Chapter 1 Flashcards
Which of the following statements is true of managerial accounting?
A) The external stakeholders of a company are the primary users of managerial accounting.
B) Managerial accounting information is used to help managers plan, direct and control their operations.
C) An external audit by an independent CPA is required for managerial accounting information.
D) Managerial accounting information must comply with Generally Accepted Accounting Principles.
B
Which of the following statements is true of financial accounting?
A) It provides information to investors needed for their investment decisions.
B) It provides future focused information needed for managing and delegating operations.
C) It focuses on detailed reports for parts of the company rather than the whole company.
D) It focuses on planning, directing and controlling day-to-day operations.
A
3) Which of the following is the primary focus of financial accounting?
A) providing information that managers need to make operational decisions
B) providing summarized information on operational results to investors and creditors
C) providing information to managers to assist in planning, directing and controlling operations
D) providing highly detailed information on product lines, regions, and divisions
B
4) ________ means choosing goals and deciding how to achieve them.
A) Planning
B) Directing
C) Controlling
D) Operational Planning
A
5) Which of the following is most likely a service company?
A) Home Depot
B) ABC Taxi Company
C) Old Navy
D) Wal-Mart
B
6) ________ includes goods that are in the manufacturing process but are not yet completed.
A) Raw Materials Inventory
B) Work-in-Process Inventory
C) Manufacturing Overhead
D) Finished Goods Inventory
B
Which of the following would be considered a direct labor cost for a manufacturing company?
A) wages of the assembly line staff
B) wages of the factory janitors
C) wages of the factory manager
D) salaries of the internal auditors
A
Which of the following is true of service companies?
A) All costs of service companies are product costs.
B) Service companies modify and resell products they buy from manufacturers.
C) Revenues of service companies are only recorded on cash receipt.
D) Service companies carry no inventories of products for sale.
D
The income statement of a service company will most likely include ________.
A) salaries expense
B) factory overhead
C) cost of goods sold
D) direct materials
A
Stone Beauty, Inc. is a merchandiser of stone ornaments. The company sold 7,000 units during the year. The company has provided the following information:
Sales Revenue $579,000
Purchases (excluding freight in) 300,000
Selling and Administrative Expenses 67,000
Freight In 14,000
Beginning Merchandise Inventory 43,000
Ending Merchandise Inventory 42,000
What is the cost of goods available for sale for the year?
A) $357,000
B) $315,000
C) $343,000
D) $329,000
A
T or F
Managerial accounting focuses on providing information for internal planning and control.
True
T or F
Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders.
False
T or F
Merchandising companies sell their time, skills and knowledge.
F
T or F
Merchandising companies resell products they buy from suppliers.
True
T or F
A service business has no inventory accounts.
True
