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BASTRCSX Module 1 Self-Test Managerial Accounting and Business Environment

This document contains a self-test on the topic of management accounting and business environment. It includes multiple choice questions and matching questions testing definitions of key terms as well as completion statements about managerial accounting reports, cost accounting concepts, and differences between merchandising and manufacturing companies. The self-test covers topics like the differences between financial and managerial accounting, the three broad managerial functions of planning, controlling, and directing, and the elements of manufacturing costs including direct materials, direct labor, and manufacturing overhead.

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0% found this document useful (0 votes)
658 views3 pages

BASTRCSX Module 1 Self-Test Managerial Accounting and Business Environment

This document contains a self-test on the topic of management accounting and business environment. It includes multiple choice questions and matching questions testing definitions of key terms as well as completion statements about managerial accounting reports, cost accounting concepts, and differences between merchandising and manufacturing companies. The self-test covers topics like the differences between financial and managerial accounting, the three broad managerial functions of planning, controlling, and directing, and the elements of manufacturing costs including direct materials, direct labor, and manufacturing overhead.

Uploaded by

lc
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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1st Term, A.

Y 2020 - 2021
STRATEGIC COST MANAGEMENT

Self-Test (ungraded)
Topic 1: Management Accounting and Business Environment

NAME: (surname first)______________________________ SCORE:__________________


YR./ SEC.: _________________ DATE: ___________________

General Instruction: Write your answer on the space provided for each item.

Part I.
F 1. Published financial statements show costs classified by behavior.
T 2. Generally accepted accounting principles govern financial accounting but not managerial
accounting.
T 3. Economic events are the raw data for both financial and managerial accounting.
F 4. Internal financial statements must be prepared using generally accepted accounting principles.
T 5. The form and content of reports can influence decisions made by managers.
F 6. Management-by-objectives and management-by-exception are two names for the same general
management principle.
F 7. "Pro forma" is the name given to an income statement that classifies costs by function.
T 8. Some managerial accounting reports contain costs not incorporated in the basic accounting
system.
F 9. A professional examination exists to test the competence of financial accountants, but not of
managerial accountants.
F 10. Managerial accountants should, but have no obligation to, maintain their professional skills.

Part II.
Match the items in the two columns below by entering the appropriate code letter in the space
provided.

A. Managerial accounting F. Work in process inventory


B. Financial accounting G. Direct materials
C. Planning H. Manufacturing overhead
D. Directing I. Period costs
E. Controlling J. Value chain

F 1. The cost of products that are partially complete.


E 2. The function of keeping activities in accordance with plans.
A 3. Primarily concerned with internal users and reports pertain to subunits of the entity.
G 4. Materials that can be physically and directly associated with manufacturing a product.
C 5. The function of setting goals and objectives.
H 6. Indirect costs of manufacturing a product.
B 7. Primarily concerned with external users and reports pertain to the entity as a whole.
I 8. Costs that are non-inventoriable.
J 9. All activities associated with providing a product or service.
D 10. The function of coordinating diverse activities to produce a smooth-running operation.

1
Part III.
COMPLETION STATEMENTS

1. Financial accounting information is prepared mainly for external users, while managerial accounting
information is prepared primarily for internal users.

2. The types of reports prepared in managerial accounting are often special purpose reports prepared
for a specific decision.

3. Managerial accounting reports generally pertain to subunits of a business and may be very
detailed.

4. Three broad managerial functions are: (1) planning, (2) controlling, and (3) directing.

5. The planning function is concerned with setting goals and objectives for the entity.

6. Exercising good judgment in performing the managerial functions and choosing among alternative
courses of action is called decision-making.

7. The three cost elements in manufacturing a product are (1) direct materials, (2) direct labor, and (3)
manufacturing overhead.

8. The work of factory employees that can be physically and directly associated with converting raw
materials into products is classified as direct labor.

9. Indirect materials and indirect labor are classified as manufacturing overhead.

10. Each of the manufacturing cost components is a product cost.

11. A major difference between the income statements of a merchandising company and a
manufacturing company is that the cost of goods sold section of a merchandising company shows
cost of goods purchased, whereas a manufacturing company shows cost of goods manufactured.

12. Direct materials used is added to direct labor and manufacturing overhead to get total
manufacturing costs for the current period.

13. The ending work in process inventory is subtracted from the total cost of work in process to
calculate cost of goods manufactured.

14. A manufacturing company computes cost of goods sold by adding cost of goods manufactured to
the finished goods inventory, beg. and subtracting the finished goods inventory, end.

15. A manufacturing company usually has three inventory accounts which are (1) Raw Materials
Inventory, (2) Work in Process Inventory, and (3) Finished Goods Inventory.

STRATEGIC COST MANAGMENT 2


STRATEGIC COST MANAGMENT 3

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