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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 19 - Multiple Choice

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Chapter 19 – Multiple Choice

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Question 1 of 8

1. Question
Which of the following statements concerning job cost sheets is incorrect?
- A job cost sheet would show the direct materials used on that specific job.
- A job cost sheet would reveal the selling costs associated with a particular job.
- The total costs recorded on a job cost sheet should also be reflected in the Work in Process account in the general ledger.
- The amount of overhead on a job cost sheet is the applied factory overhead rather than the actual factory overhead.
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Question 2 of 8

2. Question
Under normal circumstances the Work in Process account used in a job costing system:
- Will include charges for direct labor, direct materials, and applied overhead.
- Will include only charges for direct materials and applied overhead. The labor is charged to expense as incurred.
- Will include charges for direct labor, direct materials, and actual overhead.
- Will include only charges for direct labor and direct materials.
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Question 3 of 8

3. Question
The Factory Overhead account in a job costing system is credited for the:
- Excess of applied overhead over actual overhead.
- Actual overhead.
- Applied overhead.
- Indirect materials and indirect labor.
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Question 4 of 8

4. Question
With the job order cost system, a credit balance in the Factory Overhead account at the end of an accounting period would indicate:
- That an error in the job cost system has occurred.
- That the company lost money during the period.
- The presence of underapplied overhead.
- The presence of overapplied overhead.
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Question 5 of 8

5. Question
The theoretically correct method of allocating under- or overapplied overhead is to:
- Allocate the amount to cost of goods sold.
- Allocate the amount to finished goods.
- Allocate the amount to work in process and finished goods.
- Allocate the amount among work in process, finished goods, and cost of goods sold.
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Question 6 of 8

6. Question
Jensen Manufacturing uses a job order cost system. Overhead is applied at the rate of $20 per direct labor hour. Job #777 includes $2,000 of direct labor cost and 150 direct labor hours. Indirect labor cost of $1,500 was actually incurred. The proper journal entry to record the wage related cost is:
- Debit Work in Process, $3,500; credit Wages Payable, $3,500.
- Debit Wage Expense, $3,500; credit Wages Payable, $3,500.
- Debit Work in Process, $2,000; debit Factory Overhead, $1,500; credit Wages Payable, $3,500.
- Debit Work in Process, $3,500; credit Factory Overhead, $1,500; credit Wage Expense, $2,000.
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Question 7 of 8

7. Question
The appropriate journal entry to record the application of overhead in a job costing system involves a debit to Work in Process and a credit to:
- Cost of Goods Sold
- Factory Overhead
- Cash
- Income Summary
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Question 8 of 8

8. Question
Which of the following statements concerning job costing systems is incorrect?
- Cost drivers are those items which cause actual overhead to exceed applied overhead.
- Job costing systems are appropriate to both manufacturing and service businesses.
- Traditionally, direct labor has been a very popular overhead application base.
- In a service business, indirect costs of providing a service are treated as overhead and applied in a manner similar to that for factory overhead.
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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