1. Activities that involve the purchase of merchandise and the sale of goods and services to customers, including expenses of running the business, are classified as:

a.Investing activities.

b.Financing activities.

c.Indirect activities.

d.Operating activities.

e.Direct activities.

2. The entry to record direct materials put into production is:

a.Debit WIP, Credit Materials

b.Debit Materials, Credit FOH

c.Debit COGS, Credit Materials

d.Debit Materials, Credit WIP

e.None of these

3. Which of the following five types of products is least likely to be produced in a process manufacturing system?

a.Calculators.

b.Compact disks.

c.Slacks for casual wear.

d.Baseball hats.

e.Wedding invitations.

4. What is the entry to record purchases of raw materials on account?

a.Debit Accounts Payable, Credit Materials

b.Debit Materials, Credit COGS

c.Debit Materials, Credit WIP

d.Debit Materials, Credit Accounts Payable

e.Debit Materials, Credit Cash

5. An opportunity cost is:

a.A sunk cost.

b.A direct cost.

c.An uncontrollable cost.

d.A cost of potential benefit lost.

e.A change in the cost of a component.