Reports prepared in financial accounting are general-purpose reports, whereas

reports prepared in managerial accounting are usually special-purpose reports. T

or F ?

True

Managerial accounting information generally pertains to an entity as a whole and is

highly aggregated. T or F.

False

Managerial accounting applies to all forms of business organizations.  T or F.

True

Determining the unit cost of manufacturing a product is an output of financial

accounting. T or F?

False
Managerial Accounting internal reports are prepared more frequently than are
classified financial statements. T or F?

True

The management function of organizing and directing is mainly concerned with

setting goals and objectives for the entity. T or F.

False

The Sarbanes-Oxley Act replaces generally accepted accounting principles in a

manufacturing company. T or F.

False

Controlling is the process of determining whether planned goals are being met. T
or F.

True

Decision-making is an integral part of the planning, directing, and controlling

functions. T or  F.

True

Both direct labor cost and indirect labor cost are product costs. T or F.

True
Manufacturing costs that cannot be classified as direct materials or direct labor are
classified as manufacturing overhead. T or F.

True

Raw materials are equal to direct materials minus indirect materials. T or F.

False

Raw materials that can be conveniently and directly associated with a finished
product are called materials overhead.

False

The total cost of a finished product does not generally contain equal amounts of
materials, labor, and overhead costs. T or F.
True

Direct materials costs and indirect materials costs are manufacturing overhead. T
or F.

False

Period costs include selling administrative expenses. T or F.

True

Indirect materials and indirect labor are both inventoriable costs.

True

Direct materials and direct labor are the only product costs. T or F.

False

Total period costs are deducted from total cost of work in process to calculate cost
of goods manufactured. T or F.

False

Period costs are not inventoriable. T or F.

True

Ending finished goods inventory appears both on the balance sheet and the
income statement of a manufacturing company. T or F. 

True

The beginning WIP inventory appears on both the balance sheet and the CoGS
schedule of a manufacturing company. T or F. 

False

In calculating gross profit for a manufacturing company, the CoGS manufactured is

deducted from net sales.

False

Finished goods inventory does not appear on a CoGS manufactured schedule. 

True

If the ending WIP inventory is greater than the beginning WIP inventory, then the
CoGs manufactured will be less than total manufacturing costs for the period.

True
Finished goods inventory for a manufacturing company is equivalent to
merchandise inventory for a merchandising company. 

True

Raw materials inventory shows the cost of completed goods available for sale to
customers.

False

The balanced scorecard approach attempts to maintain as little inventory on hand

as possible. T or F.

False

The supply chain is all the activities associated with providing a product or service.
T or F. 

False

Many companies have significantly lowered inventory levels and costs using just-
in-time inventory methods. T or F. 

True 

Managerial accounting is primarily concerned with managers and external users. T

or F.
False

Planning involves coordinating the diverse activities and human resources of a

company to produce a smooth running operation. T or F. 

False

When the physical association of raw materials with the finished product is too
small to trace in terms of cost, they are usually classified as indirect materials. T or
F.

True

Product costs are also called inventoriable costs. T or F.

True 

Direct materials become a cost of the finished goods manufactured when they are
acquired, not when they are used. T or F. 

False

The sum of the direct materials costs, direct labor costs, and beginning work in
process is the total manufacturing costs for the year. T or F.

False
In a manufacturing company balance sheet, manufacturing inventories are
reported in the current assets section in the order of their expected use in
production, T or F. 

False 

Cost accounting is primarily concerned with accumulating information about

product costs. 

True

A job order cost system is most appropriate when a large volume of uniform
products are produced. 

False

A process cost accounting system is appropriate for similar products that are
continuously mass produced. 

True

The perpetual inventory method cannot be used in a job order cost system. 

False

A job order cost system and a process cost system are two alternative methods for
valuing inventories. 
True

A job order cost system identifies costs with a particular job rather than with a set
time period. 

True

A company may use either a job order cost system or a process cost system, but
not both. 

False

Raw materials inventory, factory labor, and manufacturing overhead are all control
accounts in the general ledger when a job order cost accounting system is used. 

False

Accumulating and assigning manufacturing costs are two important activities in a

job order cost system. 

True

Recording acquisition of raw materials is apart of accumulating manufacturing

costs.

True
Manufacturing costs are generally incurred in one period and recorded in a
subsequent period.

False

The purchases account is credited for all raw materials purchase returns and
allowances.

False

When raw materials are received  there's no effort at this point to associate the
cost of materials with specific jobs.

True

When raw materials are purchased, the WIP inventory account is debited.

False 

Factory labor should be assigned to selling and administrative expenses on a

proportionate basis.

False

Fringe benefits and payroll taxes associated with factory workers should be
accumulated as a part of factory labor. 

True 
Job order costs sheet constitute the subsidiary ledger of the control account WIP
inventory. 

True

In a job order cost system, each entry to the WIP inventory account should be
accompanied by a posting to one or more job costs sheets. 

True

Direct materials requisitioned from the storeroom should be charged to the WIP
inventory account and the job cost sheets for the individual jobs on which the
materials were used. 

True

Manufacturing overhead is the only product cost that can be assigned to jobs as
soon as the costs are incurred. 

False

There should be a separate job cost sheet for each job. 

True
Actual manufacturing overhead costs are assigned to each job by tracing each
overhead cost to a specific job. 

False

The formula for the predetermined overhead rate is estimated annual overhead
costs divided by an expected annual operating activity.

True

Actual manufacturing overhead costs should be charged to the WIP inventory

account as they are incurred. 

False

A good system of internal control requires that the job order cost sheet be
destroyed as soon as the job is complete. 

False 

L Finished goods inventory is charged for the costs of jobs completed during a
period.

True

When goods are sold, the CoGS account is debited and WIP inventory account is
credited. 
False

Total manufacturing costs for a period consists of the costs of direct materials
used, the cost of direct labor incurred, and the manufacturing overhead applied
during the period. 

True

Overapplied overhead means that actual manufacturing overhead costs were

greater than the manufacturing overhead costs applied to jobs. 

False

At the end of the year, the accountant credits the amount of the overapplied
overhead to the CoGS. 

True

A cost accounting system consists of manufacturing cost accounts that are fully
integrated into the general ledger of a company. 

True

The cost of raw materials purchased is credited to Raw Materials Inventory when
materials are received. 

False
Requisitions for direct materials are posed daily to the individual job cost sheets. 

True

The predetermined overhead rate is based on the relationship between estimated

annual overhead costs and expected annual operating activity expressed in terms
of a common activity base. 

True

At the end of the year, underapplied overhead is usually credited to CoGS. 

False