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Chapters 1-4 The Accounting Cycle
Chapters 5-8 Current Assets
Chapters 9-11 Long-Term Assets
Chapters 12-14 Liabilities/Equities
Chapters 15-16 Using Information
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20 Managerial/Cost
Chapters 21-24 Budgeting/Decisions

Chapter 17 - Multiple Choice

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Chapter 17 – Multiple Choice

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Question 1 of 8

1. Question
Which of the following statements about differences between financial and managerial accounting is incorrect?
- Managerial accounting information is prepared primarily for external parties such as stockholders and creditors; financial accounting is directed at internal users.
- Financial accounting is aggregated; managerial accounting is focused on products and departments.
- Managerial accounting pertains to both past and future items; financial accounting focuses primarily on past transactions and events.
- Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors.
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Question 2 of 8

2. Question
Cost accounting information can be used for:
- Budget control and evaluation.
- Determining standard costs and variances.
- Pricing and inventory valuation decisions.
- All of these.
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Question 3 of 8

3. Question
Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?
- Direct materials, direct labor, and factory overhead.
- Direct materials and direct labor only.
- Direct materials, direct labor, factory overhead, and administrative overhead.
- Direct labor and factory overhead.
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Question 4 of 8

4. Question
The 20X5 work in process inventories of Parkhurst, Inc., totaled $20,000 on January 1 and $15,000 on December 31. If total manufacturing cost was 90% of cost of goods sold, how much was cost of goods sold?
- Cannot be determined from the information presented.
- 110% of total manufacturing cost.
- ($20,000 – $15,000)/0.90.
- ($20,000 – $15,000) + 110% of total manufacturing cost.
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Question 5 of 8

5. Question
Machine lubricant used on processing equipment in a manufacturing plant would be classified as a:
- period cost/manufacturing overhead.
- period cost/SG&A.
- product cost/manufacturing overhead.
- product cost/SG&A.
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Question 6 of 8

6. Question
Factory overhead includes all manufacturing costs except direct material and direct labor. Which of the following items would not be considered to be a factory overhead cost?
- Repainting the corporate office building.
- Indirect labor.
- Repair and maintenance expenditures on factory machinery.
- Small expenditures pertaining to items like rags, screws, adhesives, etc., used in the production process.
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Question 7 of 8

7. Question
Which of the following product costs is both a prime cost and conversion cost?
- All of the following (b, c, and d).
- Manufacturing overhead.
- Direct material.
- Direct labor.
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Question 8 of 8

8. Question
On a schedule of cost of goods manufactured:
- Cost of goods manufactured and total manufacturing costs are always the same.
- Cost of goods manufactured is calculated by adding the beginning work in process inventory to total manufacturing costs and subtracting the ending work in process inventory balance
- Beginning raw materials inventory plus direct labor plus factory overhead yields total manufacturing costs.
- All of the above are correct.
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Chapters 1-4
Chapters 5-8
Chapters 9-11
Chapters 12-14
Chapters 15-16
- Chapter 15: Financial Reporting and Concepts
- Chapter 16: Financial Analysis and the Statement of Cash Flows
Chapters 17-20
Chapters 21-24
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