1. One way to group companies is: manufacturing companies, merchandising companies, and global companies a) Truc b) False 2. Managerial or cost accounting concepts apply to manufacturing and merchandising companies, but not to other types of companies. 2) True b) False 3. Both financial and managerial statements should bo prepared according to GAAP (generally accepted accounting principles) 3) True b) False 4. The purpose of managerial accounting is mostly to help management make informed decisions using the data on mutagerial accounting reports. 3) True b) Falso 5. First division of costs a company is between period costs and product costs a) The b) False 6. At a manufacturing company, product costs are sub-divided into direct materials, direct labor, manufacturing overhead, and post-manufacturing overhead. a) True b) False 7. Period costs include such expenses as sales commission, advertisement, office employees' salaries, depreciation on office building, etc. a) True b) False 8. On a balance sheet of manufacturing company, direct materials, indirect materials, direct labor, indirect labor, and factory overhead are reported as inventories. a) True b) False 9. Work-in-process is an inventory account and has a normal debit balance. a) True b) False 10. Statement of cost of goods manufactured shows changes in work-in-process account for the period. I a) True b) False 11. Prime costs consist of direct materials cost and direct labor cost, while conversion costs consist of indirect materials cost and factory overhead cost. a) True b) False