Accounting 202: MCQ Quiz Exam!
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Dive into 'Accounting 202: MCQ Exam' to master journal entries for various accounting scenarios, including marketing expenses, job completions, sales, and labor costs. This quiz enhances understanding of inventory and cost management in a business context, aligning with professional accounting standards.
- 1.
The journal entry needed to record the receipt of a bill from the company’s marketing agency would include a:
- A.
Debit to manufacturing overhead
- B.
Debit to marketing expenses
- C.
Debit to work in process inventory
- D.
Credit to work in process inventory
Correct Answer
B. Debit to marketing expensesExplanation
The correct answer is debit to marketing expenses. When a bill is received from the company's marketing agency, it represents an expense incurred for marketing services. To record this expense in the accounting system, a debit entry is made to the marketing expenses account, reflecting the increase in expenses. This entry helps in accurately tracking and reporting the company's marketing costs.Rate this question:
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- 2.
The journal entry needed to record the completion of a job includes a:
- A.
Debit to cost of goods sold
- B.
Debit to finished goods inventory
- C.
Debit to work in process inventory
- D.
Debit to raw materials inventory
Correct Answer
B. Debit to finished goods inventoryExplanation
The completion of a job indicates that the goods produced are now ready to be sold to customers. As a result, the cost of producing these goods should be transferred from the work in process inventory to the finished goods inventory. Therefore, a debit to finished goods inventory is necessary to reflect the increase in the value of finished goods.Rate this question:
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- 3.
Under a perpetual inventory system, the journal entry needed to record the sale of a job includes a:
- A.
Debit to sales revenue and credit to accounts receivable
- B.
Debit to cost of goods sold and credit to finished goods inventory
- C.
Debit to finished goods inventory and credit to cost of goods sold
- D.
Debit to cost of goods sold and credit to sales revenue
Correct Answer
B. Debit to cost of goods sold and credit to finished goods inventoryExplanation
The correct answer is debit to cost of goods sold and credit to finished goods inventory. This is because when a job is sold, it is considered a cost of goods sold since it is no longer part of the inventory. The cost of goods sold is debited to reflect the expense, and the finished goods inventory is credited to reduce its value.Rate this question:
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- 4.
Which of the following would be debited to record the costs of indirect labor?
- A.
Manufacturing overhead
- B.
Work in process inventory
- C.
Finished goods inventory
- D.
Wages payable
Correct Answer
A. Manufacturing overheadExplanation
Indirect labor refers to the labor cost that is not directly involved in the production process, such as supervisors or maintenance workers. These costs are considered part of manufacturing overhead, which includes all indirect costs related to the production process. Therefore, to record the costs of indirect labor, it would be debited to the manufacturing overhead account.Rate this question:
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- 5.
Which of the following would be debited to record direct labor costs incurred?
- A.
Finished goods inventory
- B.
Manufacturing overhead
- C.
Wages payable
- D.
Work in process inventory
Correct Answer
D. Work in process inventoryExplanation
Direct labor costs are the wages paid to workers who directly contribute to the production of goods. These costs are typically recorded in the Work in Process Inventory account, as it represents the cost of partially completed goods. By debiting the Work in Process Inventory, the company recognizes the direct labor costs as an expense and includes them in the value of the goods in progress. This helps in accurately tracking the cost of production and determining the cost of goods sold.Rate this question:
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- 6.
Which of the following would be debited to record the requisition of direct materials?
- A.
Finished goods inventory
- B.
Raw materials inventory
- C.
Work in process inventory
- D.
Cost of goods manufactured
Correct Answer
C. Work in process inventoryExplanation
When direct materials are requisitioned, they are used in the production process and become part of the work in process inventory. Work in process inventory represents the partially completed goods that are still undergoing production. Since the requisition of direct materials is a direct cost of production, it is debited to the work in process inventory account to reflect the decrease in the value of materials and the increase in the value of work in process.Rate this question:
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- 7.
The entry to record the purchase of raw materials on account using a job costing system would include a:
- A.
Credit to work in process inventory
- B.
Debit to accounts payable
- C.
Debit to raw materials inventory
- D.
Debit to work in process inventory
Correct Answer
C. Debit to raw materials inventoryExplanation
When raw materials are purchased on account in a job costing system, the entry would include a debit to raw materials inventory. This is because the raw materials are being added to the inventory and increasing its value. The credit to work in process inventory is not necessary at this stage as the materials have not yet been used in production. The debit to accounts payable would be recorded when the payment is made for the materials, not at the time of purchase.Rate this question:
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- 8.
When job costing is used as a service firm
- A.
Indirect costs are traced to client jobs
- B.
Direct costs are allocated to client jobs
- C.
All costs are allocated to client jobs
- D.
Indirect costs are allocated to client jobs
Correct Answer
D. Indirect costs are allocated to client jobsExplanation
In job costing, indirect costs refer to the costs that cannot be directly attributed to a specific client job. These costs include overhead expenses such as rent, utilities, and administrative salaries. In a service firm, indirect costs are allocated to client jobs rather than being traced directly. This means that these costs are distributed among different client jobs based on a predetermined allocation method, such as the percentage of direct costs incurred by each job. By allocating indirect costs to client jobs, the service firm can accurately determine the total cost of each job and make informed pricing decisions.Rate this question:
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- 9.
When job costing is used at a service firm, the bill to the client shows:
- A.
Actual direct cost of providing the service
- B.
The allocation of indirect costs
- C.
The profit on the job
- D.
The billing rate and hours spent on the job
Correct Answer
D. The billing rate and hours spent on the jobExplanation
When job costing is used at a service firm, the bill to the client shows the billing rate and hours spent on the job. This means that the client is charged based on the agreed-upon rate for the service provided and the number of hours it took to complete the job. The actual direct cost of providing the service, the allocation of indirect costs, and the profit on the job may not be explicitly mentioned on the bill, but they are factors that the service firm considers when determining the billing rate.Rate this question:
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- 10.
The hourly price charged to clients for professional labor is called the
- A.
Billing rate.
- B.
Salary rate.
- C.
Wage rate.
- D.
Job rate.
Correct Answer
A. Billing rate.Explanation
The hourly price charged to clients for professional labor is referred to as the billing rate. This rate is determined by the company or individual providing the service and is used to calculate the total cost of the services rendered. It includes factors such as the expertise and experience of the professional, the overhead costs of the company, and any additional expenses incurred during the provision of the service. The billing rate is an important factor in determining the profitability of a project or job.Rate this question:
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- 11.
Service firms develop a predetermined rate for some costs. What is this rate called?
- A.
Labor rate
- B.
Indirect cost allocation rate
- C.
Direct cost rate
- D.
Hourly cost rate
Correct Answer
B. Indirect cost allocation rateExplanation
Service firms develop an indirect cost allocation rate to determine how to allocate indirect costs to their products or services. Indirect costs are expenses that cannot be directly attributed to a specific product or service, such as rent, utilities, or administrative salaries. The indirect cost allocation rate helps service firms distribute these costs fairly and accurately among their various products or services. This rate is calculated by dividing the total indirect costs by a relevant cost driver, such as labor hours or machine hours.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
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Sep 23, 2012Quiz Created by
Jc173
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