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Test Bank and Solutions For Fundamentals of Cost Accounting 7th Edition By William Lanen New updates $21.46
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Test Bank and Solutions For Fundamentals of Cost Accounting 7th Edition By William Lanen New updates
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Test Bank and Solutions For Fundamentals of Cost Accounting 7th Edition By William Lanen New updates

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  • November 8, 2023
  • 130
  • 2023/2024
  • Exam (elaborations)
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  • test bank and solutions for fundamentals

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lOMoAR cPSD| 27753314




Test Bank and Solutions For Fundamentals of Cost
Accounting 7th Edition By William Lanen
New updates

,
, lOMoAR cPSD| 27753314




Fundamentals of Cost Accounting, 7e (Lanen)
Chapter 2 Cost Concepts and Behavior

1) The cost of an item is the sacrifice of resources made to acquire it.

Answer: TRUE
Explanation: This statement is true. This statement is the definition of cost.
Difficulty: 1 Easy Topic: What is a Cost?
Learning Objective: 02-01 Explain the basic concept of "cost."

Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

2) An expense is a cost charged against revenue in an accounting period.

Answer: TRUE
Explanation: This statement is the definition of an expense.
Difficulty: 1 Easy Topic: What is a Cost?
Learning Objective: 02-01 Explain the basic concept of "cost."
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

3) If a cost is recorded as an asset (for example, prepaid rent for an office building), it becomes
an expense when the asset has been consumed.

Answer: TRUE
Explanation: This statement is true. This statement describes the appropriate transition between
assets and expenses.
Difficulty: 2 Medium
Topic: What is a Cost?
Learning Objective: 02-01 Explain the basic concept of "cost."
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) Accounting systems typically record opportunity costs as assets and treat them as intangible
items on the financial statements.

Answer: FALSE
Explanation: Opportunity costs are not reflected in the accounting system—they are what did
not happen.
Difficulty: 2 Medium
Topic: What is a Cost?

, lOMoAR cPSD| 27753314




Learning Objective: 02-01 Explain the basic concept of "cost."
Bloom's: Understand

AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

5) Total cost of goods purchased minus beginning merchandise inventory plus ending
merchandise inventory equals cost of goods sold.

Answer: FALSE
Explanation: This statement is false. Purchases plus beginning inventory minus ending inventory
equals cost of goods sold.
Difficulty: 2 Medium
Topic: Presentation of Costs in Financial Statements
Learning Objective: 02-02 Explain how costs are presented in financial statements.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation

6) Cost of goods sold includes the actual costs of the goods sold and the costs required to sell
them to the customer.

Answer: FALSE
Explanation: This statement is false. Cost of goods sold does not include selling costs.
Difficulty: 2 Medium
Topic: Presentation of Costs in Financial Statements
Learning Objective: 02-02 Explain how costs are presented in financial statements.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
7) Period costs are those costs assigned to units of production in the period in which they are
incurred.

Answer: FALSE
Explanation: This statement is false. This statement describes product costs, not period costs.
Difficulty: 2 Medium
Topic: Presentation of Costs in Financial Statements
Learning Objective: 02-02 Explain how costs are presented in financial statements.
Bloom's: Understand
AACSB: Analytical Thinking

Accessibility: Keyboard Navigation

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