Accounting 202 - Chapter 2

46 Questions | Total Attempts: 225

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Accounting Quizzes & Trivia

Managerial accounting as we know is a branch of accounts that helps in collecting, analyzing, and reporting information about the operations and finances of a business. These reports are generally used to show the position of a business to continue as a going concern. Take up the quiz and see what you know about it.


Questions and Answers
  • 1. 
    Which of the following are merchandising companies?
    • A. 

      Manufactures

    • B. 

      Retailers

    • C. 

      Wholesalers

    • D. 

      Both Retailers and Wholesalers

  • 2. 
    Raw materials, work in process and finished goods are the three types of inventory held by which of the following types of companies?
    • A. 

      Manufacturing

    • B. 

      Retailers

    • C. 

      Wholesalers

    • D. 

      Service Companies

  • 3. 
    The balance sheet of a service company has:
    • A. 

      Little of no inventory

    • B. 

      Raw materials inventory

    • C. 

      Three categories of inventory

    • D. 

      Two categories of inventory

  • 4. 
    Which types of company typically produces it's own inventory?
    • A. 

      Manufacturer

    • B. 

      Service company

    • C. 

      Retailer

    • D. 

      Wholesaler

  • 5. 
    • A. 

      Merchandise

    • B. 

      Retailer

    • C. 

      Wholesaler

    • D. 

      All of the above

  • 6. 
    Before these materials are used to manufacture its cars, Honda classifies steel, glass, and plastic as:
    • A. 

      Finished goods inventory

    • B. 

      Raw materials inventory

    • C. 

      Work in process inventory

    • D. 

      Merchandise inventory

  • 7. 
    Wal-Mart classifies its clothing held for sale as:
    • A. 

      Finished goods inventory

    • B. 

      Raw materials inventory

    • C. 

      Work in process inventory

    • D. 

      Merchandise inventory

  • 8. 
    • A. 

      Finished goods

    • B. 

      Raw materials

    • C. 

      Supplies

    • D. 

      Work in process

  • 9. 
    Intel Corporation makes computer chips. Intel Corporation would be classified as a:
    • A. 

      Manufacturing company

    • B. 

      Merchandising company

    • C. 

      Service company

    • D. 

      Simple company

  • 10. 
    In ______________, inventory consists of freight-in and the cost of the product which is to be resold.
    • A. 

      A service company

    • B. 

      A merchandising company

    • C. 

      A manufacturing company

    • D. 

      All of these companies

  • 11. 
    Which of the following items would NOT be found in raw materials inventory for a furniture manufacturer?
    • A. 

      Wood

    • B. 

      Fabric

    • C. 

      Assembly worker wages

    • D. 

      Steel framing

  • 12. 
    Which of the following costs could be found in work in process inventory for an ice cream manufacturer?
    • A. 

      Utilities for administrative offices

    • B. 

      Assembly worker wages

    • C. 

      Depreciation of sales office

    • D. 

      Customer order forms

  • 13. 
    A company decision as to where to locate a new store would be considered?
    • A. 

      Customer service

    • B. 

      Marketing

    • C. 

      Production

    • D. 

      Research and development

  • 14. 
    Delivery expenses are are charged to which of the following areas?
    • A. 

      Customer service

    • B. 

      Distribution

    • C. 

      Production or purchases

    • D. 

      Marketing

  • 15. 
    A product support hot line would be considered:
    • A. 

      Customer service

    • B. 

      Distribution

    • C. 

      Production or purchases

    • D. 

      Marketing

  • 16. 
    Indirect costs incurred in manufacturing autos include all of the following EXCEPT:
    • A. 

      Cost of the engines

    • B. 

      Machinery depreciation in the factory

    • C. 

      Plant utilities

    • D. 

      Plant supervisor salary

  • 17. 
    Prime costs consist of:
    • A. 

      Direct labor and manufacturing overhead.

    • B. 

      Direct materials and direct labor

    • C. 

      Direct materials and manufacturing overhead

    • D. 

      Direct materials, direct labor and manufacturing overhead

  • 18. 
    Conversion costs consist of:
    • A. 

      Direct labor and manufacturing overhead

    • B. 

      Direct materials and direct labor

    • C. 

      Direct materials and manufacturing overhead

    • D. 

      Direct materials, direct labor and manufacturing overhead

  • 19. 
    Which of the following is an example of direct labor?
    • A. 

      Salary of a production manager

    • B. 

      Salary of the vice-president of operations

    • C. 

      Wages of assembly line personnel

    • D. 

      Wages of factory security

  • 20. 
    Which of the following are classifed as manufacturing overhead?
    • A. 

      Direct materials and direct labor

    • B. 

      Indirect labor and indirect materials

    • C. 

      All materials

    • D. 

      Factory rent and direct labor

  • 21. 
    Manufacturers consider selling and administrative costs to be:
    • A. 

      Prime costs

    • B. 

      Conversion costs

    • C. 

      Inventoriable costs

    • D. 

      Period costs

  • 22. 
    Period costs are:
    • A. 

      Always considered part of the inventory

    • B. 

      Always recorded as an expense

    • C. 

      Expensed only when the inventory is sold

    • D. 

      None of the above

  • 23. 
    Where would period costs be found on the financial statements?
    • A. 

      Under current assets on the balance sheet

    • B. 

      Under current liabilities on the balance sheet

    • C. 

      As operating expenses on the income statement for the previous period

    • D. 

      As operating expenses on the income statement in the period incurred

  • 24. 
    • A. 

      Period costs and expensed when incurred

    • B. 

      Period costs and expensed when the goods are sold

    • C. 

      Product costs and expensed when incurred

    • D. 

      Product costs and expensed when the goods are sold

  • 25. 
    Certain materials used in a manufacturing plant cannot be traced to a specific unit. These materials are called _________ materials.
    • A. 

      General

    • B. 

      Direct

    • C. 

      Finished

    • D. 

      Indirect

  • 26. 
    Rent on a factory building would be considered to be:
    • A. 

      A direct cost

    • B. 

      A period cost

    • C. 

      A product cost

    • D. 

      None of the above

  • 27. 
    Which statement describes direct materials in a manufacturing setting?
    • A. 

      Direct materials are used to determine total inventoriable product costs.

    • B. 

      Direct materials are used to determine total manufacturing overhead.

    • C. 

      Direct materials connot be separately and conveniently traced.

    • D. 

      Direct materials do not become part of the finished product.

  • 28. 
    Which of the following describes full product costs for a product?
    • A. 

      Full product costs are narrower in scope than inventoriable product costs.

    • B. 

      Full product costs consist of direct materials, direct labor and manufacturing overhead.

    • C. 

      Full product costs include all costs of the value chain

    • D. 

      Both A and B are correct

  • 29. 
    Which of the followinng statements is correct concerning product costs?
    • A. 

      Product costs are expensed in the period incurred

    • B. 

      Product costs are expensed in the period the related product is sold.

    • C. 

      Product costs are shown with operating expenses on the income statement.

    • D. 

      Product costs are shown with current liabilities on the balance sheet.

  • 30. 
    Which of the following is calculated before operating income can be determined for a manufacturer? 
    • A. 

      Cost of goods available for sale

    • B. 

      Cost of goods manufactured

    • C. 

      Cost of goods sold

    • D. 

      All of the above

  • 31. 
    The only difference in the balancing sheets of various types of businesses (for example, manufacturing vs. service) is:
    • A. 

      Current assets

    • B. 

      Current liabilities

    • C. 

      Investments

    • D. 

      Equity

  • 32. 
    Which of the following would be on the income statement of a retailer?
    • A. 

      Value of inventory

    • B. 

      Cost of goods sold

    • C. 

      Accounts payable

    • D. 

      Accounts receivable

  • 33. 
    Which of the following costs would appear on the income statements for both a merchandiser and manufacturer?
    • A. 

      Cost of goods manufactured

    • B. 

      Direct labor incurred

    • C. 

      Direct materials used

    • D. 

      Operating expenses

  • 34. 
    Which of the following, in addition to cost of goods manufactured, is needed to compute the cost of goods sold for a manufacture?
    • A. 

      Beginning work in process inventory less ending work in process inventory.

    • B. 

      Ending work in process inventory less beginning work in process inventory.

    • C. 

      Beginning finished goods less ending finished goods

    • D. 

      Ending finished goods less beginning finished goods

  • 35. 
    For a manufacturer, beginning work in process would be equal to:
    • A. 

      Cost of goods manufactured + ending work in process inventory - manufacturing costs incurred in the period.

    • B. 

      Cost of goods manufactured - ending work in process inventory + manufacturing costs incurred in the period.

    • C. 

      Ending work in process inventory + manufacturing costs incurred in the period.

    • D. 

      Manufacturing costs incurred in the period - ending work in process inventory.

  • 36. 
    Which of the following represents a sunk cost?
    • A. 

      A historical cost that is never relevant

    • B. 

      A historical cost that is always relevant

    • C. 

      An outlay expected to be incurred in the future

    • D. 

      A cost that is relevant to any decision

  • 37. 
    Subtracting the costs of one alternative from the costs of the other alternative would be called the _________________cost.
    • A. 

      Sunk

    • B. 

      Imported

    • C. 

      Differential

    • D. 

      Alternative

  • 38. 
    • A. 

      Cost of the new computer

    • B. 

      Cost of the old computer (sunk costs)

    • C. 

      Games that come with the new computer

    • D. 

      Warranty on the new computer

  • 39. 
    A restaurant is facing a decision about whether it should bake its own dinner rolls or whether it should continue to purchase dinner rolls from a local bakery. Which of the following costs would be relevant to its decision.
    • A. 

      The salary of the restaurant manager

    • B. 

      The purchase price of the dinner rolls purchased from the local bakery

    • C. 

      The price the restaurant sells the dinner rolls for

    • D. 

      The original purchase price of the current machinery

  • 40. 
    Average variable costs (per unit)
    • A. 

      Remain the same as production decreases

    • B. 

      Remain the same as production increases

    • C. 

      Go down as production decreases

    • D. 

      Remain the same no matter if production increases or decreases

  • 41. 
    The cost of making one more unit is called:
    • A. 

      Marginal cost

    • B. 

      Unit cost

    • C. 

      Variable cost

    • D. 

      None of the above

  • 42. 
    Which of the following is an example of a fixed cost for a manufacturer?
    • A. 

      Salary of the plant manager

    • B. 

      Sales commissions

    • C. 

      Direct materials

    • D. 

      Delivery costs

  • 43. 
    Which of the following describes the way in which total fixed costs behave?
    • A. 

      They will remain the same throughout production levels.

    • B. 

      They will decrease as production decreases.

    • C. 

      They will decrease as production increases.

    • D. 

      They will increase as production decreases

  • 44. 
    Which of the following describes the way fixed costs per unit behave?
    • A. 

      They will remain the same throughout the production levels

    • B. 

      They will decrease as production decreases

    • C. 

      They will decrease as production increases

    • D. 

      They will increase as production decreases

  • 45. 
    Varible costs:
    • A. 

      Are fixed in total as production levels change

    • B. 

      Are fixed per unit and vary in total as productions levels change.

    • C. 

      Decrease per unit as production volume increases

    • D. 

      Vary per unit of output as production levels change

  • 46. 
    A company's total costs are calculated by:
    • A. 

      Subtracting total fixed costs from total variable costs

    • B. 

      Subtracting total variable costs from total fixed costs

    • C. 

      Adding total fixed costs to total variable costs

    • D. 

      Subtracting total fixed costs and total variable costs from sales.