1- Gross profit less direct operating expenses equals

a. gross profit.

b. net income.

c. indirect operating expenses.

d. direct operating margin.

2- The parts department shows gross sales of $116,000 and cost of goods sold of $38,000. What is the gross profit percentage of the parts department?

a. 48.7%

b. 32.8%

c. 51.3%

d. 67.2%

3- The inventory accounts used in a manufacturing business are

a. merchandise, materials, and work in process.

b. merchandise, work in process, and finished goods.

c. materials, work in process, and finished goods.

d. merchandise, materials, and finished goods.

4- A cost accounting system uses which of the following inventory systems?

a. perpetual system

b. a hands-on system

c. periodic system

d. both a periodic and perpetual system

5- Materials that enter into and become a significant part of the finished product are called

a. direct materials.

b. administrative expenses.

c. indirect materials.

d. operating expenses.

6- The purchase of direct and indirect materials on account during the month requires an entry

a. debiting Work in Process and crediting Materials.

b. debiting Materials and crediting Work in Process.

c. debiting Accounts Payable and crediting Materials.

d. debiting Materials and crediting Accounts Payable.

7- The entry to record other factory overhead costs incurred during the month would include

a. a debit to Factory Overhead.

b. a credit to Factory Overhead.

c. a credit to Work in Process.

d. a debit to Work in Process.

8- Which of the following accounts on the manufacturing company work sheet is NOT an asset account?

a. work in process inventory

b. factory overhead

c. finished goods inventory

d. prepaid insurance

9- The adjusting entry to apply factory overhead to the work in process ending inventory includes

a. debiting Factory Overhead and crediting Finished Goods Inventory.

b. debiting Finished Goods Inventory and crediting Factory Overhead.

c. debiting Work in Process Inventory and crediting Factory Overhead.

d. debiting Factory Overhead and crediting Work in Process Inventory.

10- Factory supplies used during the year is adjusted by

a. debiting Factory Supplies and crediting Factory Supplies Expense.

b. debiting Office Supplies Expense and crediting Factory Supplies Payable.

c. debiting Factory Overhead and crediting Factory Supplies.

d. debiting Factory Supplies Expense and crediting Factory Supplies.

11- If factory overhead applied is less than the adjusted debit balance of Factory Overhead, the difference is known as

a. cost of goods sold.

b. overabsorbed overhead.

c. overapplied overhead.

d. underapplied overhead.

12- The depreciation of factory equipment is adjusted by

a. debiting Accumulated Depreciation-Factory Equipment and crediting Factory Overhead.

b. debiting Depreciation Expense and crediting Factory Equipment.

c. debiting Accumulated Depreciation-Factory Equipment and crediting Depreciation Expense.

d. debiting Factory Overhead and crediting Accumulated Depreciation-Factory Equipment.