ACCT 2302 MID TERM REVIEW CHAPTER 14-15-16
EXAM WITH COMPLETE SOLUTIONS
Who is the primary user of managerial accounting information?
A.. External Users
B.. Internal Users
C.. Investors
D.. Management - ANSWER B.. Internal Users
Which of the following are characteristics of managerial accounting? Pick all that apply.
A..Emphasis on planning and control.
B..Flexibility (no GAAP) and timeliness
C..Focus on internal decision makers and segments and projects.
D..Reliance on forecasts and estimates
E.. Reporting non-monetary information but not monetary information. - ANSWER A-B-
C-D
Which of the following are characteristics of the "lean business model"? Pick all that
apply.
A.. Continuous improvement (CI)
B.. Just-in-time manufacturing (JIT)
C.. Total quality management (TQM) - ANSWER A-B-C
Which of the following statements about accounting concepts are useful in classifying
costs? Check all that apply.
A.. Business incurs many different types of costs that are classified differently,
depending on the needs of management.
B.. A cost can be classified in only one way.
C.. Cost classification helps to understand cost patterns, analyze performance, and plan
operations.
, D.. Costs can be classified on the basis of their (1) behavior, (2) controllability, (3)
function, (4) relevance, and (5) trace-ability.
E.. Behavior refers to fixed versus variable, controllability refers to controllable versus
uncontrollable, function refers to product versus period, relevance refers to sunk costs
versus out of pocket, and traceability refers to direct versus indirect. - ANSWER A-C-D-
E
What are the costs that are charged to expense and flow directly to the income
statement because their benefits appear to expire as the costs are incurred?
A.. Immediate Cost
B.. Period Cost
C.. Expected Cost
D.. Unexpected Cost - ANSWER B.. Period Cost
Which of the following correctly portrays how balance sheets for manufacturing and
merchandising companies are different?
A.. The inventory account carried by a manufacturer is merchandise inventory.
B.. The inventory accounts carried by a merchandiser are raw materials, goods in
process, and finished goods.
C.. The main difference is in the equity section.
D.. The main difference is that manufacturers usually carry three inventories instead of
one inventory that merchandisers carry. - ANSWER D
Which of the following correctly portrays how income statements for manufacturing and
merchandising companies are different?
A.. The main difference is in the items making up cost of goods sold.
B.. The main difference is in the items making up revenue.
C.. A manufacturer adds beginning merchandise inventory to cost of goods purchased
and then subtracts ending merchandise inventory to get cost of goods sold.
D.. A merchandiser adds beginning finished goods inventory to cost of goods
manufactured and then subtracts ending finished goods inventory to get cost of goods
sold.
E.. A merchandising business's cost of goods manufactured is equivalent to a
manufacturing firm's net cost of merchandise purchases. - ANSWER A
Which of the following statements correctly describes manufacturing activities and the
flow of manufacturing costs?
EXAM WITH COMPLETE SOLUTIONS
Who is the primary user of managerial accounting information?
A.. External Users
B.. Internal Users
C.. Investors
D.. Management - ANSWER B.. Internal Users
Which of the following are characteristics of managerial accounting? Pick all that apply.
A..Emphasis on planning and control.
B..Flexibility (no GAAP) and timeliness
C..Focus on internal decision makers and segments and projects.
D..Reliance on forecasts and estimates
E.. Reporting non-monetary information but not monetary information. - ANSWER A-B-
C-D
Which of the following are characteristics of the "lean business model"? Pick all that
apply.
A.. Continuous improvement (CI)
B.. Just-in-time manufacturing (JIT)
C.. Total quality management (TQM) - ANSWER A-B-C
Which of the following statements about accounting concepts are useful in classifying
costs? Check all that apply.
A.. Business incurs many different types of costs that are classified differently,
depending on the needs of management.
B.. A cost can be classified in only one way.
C.. Cost classification helps to understand cost patterns, analyze performance, and plan
operations.
, D.. Costs can be classified on the basis of their (1) behavior, (2) controllability, (3)
function, (4) relevance, and (5) trace-ability.
E.. Behavior refers to fixed versus variable, controllability refers to controllable versus
uncontrollable, function refers to product versus period, relevance refers to sunk costs
versus out of pocket, and traceability refers to direct versus indirect. - ANSWER A-C-D-
E
What are the costs that are charged to expense and flow directly to the income
statement because their benefits appear to expire as the costs are incurred?
A.. Immediate Cost
B.. Period Cost
C.. Expected Cost
D.. Unexpected Cost - ANSWER B.. Period Cost
Which of the following correctly portrays how balance sheets for manufacturing and
merchandising companies are different?
A.. The inventory account carried by a manufacturer is merchandise inventory.
B.. The inventory accounts carried by a merchandiser are raw materials, goods in
process, and finished goods.
C.. The main difference is in the equity section.
D.. The main difference is that manufacturers usually carry three inventories instead of
one inventory that merchandisers carry. - ANSWER D
Which of the following correctly portrays how income statements for manufacturing and
merchandising companies are different?
A.. The main difference is in the items making up cost of goods sold.
B.. The main difference is in the items making up revenue.
C.. A manufacturer adds beginning merchandise inventory to cost of goods purchased
and then subtracts ending merchandise inventory to get cost of goods sold.
D.. A merchandiser adds beginning finished goods inventory to cost of goods
manufactured and then subtracts ending finished goods inventory to get cost of goods
sold.
E.. A merchandising business's cost of goods manufactured is equivalent to a
manufacturing firm's net cost of merchandise purchases. - ANSWER A
Which of the following statements correctly describes manufacturing activities and the
flow of manufacturing costs?
