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Fundamental Financial Accounting Concepts, 10e (Edmonds) Chapter 1 An Introduction to Accounting Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You $22.72   Add to cart
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Fundamental Financial Accounting Concepts, 10e (Edmonds) Chapter 1 An Introduction to Accounting Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You
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Fundamental Managerial Accounting Concepts, 9e (Edmonds) Chapter 1 Management Accounting and Corporate Governance 1) Ashley Bradshaw is the manager of one department in a large store. In this capacity, which of the following kinds of information would she be interested in? A) Economic data B) Fi...

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  • September 16, 2023
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  • fundamental financial accounting concepts 10 ed

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,Fundamental Managerial Accounting Concepts, 9e (Edmonds)
Chapter 1 Management Accounting and Corporate Governance

1) Ashley Bradshaw is the manager of one department in a large store. In this capacity, which of
the following kinds of information would she be interested in?
A) Economic data
B) Financial data
C) Nonfinancial data
D) Financial, economic, and nonfinancial data

2) All of the following are features of managerial accounting except:
A) information is provided primarily to insiders such as managers.
B) information includes economic and non-financial data as well as financial data.
C) information is characterized by objectivity, reliability, consistency, and accuracy.
D) information is reported continuously with a present or future orientation.

3) Choose the answer that is not a distinguishing characteristic of financial accounting
information.
A) It is global information that reflects the performance of the whole company.
B) It is focused primarily on the future.
C) It is more concerned with financial data than physical or economic data.
D) It is more highly regulated than managerial accounting information.

4) Managerial accounting information is limited or restricted by which of the following
authorities or principles?
A) Securities and Exchange Commission
B) Generally Accepted Accounting Principles
C) Managerial Accounting Standards Board
D) Value-Added Principle

5) Select the incorrect statement regarding the relationship between type of user and type of
information.
A) Middle managers need more nonfinancial, or operational data than do senior executives.
B) Assembly line supervisors need more immediate feedback on performance than do senior
executives.
C) Senior executives need less aggregated information than do lower-level managers.
D) Senior executives use general economic information as well as financial information.

6) Select the correct statement regarding managerial and financial accounting.
A) Users of managerial accounting information desire greater aggregation than do users of
financial accounting information.
B) Both managerial and financial accounting use economic and physical data in addition to
financial data.
C) Financial accounting is more highly regulated than managerial accounting.
D) Timeliness is more important in financial accounting than in managerial accounting.


1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.

,7) Which of the following most exemplifies the value-added principle?
A) An ongoing process where continuous improvement is the goal.
B) A competitive management program that emphasizes quality.
C) Information gathering and reporting activities should be restricted to those activities that add
value in excess of their cost.
D) Managerial accounting information is measured in economic, physical, and financial terms.

8) Which of the following costs would be classified as a direct cost for a company that produces
motorcycles?
A) Rent of manufacturing facility that produces motorcycles.
B) Seats used in the motorcycles.
C) Wages of motorcycle assembly workers.
D) Both seats used in the motorcycles and wages of motorcycle assembly workers are correct.

9) Which of the following is a product cost for a construction company?
A) Cost of transporting raw materials to the job site
B) Wages paid to the company's payroll clerk
C) Rent of the company's main office
D) All of these.

10) For a manufacturing company, product costs include all of the following except:
A) indirect material costs.
B) warehousing costs of finished goods.
C) direct labor costs.
D) All of these are product costs.

11) During its first year of operations, Connor Company paid $50,000 for direct materials and
$36,000 in wages for production workers. Lease payments and utilities on the production
facilities amounted to $14,000. General, selling, and administrative expenses were $16,000. The
company produced 5,000 units and sold 4,000 units for $30.00 a unit. The average cost to
produce one unit is which of the following amounts?
A) $20.00
B) $16.00
C) $18.40
D) $25.00

12) During its first year of operations, Forrest Company paid $30,000 for direct materials and
$50,000 in wages for production workers. Lease payments, utility costs, and depreciation on
factory equipment totaled $15,000. General, selling, and administrative expenses were $20,000.
The average cost to produce one unit was $2.50. How many units were produced during the
period?
A) 40,000
B) 46,000
C) 38,000
D) None of these.


2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.

, 13) Why do accountants normally calculate cost per unit as an average?
A) Determining the exact cost of a product is virtually impossible.
B) Some manufacturing-related costs cannot be accurately traced to specific units of product.
C) Even when producing multiple units of the same product, normal variations occur in the
amount of materials and labor used.
D) All of these are justifications for computing average unit costs.

14) Which of the following costs is not considered a period cost?
A) Warehousing costs
B) Depreciation of delivery vehicles
C) Salaries paid to company executives
D) Freight paid on a purchase of raw materials

15) Select the incorrect statement regarding costs and expenses.
A) Some costs are initially recorded as expenses while others are initially recorded as assets.
B) Expenses are incurred when assets are used to generate revenue.
C) Manufacturing-related costs are initially recorded as expenses.
D) Non-manufacturing costs should be expensed in the period in which they are incurred.

16) Which of the following costs should be recorded as an expense?
A) Salary of administrative employee
B) Depreciation of manufacturing equipment
C) Insurance for the factory building
D) All of these are expenses.

17) Which of the following costs should not be recorded as an expense?
A) Insurance on factory building
B) Sales commissions
C) Product shipping costs
D) Product advertising

18) Which of the following transactions would cause net income for the period to decrease?
A) Paid $2,500 cash for raw material cost
B) Purchased $8,000 of merchandise inventory
C) Recorded $5,000 of depreciation on production equipment
D) Used $2,000 of office supplies

19) Which of the following statements is true with regard to product costs versus general, selling,
and administrative costs?
A) Product costs associated with unsold units appear on the income statement as general
expenses.
B) General, selling, and administrative costs appear on the balance sheet.
C) Product costs associated with units sold appear on the income statement as cost of goods sold.
D) None of these are true.



3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.

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