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Accounting 212 Test 1-Liberty University
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Accounting 212 Test 1-Liberty University
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Accounting 212 Test 1-Liberty University3 main duties of non public accountants - <<ANSWER>>planning, controlling, decision
making
financial accounting - <<ANSWER>>concerned with reporting historical information to
external parties, emphasizing objectivity, precision, GAAP
managerial accounting - <<ANSWER>>concerned with providing information to
managers inside the organization, emphasizing the future, relevance for planning,
controlling, decision making. don't need to follow GAAP
selling and administrative expenses are considered to be
A) product cost under variable costing
B) product cost under absorption costing
C) part of fixed manufacturing overhead under variable costing
D) period cost under variable costing - <<ANSWER>>Period costs under variable
costing
MOH is assigned to products using: - <<ANSWER>>pre-determined overhead rate
ex: 1,000,000/ 200,000 = $5.00 per direct labor hours
contribution format income statement - <<ANSWER>>sales - variable expenses =
contribution margin - fixed expenses = NOI
analyze costs based on behavior
balance sheet - <<ANSWER>>snapshot of firm's finances at a specific time. ranked in
order of liquidity from assets, to liabilities, to owner's equity
under-applied MOH - <<ANSWER>>lower net income - add to COGS
over-applied MOH - <<ANSWER>>higher net income - subtract from COGS
journal entry when products are completed - <<ANSWER>>credit WIP, debit FG
journal entry when finished goods are sold - <<ANSWER>>credit FG, debit COGS
, absorption costing method - <<ANSWER>>fixed MOH are treated like product costs
and absorbed into WIP on balance sheet, uses GAAP
variable costing method - <<ANSWER>>fixed MOH are treated like period costs on
income statement. method is used internally to see what's happening in the company
2 ways to close out MOH - <<ANSWER>>1. break everything up between COGS, WIP,
FG (results in a less severe effect on NOI)
2. put everything through COGS (more severe effect on NOI for the period)
journal entries when MOH is applied to jobs - <<ANSWER>>credit MOH, debit WIP
journal entries ex: cost of good manufactured is 7,000 - <<ANSWER>>credit WIP, debit
FG
journal entries ex: sales for the year on account totaled $1,200,000. goods cost
$800,000 according to job sheets - <<ANSWER>>debit accounts receivable 1,200,000
credit sales 1,200,000
debit COGS 800,000
credit FG 800,000
journal entries ex: invoice from insurance company has $20,000 for building insurance
(50% factory, 50% for office) in 2012 - <<ANSWER>>debit 10,000 MOH
debit 10,000 insurance expense
credit 20,000 accounts payable
journal entries ex: invoice from insurance company has $20,000 for building insurance
(50% factory, 50% for office) in 2013 - <<ANSWER>>debit prepaid insurance 20,000
credit accounts payable 20,000
journal entries ex: accounts payable carried over for the year from 2011 were paid in full
in 2012. accounts payable $25,000 - <<ANSWER>>debit accounts payable 25,000
credit cash 25,000
journal entries ex: prepaid insurance expired during the year $7,000 80% goes to
production, 20% goes to administrative - <<ANSWER>>credit prepaid insurance 7,000
debit MOH 5,600
debit insurance expense 1,400
a portion of total fixed MOH cost incurred during a period may
A) be excluded from cost of goods sold under absorption costing
B) be charged as a period cost with the remainder deferred under variable costing
C) never be excluded from COGS under absorption costing
D) never be excluded from COGS under variable costing - <<ANSWER>>be excluded
from cost of goods sold under absorption costing
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