1. Which budget should include all production costs other than those for direct
materials and direct labor?
A.Sales budget
B.Direct materials budget
C.Manufacturing overhead budget
D. Production budget - ANSWER- c
2. Which account is a common asset account?
A.Accounts payables
B.Equity
C.Accounts receivable
D. Utilities Expense - ANSWER- c
3 .On which financial statement would you see the valuation of a company's asset
accounts?
a.Statement of Cash Flows
b.Balance Sheet
c.Income Statement
d.Statement of Retained Earnings - ANSWER- B
,4. What is the final step in the accounting cycle?
a.Summarize the effects of transactions
b.Analyze transactions
c.Prepare reports
d.Record the effects of transactions - ANSWER- c
5. Which of the following is not an example of a transaction?
a.Receive cash in payment of an invoice
b.Purchase an asset from a supplier
c.Sale on credit to a customer
d. Preparing financial statements - ANSWER- d
6. On which financial statement would you see cash flows from financing
activities?
a.Statement of Cash Flows
b.Balance Sheet
c.Income Statement
d.Statement of Retained Earnings - ANSWER- d
7. Whose job is it to make sure that investors are provided with full and fair
information about publicly traded companies?
FASB
AICPA
IASB
SEC - ANSWER- d
,8. How does a classified balance sheet provide useful information to a decision
maker?
a.It distinguishes between current and long-term assets
b.It provides data that are not publicly disclosed
c.It distinguishes liabilities from expenses
D. It provides data for a period of time instead of as a point in time - ANSWER- a
9. In some companies, the performance measures for profit center managers are
heavily influenced by cost allocations downward from organizational units (such
as company headquarters). Why is this a mistake?
a.Controllable costs should not be included in the performance evaluation measure
of a profit center manager
b.Revenues should not be included in the performance evaluation measure of a
profit center manager
c.Uncontrollable costs should not be included in the performance evaluation
measure of a profit center manager
d. Direct costs should not be included in the performance evaluation measure of a
profit center manager - ANSWER- c
10. Which is an example of a product cost?
a.Non-manufacturing personnel costs
b.Rent Expense
c.Office Supplies
d. Raw materials to make a product - ANSWER- d
11. Which label is given to the cost of wages for factory supervisors?
a. Direct labor
, b.Direct materials
c. Manufacturing overhead
d. Administrative expenses - ANSWER- c
12. A company reports the following data: Price per unit = $20 Variable costs per
unit = $12 Fixed costs = $12,000 Given these data, what is the variable cost ratio?
a. 40%
b. 25%
c. 16%
d. 60% - ANSWER- d
13. If overhead is underapplied, which statement is true?
a.Actual costs exceed applied costs
b.Applied costs exceed actual costs
c.Costs will not be affected
d. Budgeted and applied costs will be equal - ANSWER- a
14. Which of the following is not an example of a cost driver?
a.Miles driven
b.Selling costs
c.Machine hours
d. Number of customers - ANSWER- b
15. Which item is a period cost?
Manufacturing supplies
Overhead directly tied to the production facility
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