9/5/23,j11:54jAM TestjBankjandjSolutionsjForjFundamentalsjofjCostjAccountingj7thjEditionj…
ForjAlljChaptersjà
FundamentalsjofjCostjAccounting,j7ej(Lanen)j Chapte
rj2j CostjConceptsjandjBehavior
1) Thejcostjofjanjitemjisjthejsacrificejofjresourcesjmadejtojacquirejit.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjisjthejdefinitionjofjcost.j Difficulty
:j1jEasy
Topic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Remember
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
2) Anjexpensejisjajcostjchargedjagainstjrevenuejinjanjaccountingjperiod.
Answer:j TRUE
Explanation:j Thisjstatementjisjthejdefinitionjofjanjexpense.j Difficul
ty:j1jEasy
Topic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Remember
AACSB:j Analyticalj Thinking
Accessibility:j Keyboardj Navigation
3) Ifjajcostjisjrecordedjasjanjassetj(forjexample,jprepaidjrentjforjanjofficejbuilding),jitjbecomesj an
jexpensejwhenjthe jassetjhasjbeenjconsumed.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjdescribesjthejappropriatejtransitionjbetweenj
assetsjandjexpenses.
Difficulty:j2jMediumj T
opic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
1
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,9/5/23,j11:54jAM TestjBankjandjSolutionsjForjFundamentalsjofjCostjAccountingj7thjEditionj…
ForjAlljChaptersjà
4) Accountingjsystemsjtypicallyjrecordjopportunityjcostsjasjassetsjandjtreatjthemjasjintangiblej it
emsjonjthejfinancialjstatements.
Answer:j FALSE
Explanation:j Opportunityjcostsjarejnotjreflectedjinjthejaccountingjsystem—
theyjarejwhatjdidj notjhappen.
Difficulty:j2jMediumj T
opic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
5) Totaljcostjofjgoodsjpurchasedjminusjbeginningjmerchandisejinventoryjplusjendingj
merchandisejinventoryjequalsjcostjofjgoodsjsold.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jPurchasesjplusjbeginningjinventoryjminusjendingj inventor
yjequalsjcostjofjgoodsjsold.
Difficulty:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
6) Costjofjgoodsjsoldjincludes jthejactualjcostsjofjthejgoodsjsoldjandjthejcostsjrequiredjtojsellj th
emjtojthejcustomer.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jCostjofjgoodsjsoldjdoesjnotjincludejsellingjcosts.j Difficulty
:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
2
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,9/5/23,j11:54jAM TestjBankjandjSolutionsjForjFundamentalsjofjCostjAccountingj7thjEditionj…
ForjAlljChaptersjà
7) Periodjcostsjarejthosejcostsjassignedjtojunitsjofjproductionjinjthejperiodjinjwhichjtheyjarej in
curred.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jThisjstatementjdescribesjproductjcosts,jnotjperiodjcosts.j Dif
ficulty:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
8) Onlyjdirectjcostsjcanjbejclassifiedjasjproductjcosts;jindirectjcostsjarejclassifiedjasjperiodj c
osts.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jProductjcostsjcanjincludejbothjdirectjandjindirectjcosts.j Dif
ficulty:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
9) Thejthreejcategoriesjofjproductjcostsjarejdirectjmaterials, jdirectjlabor,jandjmanufacturingj o
verhead.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjisjthejdefinitionjofjproductjcost.j D
ifficulty:j1jEasy
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Remember
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
3
about:blank 3/140
, 9/5/23,j11:54jAM TestjBankjandjSolutionsjForjFundamentalsjofjCostjAccountingj7thjEditionj…
ForjAlljChaptersjà
10) Thejfirstjstepjinjdeterminingjwhetherjajcostjisjdirectjorjindirectjisjtojspecifyjthejcostj al
locationjrule.
Answer:j FALSE
Explanation:j Thejfirstjstepjinjdeterminingjwhetherjajcostjisjdirectjorjindirectjisjdefiningjthejcostj obj
ect.
Difficulty:j2jMediumj T
opic:j CostjAllocation
LearningjObjective:j 02-
03jExplainjthejprocessjofjcostjallocation.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
11) Totaljwork-in-processjduringjthejperiodjisjthejsumjofjthejbeginningjwork-in-
processj inventoryjandjthejtotaljmanufacturingjcostsjincurredjduringjthejperiod.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjisjthejcorrectjformulajforjtotaljwork-in-
process.j Difficulty:j2jMedium
Topic:j HowjCostsjFlowjthroughjthejStatements
LearningjObjective:j 02-
04jUnderstandjhowjmaterial, jlabor,jandjoverheadjcostsjarejaddedjtojaj productjatjeachjstagejofjthej
productionjprocess.
Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
12) Costjofjgoodsjsoldjplusjthejendingjfinishedjgoodsjinventoryjminusjthejbeginningjfinishedj g
oodsjinventoryjequalsjthejcostjofjgoodsjmanufactured.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjworksjbackwardsjfromjcostjofjgoodsjsoldjtoj cost
jofjgoods jmanufactured.
Difficulty:j2jMedium
Topic:j HowjCostsjFlowjthroughjthejStatements
LearningjObjective:j 02-
04jUnderstandjhowjmaterial, jlabor,jandjoverheadjcostsjarejaddedjtojaj productjatjeachjstagejofjthej
productionjprocess.
Bloom's:j Understandj AACS
B:j AnalyticaljThinking
Accessibility:j Keyboardj Navigation
4
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ForjAlljChaptersjà
FundamentalsjofjCostjAccounting,j7ej(Lanen)j Chapte
rj2j CostjConceptsjandjBehavior
1) Thejcostjofjanjitemjisjthejsacrificejofjresourcesjmadejtojacquirejit.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjisjthejdefinitionjofjcost.j Difficulty
:j1jEasy
Topic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Remember
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
2) Anjexpensejisjajcostjchargedjagainstjrevenuejinjanjaccountingjperiod.
Answer:j TRUE
Explanation:j Thisjstatementjisjthejdefinitionjofjanjexpense.j Difficul
ty:j1jEasy
Topic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Remember
AACSB:j Analyticalj Thinking
Accessibility:j Keyboardj Navigation
3) Ifjajcostjisjrecordedjasjanjassetj(forjexample,jprepaidjrentjforjanjofficejbuilding),jitjbecomesj an
jexpensejwhenjthe jassetjhasjbeenjconsumed.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjdescribesjthejappropriatejtransitionjbetweenj
assetsjandjexpenses.
Difficulty:j2jMediumj T
opic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
1
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,9/5/23,j11:54jAM TestjBankjandjSolutionsjForjFundamentalsjofjCostjAccountingj7thjEditionj…
ForjAlljChaptersjà
4) Accountingjsystemsjtypicallyjrecordjopportunityjcostsjasjassetsjandjtreatjthemjasjintangiblej it
emsjonjthejfinancialjstatements.
Answer:j FALSE
Explanation:j Opportunityjcostsjarejnotjreflectedjinjthejaccountingjsystem—
theyjarejwhatjdidj notjhappen.
Difficulty:j2jMediumj T
opic:j WhatjisjajCost?
LearningjObjective:j 02-
01jExplainjthejbasicjconceptjofj"cost."j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
5) Totaljcostjofjgoodsjpurchasedjminusjbeginningjmerchandisejinventoryjplusjendingj
merchandisejinventoryjequalsjcostjofjgoodsjsold.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jPurchasesjplusjbeginningjinventoryjminusjendingj inventor
yjequalsjcostjofjgoodsjsold.
Difficulty:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
6) Costjofjgoodsjsoldjincludes jthejactualjcostsjofjthejgoodsjsoldjandjthejcostsjrequiredjtojsellj th
emjtojthejcustomer.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jCostjofjgoodsjsoldjdoesjnotjincludejsellingjcosts.j Difficulty
:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
2
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,9/5/23,j11:54jAM TestjBankjandjSolutionsjForjFundamentalsjofjCostjAccountingj7thjEditionj…
ForjAlljChaptersjà
7) Periodjcostsjarejthosejcostsjassignedjtojunitsjofjproductionjinjthejperiodjinjwhichjtheyjarej in
curred.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jThisjstatementjdescribesjproductjcosts,jnotjperiodjcosts.j Dif
ficulty:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
8) Onlyjdirectjcostsjcanjbejclassifiedjasjproductjcosts;jindirectjcostsjarejclassifiedjasjperiodj c
osts.
Answer:j FALSE
Explanation:j Thisjstatementjisjfalse.jProductjcostsjcanjincludejbothjdirectjandjindirectjcosts.j Dif
ficulty:j2jMedium
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
9) Thejthreejcategoriesjofjproductjcostsjarejdirectjmaterials, jdirectjlabor,jandjmanufacturingj o
verhead.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjisjthejdefinitionjofjproductjcost.j D
ifficulty:j1jEasy
Topic:j PresentationjofjCostsjinjFinancialjStatements
LearningjObjective:j 02-
02jExplainjhowjcostsjarejpresentedjinjfinancialjstatements.j Bloom's:j Remember
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
3
about:blank 3/140
, 9/5/23,j11:54jAM TestjBankjandjSolutionsjForjFundamentalsjofjCostjAccountingj7thjEditionj…
ForjAlljChaptersjà
10) Thejfirstjstepjinjdeterminingjwhetherjajcostjisjdirectjorjindirectjisjtojspecifyjthejcostj al
locationjrule.
Answer:j FALSE
Explanation:j Thejfirstjstepjinjdeterminingjwhetherjajcostjisjdirectjorjindirectjisjdefiningjthejcostj obj
ect.
Difficulty:j2jMediumj T
opic:j CostjAllocation
LearningjObjective:j 02-
03jExplainjthejprocessjofjcostjallocation.j Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
11) Totaljwork-in-processjduringjthejperiodjisjthejsumjofjthejbeginningjwork-in-
processj inventoryjandjthejtotaljmanufacturingjcostsjincurredjduringjthejperiod.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjisjthejcorrectjformulajforjtotaljwork-in-
process.j Difficulty:j2jMedium
Topic:j HowjCostsjFlowjthroughjthejStatements
LearningjObjective:j 02-
04jUnderstandjhowjmaterial, jlabor,jandjoverheadjcostsjarejaddedjtojaj productjatjeachjstagejofjthej
productionjprocess.
Bloom's:j Understand
AACSB:j AnalyticaljThinkingj Accessibilit
y:j KeyboardjNavigation
12) Costjofjgoodsjsoldjplusjthejendingjfinishedjgoodsjinventoryjminusjthejbeginningjfinishedj g
oodsjinventoryjequalsjthejcostjofjgoodsjmanufactured.
Answer:j TRUE
Explanation:j Thisjstatementjisjtrue.jThisjstatementjworksjbackwardsjfromjcostjofjgoodsjsoldjtoj cost
jofjgoods jmanufactured.
Difficulty:j2jMedium
Topic:j HowjCostsjFlowjthroughjthejStatements
LearningjObjective:j 02-
04jUnderstandjhowjmaterial, jlabor,jandjoverheadjcostsjarejaddedjtojaj productjatjeachjstagejofjthej
productionjprocess.
Bloom's:j Understandj AACS
B:j AnalyticaljThinking
Accessibility:j Keyboardj Navigation
4
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