ACC-350 TEST 1 QUESTIONS WITH
ACCURATE ANSWERS
Which of the following correctly describes the accounting for advertising costs?
- ANSWER advertising costs are period costs and are expensed as incurred
Which of the following is true of product costs? - ANSWER they are first
recorded in an inventory account
Which of the following is a product cost? - ANSWER depreciation on production
equipment
Which of the following is a philosophy designed to integrate all organizational
areas in order to provide customers with superior products and services, while
meeting organizational goals throughout the value chain? - ANSWER Total
Quality Management (TQM)
Which of the following statements is true of the flow of product and period costs
for a manufacturer? - ANSWER the cost of the finished goods that the
manufacturer sells becomes its cost of goods sold on the income statement
Management's accountability to its suppliers and vendors is to - ANSWER make
timely payments and comply with contract terms
which of the following is a part of manufacturing overhead? - ANSWER factory
insurance
For decision making purposes, ______ costs are often divided into prime costs
and conversion costs - ANSWER product costs
Which of the following is the primary focus of financial accounting? - ANSWER
provided summarized information on operational results to investors and
creditors
one of the primary activities of Rex, Inc is to purchase hats from Viva Inc. in
Texas and sell them to its customers in Washington for a profit. It is likely that
Rex is a - ANSWER merchandising company
Which of the following would be considered a product cost for a manufacturing
company? - ANSWER depreciation on manufacturing equipment
, Managerial accounting can be used to calculate costs for service and
merchandising companies - ANSWER true
Financial accounting - ANSWER financial statements are used by investors,
creditors, and government authorities
o Helps investors make investment decisions
o Reports must follow Generally Accepted Accounting Principles (GAAP)
o Reports audited annually by independent certified public accountants
managerial accounting - ANSWER reports are generated for planning. One
planning tool is the budget. Controlling involves evaluating the plan and
comparing the actual results to the budget. Weighing the cost against is the
benefits is the cost/benefit analysis
o Provides detailed reports on parts of the company
o Helps in planning and controlling operations
management accountability - ANSWER the manager's responsibility to the
various stakeholders to wisely manage the organization's resources; we
basically construct the information to managers based on what they want to see
Enterprise resource planning (ERP) - ANSWER systems integrate company's
data
Just In Time (JIT) - ANSWER is an inventory management tool
Total Quality Management (TQM) - ANSWER a philosophy of continuous
improvement in products and processes; creates a culture of cooperation; each
step adds value to the end product, and this is referred to as the value chain
triple bottom line - ANSWER the economic, social, and environmental impact of
doing business; includes profits, people, and planet
service companies - ANSWER sell their time, skill and knowledge; all of their
costs are period costs and are expense in the period incurred; look for service
revenue
merchandising companies - ANSWER resell products they previously bought
from suppliers; cost of goods sold is an inventorial product cost, also called a
product cost; look for merchandise inventory
manufactoring companies - ANSWER create products customers want; cover
raw materials into finished products. look for accumulation of several different
accounts; Period - directly to income statement
Product - balance sheet = income statement when sold (cost of goods sold)
ACCURATE ANSWERS
Which of the following correctly describes the accounting for advertising costs?
- ANSWER advertising costs are period costs and are expensed as incurred
Which of the following is true of product costs? - ANSWER they are first
recorded in an inventory account
Which of the following is a product cost? - ANSWER depreciation on production
equipment
Which of the following is a philosophy designed to integrate all organizational
areas in order to provide customers with superior products and services, while
meeting organizational goals throughout the value chain? - ANSWER Total
Quality Management (TQM)
Which of the following statements is true of the flow of product and period costs
for a manufacturer? - ANSWER the cost of the finished goods that the
manufacturer sells becomes its cost of goods sold on the income statement
Management's accountability to its suppliers and vendors is to - ANSWER make
timely payments and comply with contract terms
which of the following is a part of manufacturing overhead? - ANSWER factory
insurance
For decision making purposes, ______ costs are often divided into prime costs
and conversion costs - ANSWER product costs
Which of the following is the primary focus of financial accounting? - ANSWER
provided summarized information on operational results to investors and
creditors
one of the primary activities of Rex, Inc is to purchase hats from Viva Inc. in
Texas and sell them to its customers in Washington for a profit. It is likely that
Rex is a - ANSWER merchandising company
Which of the following would be considered a product cost for a manufacturing
company? - ANSWER depreciation on manufacturing equipment
, Managerial accounting can be used to calculate costs for service and
merchandising companies - ANSWER true
Financial accounting - ANSWER financial statements are used by investors,
creditors, and government authorities
o Helps investors make investment decisions
o Reports must follow Generally Accepted Accounting Principles (GAAP)
o Reports audited annually by independent certified public accountants
managerial accounting - ANSWER reports are generated for planning. One
planning tool is the budget. Controlling involves evaluating the plan and
comparing the actual results to the budget. Weighing the cost against is the
benefits is the cost/benefit analysis
o Provides detailed reports on parts of the company
o Helps in planning and controlling operations
management accountability - ANSWER the manager's responsibility to the
various stakeholders to wisely manage the organization's resources; we
basically construct the information to managers based on what they want to see
Enterprise resource planning (ERP) - ANSWER systems integrate company's
data
Just In Time (JIT) - ANSWER is an inventory management tool
Total Quality Management (TQM) - ANSWER a philosophy of continuous
improvement in products and processes; creates a culture of cooperation; each
step adds value to the end product, and this is referred to as the value chain
triple bottom line - ANSWER the economic, social, and environmental impact of
doing business; includes profits, people, and planet
service companies - ANSWER sell their time, skill and knowledge; all of their
costs are period costs and are expense in the period incurred; look for service
revenue
merchandising companies - ANSWER resell products they previously bought
from suppliers; cost of goods sold is an inventorial product cost, also called a
product cost; look for merchandise inventory
manufactoring companies - ANSWER create products customers want; cover
raw materials into finished products. look for accumulation of several different
accounts; Period - directly to income statement
Product - balance sheet = income statement when sold (cost of goods sold)
