Managerial Accounting True-False Statements

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Managerial Accounting True-False Statements in $3.50 only

1. Reports prepared in financial accounting are general-purpose reports, whereas reports

prepared in managerial accounting are usually special-purpose reports.

2. Managerial accounting information generally pertains to an entity as a whole and is highly aggregated.

3. Managerial accounting applies to all forms of business organizations.

4. Determining the unit cost of manufacturing a product is an output of financial accounting.

5. Managerial accounting internal reports are prepared more frequently than are classified financial statements.

6. The management function of directing and motivating is mainly concerned with setting goals and objectives for the entity.

7. An organization chart in a manufacturing company replaces the chart of accounts.

8. Controlling is the process of determining whether planned goals are being met.

9. Decision-making is an integral part of the planning, directing and motivating, and controlling functions.

10. Both direct labor cost and indirect labor cost are product costs.

11. Manufacturing costs that cannot be classified as direct material or direct labor are classified as manufacturing overhead.

12. Raw materials are equal to direct materials minus indirect materials.

13. Raw materials that can be conveniently and directly associated with a finished product are called material overhead.

14. The total cost of a finished product does not generally contain equal amounts of material, labor, and overhead costs.

15. Direct material costs and indirect material costs are prime costs.

16. Conversion costs consist of direct labor and manufacturing overhead.

17. Indirect materials and indirect labor are both inventoriable costs.

18. Direct labor costs subtracted from prime costs equals manufacturing overhead costs.

19. Total period costs are deducted from total cost of work in process to calculate cost of goods manufactured.

20. Period costs are not inventoriable costs.

21. Ending finished goods inventory appears on both the balance sheet and the income statement of a manufacturing company.

22. The beginning work in process inventory appears on both the balance sheet and the cost

of goods manufactured schedule of a manufacturing company.

23. In calculating gross profit for a manufacturing company, the cost of goods manufactured is deducted from net sales.

24. Finished goods inventory does not appear on a cost of goods manufactured schedule.

25. If the ending work in process inventory is greater than the beginning work in process inventory, then the cost of goods manufactured will be less than total manufacturing costs for the period.

26. Finished goods inventory for a manufacturing company is equivalent to merchandise inventory for a merchandising company.

27. Raw materials inventory is not an asset until it is used to make a product.

28. Raw materials inventory shows the cost of completed goods available for sale to customers.

29. In preparing closing entries for a manufacturing company, all revenue and expense account balances are closed to a Manufacturing Summary account.

30. To balance the Cost of Goods Manufactured columns of a work sheet for a manufacturing company, an entry must be made in the income statement debit column.

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