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Financial and Managerial Accounting: The Basis for Business Decisions, 12/e

Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs

Management Accounting: A Business Partner

Multiple Choice Quiz

Please answer all questions


1	Decision-making responsibility over company assets is often assigned to a specific employee by means of:
		A)	A budget.
		B)	The corporation's charter.
		C)	A meeting and vote of stockholders.
		D)	The financial accounting system.


2	Which of the following decision makers is least likely to be among the users of managerial accounting reports developed by Sears Roebuck and Co.?
		A)	The chief executive officer of Sears.
		B)	The manager of the Automotive Department in a Sears store.
		C)	The manager of a mutual fund considering investing in Sears? common stock.
		D)	Internal auditors within the Sears organization.


3	The "net purchases" acquired by a merchandising company correspond most closely to which of the following items applicable to a manufacturing company?
		A)	Cost of goods available for sale.
		B)	Cost of finished goods manufactured.
		C)	Cost of goods sold.
		D)	Total manufacturing costs incurred during the production process.


4	The raw materials used by a manufacturing company are properly classified as an inventory asset until what point in time?
		A)	The date on which the invoice for the materials is paid..
		B)	The date on which the completed final products containing the materials is sold to the customer.
		C)	The date on which the materials are first used in production.
		D)	The date on which the final product is completed.


5	Which of the following do not represent a type of inventory to General Motors?
		A)	Completed automobiles awaiting sale.
		B)	Raw materials and component parts awaiting use in the manufacturing process.
		C)	Automobiles that are only partially completed at the end of the accounting period.
		D)	None of the above answers is correct. All of these items represent part of GM's inventories.


6	At year-end, the Materials Inventory account normally has a:
		A)	Debit balance, representing direct materials on hand and available for use.
		B)	Credit balance, representing the amount owed to suppliers of the materials.
		C)	Zero balance, because the cost of all direct materials is charged to work in process at year-end.
		D)	Zero, because the Materials Inventory account is closed at year-end


7	Since production employees work directly on the goods being manufactured, the related labor costs are recorded by crediting:
		A)	Wages Expense.
		B)	Direct Labor.
		C)	Work in Process Inventory.
		D)	Manufacturing Overhead.

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