) $16.00
C) $18.40
D) $25.00
12) During its first year of operations, Forrest Company paid $30,000 for direct materials and
xz xz xz xz xz xz xz xz xz xz xz xz xz
$50,000 in wages for production workers. Lease payments, utility costs, and depreciation on f
xz xz xz xz xz xz xz xz xz xz xz xz xz
actory equipment totaled $15,000. General, selling, and administrative expenses were $20,000.
xz xz xz xz xz xz xz xz xz xz xz
The average cost to produce one unit was $2.50. How many units were produced during the p
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
eriod?
A) 40,000
B) 46,000
C) 38,000
D) None of these. xz xz
2
Copyright 2020 © McGraw- xz xz xz
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McG
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
raw-Hill Education.
, 13) Why do accountants normally calculate cost per unit as an average?
xz xz xz xz xz xz xz xz xz xz
A) Determining the exact cost of a product is virtually impossible.
xz xz xz xz xz xz xz xz xz
B) Some manufacturing-related costs cannot be accurately traced to specific units of product.
xz xz xz xz xz xz xz xz xz xz xz
C) Even when producing multiple units of the same product, normal variations occur in th
xz xz xz xz xz xz xz xz xz xz xz xz xz
e amount of materials and labor used.
xz xz xz xz xz xz
D) All of these are justifications for computing average unit costs.
xz xz xz xz xz xz xz xz xz
14) Which of the following costs is not considered a period cost?
xz xz xz xz xz xz xz xz xz xz
A) Warehousing costs xz
B) Depreciation of delivery vehicles xz xz xz
C) Salaries paid to company executives
xz xz xz xz
D) Freight paid on a purchase of raw materials
xz xz xz xz xz xz xz
15) Select the incorrect statement regarding costs and expenses.
xz xz xz xz xz xz xz
A) Some costs are initially recorded as expenses while others are initially recorded as assets.
xz xz xz xz xz xz xz xz xz xz xz xz xz
B) Expenses are incurred when assets are used to generate revenue.
xz xz xz xz xz xz xz xz xz
C) Manufacturing-related costs are initially recorded as expenses. xz xz xz xz xz xz
D) Non-manufacturing costs should be expensed in the period in which they are incurred. xz xz xz xz xz xz xz xz xz xz xz xz
16) Which of the following costs should be recorded as an expense?
xz xz xz xz xz xz xz xz xz xz
A) Salary of administrative employee
xz xz xz
B) Depreciation of manufacturing equipment xz xz xz
C) Insurance for the factory building xz xz xz xz
D) All of these are expenses.
xz xz xz xz
17) Which of the following costs should not be recorded as an expense?
xz xz xz xz xz xz xz xz xz xz xz
A) Insurance on factory building xz xz xz
B) Sales commissions
xz
C) Product shipping costs xz xz
D) Product advertising xz
18) Which of the following transactions would cause net income for the period to decrease?
xz xz xz xz xz xz xz xz xz xz xz xz xz
A) Paid $2,500 cash for raw material cost
xz xz xz xz xz xz
B) Purchased $8,000 of merchandise inventory xz xz xz xz
C) Recorded $5,000 of depreciation on production equipment
xz xz xz xz xz xz
D) Used $2,000 of office supplies
xz xz xz xz
19) Which of the following statements is true with regard to product costs versus general, sellin
xz xz xz xz xz xz xz xz xz xz xz xz xz xz
g, and administrative costs?
xz xz xz
A) Product costs associated with unsold units appear on the income statement as gener
xz xz xz xz xz xz xz xz xz xz xz xz
al expenses.
xz
B) General, selling, and administrative costs appear on the balance sheet.
xz xz xz xz xz xz xz xz xz
C) Product costs associated with units sold appear on the income statement as cost of goods sold.
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
D) None of these are true.
xz xz xz xz
3
Copyright 2020 © McGraw- xz xz xz
Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McG
xz xz xz xz xz xz xz xz xz xz xz xz xz xz xz
raw-Hill Education.
