Business Finance Quiz (Intermediate Level Test)

34 Questions | By Desperatehospmgm | Last updated: Mar 21, 2022 | Total Attempts: 101

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Business Finance Quiz (Intermediate Level Test) - Quiz

Questions and Answers

1.

All of the following are features of managerial accounting except
- A.
  
  Information is historically based and usually reported annually
- B.
  
  Information includes economic and nonfinancial data as well as financial data
- C.
  
  Information is provided primarily to insiders such as managers
- D.
  
  Information is reported continuously with a present or future orientation
2.

Managerial accounting information is limited or restricted by which of the following authories or principles?
- A.
  
  Securities and Exchange Commission
- B.
  
  Financial Accounting Standards Board
- C.
  
  Generally Accepted Accounting Principles
- D.
  
  Value Added Principle
3.

Which of the following is a product cost for a construction company?
- A.
  
  Cost of transporting raw materials to the job site
- B.
  
  Selling costs
- C.
  
  Wages paid to the companys office manager
- D.
  
  Salary of the company chief executive officer
4.

Which of the following costs would not be classified as overhead for a company that produces small appliances?
- A.
  
  Assembly Labor
- B.
  
  Plant supervisory labor
- C.
  
  Indirect material costs
- D.
  
  Plant utilities costs
5.

Product costs include all of the following except
- A.
  
  Direct material costs
- B.
  
  Direct labor costs
- C.
  
  Research and development costs
- D.
  
  Overhead costs
6.

During its first year of operations, the Johnson Company paid $16,000 for direct material and $17,000 in wages for production workers. Lease payments and utilities on the production facilities amounted to $7,000. General, selling, and administrative expenses were $6,000. The company produced 5,000 units and sold 4,000 units at a price of $15.00 a unit. The average cost per unit is which of the following amounts?
- A.
  
  $8
- B.
  
  $10
- C.
  
  $9.20
- D.
  
  $11
7.

Which of the following costs is not considered to be a product cost
- A.
  
  Raw materials cost
- B.
  
  Depreciation of delivery vehicles
- C.
  
  Wages paid to production workers
- D.
  
  Factory utilities costs
8.

Which of the following should be recorded as an asset?
- A.
  
  Paid for a new advertising campaign
- B.
  
  Paid rent on the warehouse used to store finished goods
- C.
  
  Paid salary for the vice president of marketing
- D.
  
  Paid for raw materials to be used in production
9.

Which of the following should not be recorded as an expense?
- A.
  
  Paid office salaries
- B.
  
  Paid factory maintenence costs
- C.
  
  Paid product advertising costs
- D.
  
  Paid sales commissions
10.

Select the correct equation for product costs.
- A.
  
  Product Costs = Cost of finished goods inventory – Cost of goods sold
- B.
  
  Product Costs = Cost of goods sold + General, selling, and administrative
- C.
  
  Product Costs = Cost of finished goods inventory + Cost of goods sold
- D.
  
  Product Costs = Cost of goods sold – General, selling, and administrative costs
11.

Which of the following transactions would cause net income for the period to be lower?
- A.
  
  Paid $1,600 cash for raw material
- B.
  
  Paid administrative salaries of $2,500
- C.
  
  Recorded depreciation on production equipment, $3,
- D.
  
  Paid $2,800 in wages for production workers
12.

Manufacturing costs that cannot be traced to specific units of product in a cost-effective manner are:
- A.
  
  Manufacturing, overhead costs
- B.
  
  General selling and administrative costs
- C.
  
  Indirect costs
- D.
  
  A and C
13.

Which of the following types of labor costs will not initially flow through the balance sheet?
- A.
  
  Salaries for sales staff
- B.
  
  Plant supervision salaries
- C.
  
  Factory insurance
- D.
  
  Product delivery costs
14.

Managerial accounting is designed to satisfy needs of external users including creditors, investors, and governmental agencies.
- A.
  
  True
- B.
  
  False
15.

The managerial accounting system includes economic and non-financial data as well as financial statement data.
- A.
  
  True
- B.
  
  False
16.

Operating workers (lower-level employees) need more nonfinancial data than financial data to do their jobs.
- A.
  
  True
- B.
  
  False
17.

Senior executives focus on financial data when comparing the performance of their companies to that of competitors.
- A.
  
  True
- B.
  
  False
18.

Financial accounting focuses primarily on the performance of the company as a whole.
- A.
  
  True
- B.
  
  False
19.

Most internal users of accounting information primarily need global information that reflects the performance of the company as a whole.
- A.
  
  True
- B.
  
  False
20.

Product costs include materials, labor, and selling and administrative costs.
- A.
  
  True
- B.
  
  False
21.

Incurring product costs is an asset exchange transaction.
- A.
  
  True
- B.
  
  False
22.

A cash payment for materials to be used in manufacturing a product is an asset use transaction.
- A.
  
  True
- B.
  
  False
23.

Most companies expense product costs at the time production is completed.
- A.
  
  True
- B.
  
  False
24.

A merchandising business paid $2,500 to purchase inventory and $50 to have the inventory delivered to its storeroom. Its product costs related to these transactions were $2,550.
- A.
  
  True
- B.
  
  False
25.

The primary challenge in computing the total cost per unit of product is determining the amount of overhead cost that should be assigned to each unit.
- A.
  
  True
- B.
  
  False