1.

Financial accounting information is primarily used by:

a. Company management

b. Shareholders

c. Employees

d. Customers

2. Which of the following statements is NOT typically prepared according to GAAP?

a. Income statement

b. Balance sheet

c. Managerial reports

d. Statement of cash flows

3. Financial accounting reports are typically prepared:

a. Daily

b. Weekly

c. Monthly, quarterly, or yearly

d. As needed

4. Which of the following is NOT an external user of financial accounting information?

a. Shareholders

b. Creditors

c. Government agencies

d. Managers

### Managerial Accounting

5. Managerial accounting information is used primarily for:

a. External reporting

b. Tax preparation

c. Management decision making

 d. Auditing

6. Which of the following is a characteristic of managerial accounting reports?

a. They must adhere to GAAP.

b. They are prepared at fixed intervals.

c. They are used by external users.

d. They are tailored to the specific needs of management.

7. Managerial accounting reports can be prepared for:

a. The company as a whole

b. Specific segments of the company

c. External stakeholders

d. Auditors

8. Which of the following is an example of estimated data in managerial accounting?

a. Historical sales figures

b. Future sales projections

c. Previous year's expense reports

d. Actual production costs

9. In most companies, the controller is responsible for:

a. Directing the sales team

b. Overseeing production processes

c. Chief management accounting functions

d. Developing marketing strategies

10. Which of the following is considered a line position?

a. Vice President of Human Resources

b. Plant Manager

c. Chief Financial Officer

d. Controller
11. A staff department is responsible for:

a. Providing goods or services directly to customers

b. Directly managing production facilities

c. Providing support and advice to line departments

d. Setting company-wide policies

12. The five basic phases of the management process are:

a. Planning, budgeting, accounting, auditing, controlling

b. Planning, directing, controlling, improving, decision making

c. Planning, financing, investing, controlling, decision making

d. Planning, marketing, selling, improving, decision making

13. Strategic planning typically involves:

a. Developing short-term actions

b. Creating daily operational plans

c. Developing long-term strategies

d. Setting weekly targets

14. The process of running day-to-day operations is called:

a. Planning

b. Controlling

c. Directing

d. Improving

15. The philosophy of controlling by comparing actual and expected results is known as:

a. Management by objectives

b. Management by exception

c. Total quality management

d. Continuous process improvement

16. Continuous process improvement aims to:

a. Eliminate the source of problems

b. Increase employee workload

c. Reduce production costs

d. Implement new technologies

17. Managerial accounting helps in determining the selling price of a product by providing
information on:

a. Market trends

b. Manufacturing costs

c. Competitor pricing

d. Customer preferences

18. Which of the following is an example of a managerial accounting report used to monitor
costs?

a. Income statement

b. Balance sheet

c. Performance report

d. Statement of cash flows

19. A report analyzing potential efficiencies and dollar savings from new equipment is an
example of:

a. Financial accounting

b. Tax accounting

c. Managerial accounting

d. Auditing

20. To set monthly selling targets and bonuses for sales personnel, management would use
information from:

a. Financial statements

b. Managerial accounting reports

c. Tax returns

d. Audit reports
 Based on the provided information, here are 20 moderate-level multiple-choice questions
(MCQs) with their answers:

### Costs and Cost Objects

1. A cost is a payment of cash or the commitment to pay cash in the future for the purpose
of:

a. Reducing expenses

b. Generating revenues

c. Investing in stocks

d. Paying off debt

2. In managerial accounting, costs are often classified according to:

a. Financial reporting needs

b. Tax requirements

c. Decision-making needs of management

d. Audit standards

3. A cost object may include all of the following EXCEPT:

a. A product

b. A sales territory

c. A competitor's financial statement

d. A department

### Direct and Indirect Costs

4. Direct costs can be:

a. Traced to a cost object

b. Allocated to multiple departments

c. Hidden in overhead

d. Ignored in managerial accounting

5. Which of the following is an example of a direct cost for a guitar manufacturer?

a. Salary of the CEO

b. Cost of the wood used to make guitars

c. Depreciation of factory equipment

d. Property taxes on factory buildings

6. Indirect costs:

a. Can be traced to a specific cost object

b. Cannot be identified with a cost object

c. Are not relevant to managerial accounting

d. Include direct labor costs

7. An example of an indirect cost for a guitar manufacturer is:

a. Cost of guitar strings

b. Salaries of production supervisors

c. Wood used to make guitars

d. Electronic components for the guitar

### Manufacturing Costs

8. The cost of a manufactured product includes:

a. Only direct materials cost

b. Only direct labor cost

c. Direct materials cost, direct labor cost, and factory overhead cost

d. Only factory overhead cost

9. Which of the following is NOT considered a direct materials cost?

a. Wood for making guitars

b. Electronic components for televisions

c. Silicon wafers for microcomputer chips

d. Lubricant for factory machinery

10. Direct labor cost must:

a. Be a minor part of the product cost

b. Not be an integral part of the finished product

c. Be a significant portion of the total cost of the product

d. Be easy to allocate to overhead

11. Which of the following is an example of direct labor cost?

a. Salary of the factory supervisor

b. Wages of employees who assemble guitars

c. Cost of oil for factory machinery

d. Property taxes on factory buildings

### Factory Overhead Costs

12. Factory overhead costs include:

a. Direct materials and direct labor

b. Only indirect materials

c. Indirect materials, indirect labor, and other manufacturing costs

d. Selling and administrative expenses

13. Which of the following is classified as factory overhead cost?

a. Cost of wood for making guitars

b. Wages of assembly line workers

c. Heating and lighting the factory

d. Raw materials inventory

14. Factory overhead costs that do not directly enter the finished product include:

a. Cost of electronic components

b. Oil used to lubricate machinery

c. Tires for automobiles

 d. Wood for guitars

### Prime Costs and Conversion Costs

15. Prime costs consist of:

a. Direct materials and factory overhead costs

b. Direct labor and factory overhead costs

c. Direct materials and direct labor costs

d. Indirect materials and indirect labor costs

16. Conversion costs consist of:

a. Direct materials and direct labor costs

b. Direct labor and factory overhead costs

c. Factory overhead and selling expenses

d. Direct materials and selling expenses

17. Identify the following cost as a prime cost, conversion cost, or both: Wages of assembly
line employees.

a. Prime cost

b. Conversion cost

c. Both

d. Neither

### Product Costs and Period Costs

18. Product costs include:

a. Selling and administrative expenses

b. Direct materials, direct labor, and factory overhead costs

c. Only direct materials costs

d. Only factory overhead costs

19. Period costs are:

 a. Included in the cost of goods sold

b. Incurred in managing the company

c. Capitalized on the balance sheet

d. Directly traceable to the product

20. An example of a period cost is:

a. Leather used to make a baseball glove

b. Cost of endorsement from a professional baseball player

c. Direct labor costs

d. Factory overhead costs

### Answers

1. b. Generating revenues

2. c. Decision-making needs of management

3. c. A competitor's financial statement

4. a. Traced to a cost object

5. b. Cost of the wood used to make guitars

6. b. Cannot be identified with a cost object

7. b. Salaries of production supervisors

8. c. Direct materials cost, direct labor cost, and factory overhead cost

9. d. Lubricant for factory machinery

10. c. Be a significant portion of the total cost of the product

11. b. Wages of employees who assemble guitars

12. c. Indirect materials, indirect labor, and other manufacturing costs

13. c. Heating and lighting the factory

14. b. Oil used to lubricate machinery

15. c. Direct materials and direct labor costs

16. b. Direct labor and factory overhead costs

17. c. Both

18. b. Direct materials, direct labor, and factory overhead costs

19. b. Incurred in managing the company

20. b. Cost of endorsement from a professional baseball player

Sure, here are the answers to the multiple-choice questions:

1. b. Shareholders

2. c. Managerial reports

3. c. Monthly, quarterly, or yearly

4. d. Managers

5. c. Management decision making

6. d. They are tailored to the specific needs of management

7. b. Specific segments of the company

8. b. Future sales projections

9. c. Chief management accounting functions

10. b. Plant Manager

11. c. Providing support and advice to line departments

12. b. Planning, directing, controlling, improving, decision making

13. c. Developing long-term strategies

14. c. Directing

15. b. Management by exception

16. a. Eliminate the source of problems

17. b. Manufacturing costs

18. c. Performance report

19. c. Managerial accounting

20. b. Managerial accounting reports

Sure, here are all the answers listed:

1. b. Generating revenues

2. c. Decision-making needs of management

3. c. A competitor's financial statement

4. a. Traced to a cost object

5. b. Cost of the wood used to make guitars

6. b. Cannot be identified with a cost object

7. b. Salaries of production supervisors

8. c. Direct materials cost, direct labor cost, and factory overhead cost

9. d. Lubricant for factory machinery

10. c. Be a significant portion of the total cost of the product

11. b. Wages of employees who assemble guitars

12. c. Indirect materials, indirect labor, and other manufacturing costs

13. c. Heating and lighting the factory

14. b. Oil used to lubricate machinery

15. c. Direct materials and direct labor costs

16. b. Direct labor and factory overhead costs

17. c. Both

18. b. Direct materials, direct labor, and factory overhead costs

19. b. Incurred in managing the company

20. b. Cost of endorsement from a professional baseball player