For questions 1-10 answer true or false.

1. Cash paid to production workers should be recovered as Wages Expense in the income statement for the period incurred. T/F

2. A just-in-time system can lower inventory holding costs and increase customer satisfaction. T/F

3. If product costs are misclassified as selling costs, the average cost per unit will be understated. T/F

4. Product Costs include materials, labor, and selling and administrative costs. T/F

5. With respect to income taxes, managers would prefer to classify costs as assets rather than expenses. T/F

6. Under the terms of the Sarbanes-Oxley Act, a company and its external auditors are required to report on the effectiveness of the company's system of internal controls. T/F

7. Managerial accounting focuses primarily on the performance of the company as a whole. T/F

8. According to the Sarbanes-Oxley Act, a company's audit committee is responsible for its system of internal controls. T/F

9. Karen is a Certified Management Accountant and is bound by the IMA's Standard of Ethical Content. Her superior has asked her to try to influence the firm's outside auditors with expensive gifts and favors. if Karen complies, she will violate the competence standard. T/F

10. Misclassifying a product cost as a period cost will usually cause the income statement to be incorrect, but the balance sheet will not be affected. T/F