1. The costs of selling goods and administrative costs are reported on the income statement as expenses when inventory is sold.

- True

- False

2. Which of the following is not classified as a period cost?

- The cost of toner for the sales department laser printer.

- The cost of utilities for the factory building.

- The salary for the president of the company.

- The cost of the annual company holiday party.

3. Which of the following accounts is similar to the Inventory account of a merchandising company?

- Raw Materials Inventory

- Work in Process Inventory

- Finished Goods Inventory

- Manufacturing Overhead

4. When inventory is sold to customers, its cost is removed from Work in Process Inventory and transferred to Cost of Goods Sold.

- True

- False

5. Dividing overhead among various jobs is called overhead manipulation.

- True

- False