MANAGERIAL ACCOUNTING EXAM
GUIDE QUESTIONS WITH CORRECT
ANSWERS
What is the correct order of the flow of product costs through the inventory system?
Select one:
A. Work in Process, Finished Goods, Materials Inventory, Cost of Goods Sold
B. Materials Inventory, Work in Process, Cost of Goods Sold, Finished Goods
C. Cost of Goods Sold, Work in Process, Materials Inventory, Finished Goods
D. Materials Inventory, Work in Process, Finished Goods, Cost of Goods Sold -
Answer-D. materials inventory, work in process, finished goods, cost of goods sold
Which of the following are not included in the Work in Process Inventory?
Select one:
A. Direct Materials that have been put into production
B. Direct Labor incurred in production
C. Manufacturing Overhead allocated to units of production
D. All of the above are included in Work in Process Inventory - Answer-D. all of the
above are included in work in process inventory
Which of the following is not an example of Manufacturing Overhead?
Select one:
A. Factory supervisor salary
B. Cleaning supplies for factory floor
C. Electricity bill for administration building
D. Manufacturing equipment depreciation
E. Production facility rent expense - Answer-C. electricity bill for administration
building
Revenues, Expenses, and Cost of Goods Sold are closed to which of the following
accounts
Select one:
A. Income Summary
B. Retained Earnings
C. Other Income
D. Dividends
E. None of the Above - Answer-A. income summary
Because customers can so quickly compare prices, a business cannot simply raise
their prices, but must be able to control costs in order to realize a reasonable profit.
Select one:
True
False - Answer-true
Period costs are assumed to provide benefit to the company in the period in which
the product is sold.
Select one:
, True
False - Answer-false
Which of the following entries would a manufacturing firm record at the completion of
a product for sale?
Select one:
A. Finished Goods Inventory
Work in Process Inventory
B. Cost of Goods Sold
Work in Process Inventory
C. Work in Process Inventory
Finished Goods Inventory
D. Cost of Goods Sold
Work in Process Inventory - Answer-A. finished goods
work in process inventory
Service firms typically do not have a Finished Goods Inventory.
Select one:
True
False - Answer-true
Which of the following is not a column shown on a period-end worksheet?
Select one:
A. Income Statement
B. Statement of Cash Flows
C. Adjusted Trial Balance
D. Balance Sheet - Answer-B statement of cash flows
A variable cost is one that varies both in total (with respect to the amount of items
produced) and per unit.
Select one:
True
False - Answer-false
Total Manufacturing costs for a period include all direct materials used, all direct
labor, and all manufacturing overhead.
Select one:
True
False - Answer-true
Because the cost of Indirect Materials is included in Manufacturing Overhead, these
materials are not included in Materials Inventory.
Select one:
True
False - Answer-false
Manufacturing firms and merchandising firms generally include all the same
expenses as product costs.
Select one:
True
GUIDE QUESTIONS WITH CORRECT
ANSWERS
What is the correct order of the flow of product costs through the inventory system?
Select one:
A. Work in Process, Finished Goods, Materials Inventory, Cost of Goods Sold
B. Materials Inventory, Work in Process, Cost of Goods Sold, Finished Goods
C. Cost of Goods Sold, Work in Process, Materials Inventory, Finished Goods
D. Materials Inventory, Work in Process, Finished Goods, Cost of Goods Sold -
Answer-D. materials inventory, work in process, finished goods, cost of goods sold
Which of the following are not included in the Work in Process Inventory?
Select one:
A. Direct Materials that have been put into production
B. Direct Labor incurred in production
C. Manufacturing Overhead allocated to units of production
D. All of the above are included in Work in Process Inventory - Answer-D. all of the
above are included in work in process inventory
Which of the following is not an example of Manufacturing Overhead?
Select one:
A. Factory supervisor salary
B. Cleaning supplies for factory floor
C. Electricity bill for administration building
D. Manufacturing equipment depreciation
E. Production facility rent expense - Answer-C. electricity bill for administration
building
Revenues, Expenses, and Cost of Goods Sold are closed to which of the following
accounts
Select one:
A. Income Summary
B. Retained Earnings
C. Other Income
D. Dividends
E. None of the Above - Answer-A. income summary
Because customers can so quickly compare prices, a business cannot simply raise
their prices, but must be able to control costs in order to realize a reasonable profit.
Select one:
True
False - Answer-true
Period costs are assumed to provide benefit to the company in the period in which
the product is sold.
Select one:
, True
False - Answer-false
Which of the following entries would a manufacturing firm record at the completion of
a product for sale?
Select one:
A. Finished Goods Inventory
Work in Process Inventory
B. Cost of Goods Sold
Work in Process Inventory
C. Work in Process Inventory
Finished Goods Inventory
D. Cost of Goods Sold
Work in Process Inventory - Answer-A. finished goods
work in process inventory
Service firms typically do not have a Finished Goods Inventory.
Select one:
True
False - Answer-true
Which of the following is not a column shown on a period-end worksheet?
Select one:
A. Income Statement
B. Statement of Cash Flows
C. Adjusted Trial Balance
D. Balance Sheet - Answer-B statement of cash flows
A variable cost is one that varies both in total (with respect to the amount of items
produced) and per unit.
Select one:
True
False - Answer-false
Total Manufacturing costs for a period include all direct materials used, all direct
labor, and all manufacturing overhead.
Select one:
True
False - Answer-true
Because the cost of Indirect Materials is included in Manufacturing Overhead, these
materials are not included in Materials Inventory.
Select one:
True
False - Answer-false
Manufacturing firms and merchandising firms generally include all the same
expenses as product costs.
Select one:
True
