Principles of Managerial Accounting Test Preparation
Course Introduction
Principles of Managerial Accounting introduces students to the fundamental concepts and techniques used by managers to make informed business decisions. The course covers topics such as cost behavior, cost-volume-profit analysis, budgeting, performance evaluation, and decision-making processes. Emphasis is placed on the use of accounting information for planning, controlling, and evaluating organizational operations. Through real-world examples and practical exercises, students develop analytical skills necessary for internal business analysis and strategic management.
Recommended Textbook
Horngren's Financial and Managerial Accounting The Managerial Chapters 6th Edition by Tracie
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12 Chapters
2214 Verified Questions
2214 Flashcards
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Chapter 15: Accounting Information Systems
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159 Verified Questions
159 Flashcards
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Sample Questions
Q1) An enterprise resource planning (ERP)is a ________.
A)hardware system that controls the access of employees to different levels of production in a firm
B)software system used by small companies to record revenue and expenses
C)hardware system of electronic linkages that allows different computers to share the same information
D)software system that can integrate all of a company's functions,departments,and data into a single system
Q2) Entry-level accounting software ________.
A)can handle advanced processes and transactions
B)is an affordable system that is difficult to use
C)allows businesses to enter sales of services and merchandise inventory,record expenses,and produce financial statements
D)integrates all of a company's functions,departments,and data into a single system
Q3) The cash receipts journal is a special journal used to record business transactions involving cash receipts and credit sales.
A)True
B)False
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Chapter 16: Introduction to Managerial Accounting
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230 Verified Questions
230 Flashcards
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Sample Questions
Q1) Viva,Inc.has provided the following information for the year: \[\begin{array} { | l | r | }
\hline \text { Cost of Goods Manufactured } & \$ 1,261,000 \\
\hline \text { Beginning Balance - Finished Goods Inventory } & 99,000 \\
\hline \text { Ending Balance - Finished Goods Inventory } & 85,000 \\
\hline
\end{array}\] What is the cost of goods sold?
A)$184,000
B)$1,275,000
C)$1,261,000
D)$1,247,000
Q2) In a manufacturing company,the salary of the sales staff is an example of a period cost.
A)True
B)False
Q3) In a manufacturing company,wages and benefits of factory managers are treated as product costs.
A)True
B)False
Q4) Define direct cost.
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Chapter 17: Job Order Costing
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191 Verified Questions
191 Flashcards
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Sample Questions
Q1) The flow of costs in a job order costing system ________.
A)cannot be determined until all jobs are complete
B)transfers all costs to manufacturing overhead
C)involves accumulating costs and then assigning costs to jobs
D)includes the major steps of accumulating and amortizing
Q2) In a manufacturing operation,depreciation of plant equipment should be debited to the Depreciation Expense account.
A)True
B)False
Q3) On June 30,Greenville Manufacturing finished Job 70 with total job costs of $40,000 and transferred the costs to Finished Goods Inventory.On July 6,Greenville completed the sale of the goods to a customer for $55,000 on account.Provide the entry to record the cost of goods sold.Omit explanation.Assume the perpetual inventory system is used.
Q4) Ivade,Inc.uses a predetermined overhead allocation rate of $75 per direct labor hour.In January,Ivade completed Job B23,which utilized 20 direct labor hours.Provide the journal entry to allocate overhead to the job.Omit explanation.
Q5) Why would the manager of a service company need to use job order costing?
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Page 5
Chapter 18: Process Costing
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173 Verified Questions
173 Flashcards
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Sample Questions
Q1) The Work-in-Process Inventory account of a department is credited when overallocation of manufacturing overhead occurs in that department.Process costing is used.
A)True
B)False
Q2) How is a production cost report prepared using the FIFO method?
Q3) Which of the following statements correctly describes the term "conversion costs"?
A)the cost to convert finished goods to sales to customers
B)the cost incurred for direct and indirect materials during production
C)the cost of direct materials,direct labor,and manufacturing overhead costs incurred during production
D)the cost of direct labor combined with manufacturing overhead
Q4) If 34,000 units are 80% complete with respect to direct materials,then the equivalent units of production for direct materials are ________.The weighted-average method is used.
A)34,000 units
B)27,200 units
C)6800 units
D)40,800 units
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Chapter
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181 Verified Questions
181 Flashcards
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Sample Questions
Q1) Which of the following is most likely to be categorized as an external failure cost?
A)the cost of testing a product before shipment
B)the cost of machinery maintenance to avoid breakdowns during production
C)the cost of lost future sales after a customer finds a defect in a product
D)the cost of inspection of materials to be used in production
Q2) A furniture manufacturer has decided that its use of a single plantwide predetermined overhead allocation rate is no longer accurate.In making the transition to using multiple predetermined overhead allocation rates,which of the following statements is incorrect?
A)With multiple overhead rates,there are multiple cost pools.
B)Management must analyze the expected overhead costs and separate them into a cost pool for each department.
C)With multiple overhead rates,there is one cost pool and multiple allocation bases.
D)The use of multiple predetermined overhead allocation rates is more complex,but it may be more accurate.
Q3) Managers can use activity-based management to make what two kinds of decisions?
Q4) What is the purpose of implementing a just-in-time inventory system?
Page 7
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Chapter 20: Cost-Volume-Profit Analysis
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197 Verified Questions
197 Flashcards
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Sample Questions
Q1) What is the margin of safety? List three ways in which margin of safety can be expressed.
Q2) If variable costs decrease,and all other factors remain the same,the margin of safety will become larger.
A)True
B)False
Q3) Complete the statement,using the following terms: increase,decrease,or have no effect on.
Increases in variable costs per unit ________ contribution margin per unit and ________ the breakeven point.
Q4) Which of the following costs do NOT change in total despite changes in volume within the relevant range?
A)fixed costs
B)variable costs
C)mixed costs
D)total production costs
Q5) An increase in sales price per unit decreases the contribution margin per unit. A)True
B)False
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Chapter 21: Variable Costing
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) Morwenna,Inc.reports the following information for August: \[\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 900,000 \\
\hline \text { Variable Cost of Goods Sold } & 120,000 \\
\hline \text { Fixed Cost of Goods Sold } & 60,000 \\
\hline \text { Variable Selling and Administrative Costs } & 150,000 \\
\hline \text { Fixed Selling and Administrative Costs } & 50,000 \\
\hline
\end{array}\] Calculate the operating income for August using absorption costing.
A)$520,000
B)$270,000
C)$1,100,000
D)$380,000
Q2) Variable costing considers only ________ costs when determining product costs.
A)fixed manufacturing
B)variable manufacturing
C)variable selling and administrative
D)fixed selling and administrative
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Chapter 22: Master Budgets
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181 Verified Questions
181 Flashcards
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Sample Questions
Q1) Mary's Mittens,Inc.,a merchandising company,wants to prepare the budgeted balance sheet for the next budget period.For this purpose,the amount of ending cash balance can be retrieved from the ________.
A)capital expenditures budget
B)budgeted funds flow statement
C)cash budget
D)sales budget
Q2) A manufacturing company has prepared the operating budget and the cash budget and is now preparing the budgeted balance sheet.The balance of Accounts Receivable can be obtained from the ________.
A)inventory,purchases and cost of goods sold budget
B)schedule of cash receipts from customers
C)capital expenditures budget
D)selling and administrative expenses budget
Q3) An objective of the budgeting process is to communicate a single,unified,comprehensive plan for the business.
A)True
B)False
Q4) List the three sections of the cash budget for a merchandising company.
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Chapter 23: Flexible Budgets and Standard Cost Systems
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218 Verified Questions
218 Flashcards
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Sample Questions
Q1) The total fixed overhead variance is the total of the variable overhead cost variance and fixed overhead volume variance.
A)True
B)False
Q2) An unfavorable sales volume variance in operating income suggests a(n)________.
A)increase in number of actual units sold when compared to the expected number of units sold
B)decrease in number of actual units sold when compared to the expected number of units sold
C)increase in variable cost per unit
D)decrease in fixed costs
Q3) A favorable sales volume variance in variable costs suggests a(n)________.
A)increase in number of actual units sold when compared to the expected number of units sold
B)decrease in number of actual units sold when compared to the expected number of units sold
C)increase in variable cost per unit
D)decrease in fixed costs
Q4) What does the fixed overhead volume variance measure?
Page 11
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Chapter 24: Responsibility Accounting and Performance Evaluation
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182 Verified Questions
182 Flashcards
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Sample Questions
Q1) Companies in which owners or top executives make all of the planning,directing and controlling decisions are ________ companies.
A)centralized
B)decentralized
C)formalized
D)segmented
Q2) Which of the following is an expanded form of calculating return on investment?
A)Profit margin ratio × Asset turnover ratio
B)Net profit ratio × Inventory turnover ratio
C)Gross profit ratio × EVA
D)Asset turnover ratio × Inventory turnover ratio
Q3) How is the use of a balanced scorecard as a performance evaluation system helpful to companies?
Q4) Define cost-based transfer price.When should cost-based transfer pricing be used? Explain your answer.
Q5) The balanced scorecard focuses only on lead indicators,because lag indicators are not important for performance evaluation.
A)True
B)False
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Chapter 25: Short-Term Business Decisions
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200 Verified Questions
200 Flashcards
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Sample Questions
Q1) Roseland Company is trying to decide whether to continue to manufacture a particular component or to buy the component from an outside supplier.Which of the following is irrelevant with respect to this decision?
A)the quality of the component purchased from the outside supplier
B)the outside supplier's ability to deliver the component on a timely basis
C)the alternative uses of the facilities currently being used to manufacture the component
D)the unavoidable fixed manufacturing costs associated with the manufacture of the component
Q2) Identify the four steps in the decision-making process.
Q3) An outsourcing decision is a choice made by management about whether to make a component internally or buy it from an outside source.
A)True
B)False
Q4) Tryniski Company is considering purchasing a new truck.The decision has been narrowed to two models.The cost of each of these two trucks is relevant to this business decision.
A)True
B)False
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Chapter 26: Capital Investment Decisions
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) An investment should be accepted if ________.
A)it has positive total cash inflows
B)it has a payback period in less than 10 years
C)the investment's rate of return is lower than the company's current year required rate of return
D)the net present value is positive
Q2) Cash inflows include future cash revenue generated from an investment and any future residual value of the asset but exclude any future savings in ongoing cash operating costs resulting from the investment.
A)True
B)False
Q3) Which of the following is correct about the payback method?
A)It considers only the cash flows that occur during the payback period.
B)It considers an asset's profitability.
C)It is normally the only method used when deciding whether to invest in an asset.
D)It is difficult to calculate.
Q4) Under what circumstances is the investment with the shortest payback the best choice? How should managers use the payback method?
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