I. TRUE OR FALSE QUESTIONS: Mark an A for True and B for False on the Self Quiz or email as an excel attachment your answers to your instructor. 1. _____. Managerial accounting reports are prepared according to generally accepted accounting principles.

2. _____. The principle of usefulness to management is the primary criterion for the preparation of managerial accounting reports

. 3. _____. A cost is a payment of cash for the purpose of generating revenues.

4. _____. The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

5. _____. If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as direct materials cost.

6. _____. Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as factory overhead cost.

7. _____. Prime cost is the combination of direct labor cost and factory overhead cost.

8. _____. Product costs are also referred to as inventoriable costs.

9. _____. Direct labor cost is an example of a period cost.

10. _____. A manufacturing enterprise reports two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

11. _____. The assignment of product costs to direct materials, work in process, and finished goods inventories allows for the proper determination of net income for the period.

12. _____. Factory overhead is applied to production using a predetermined overhead rate.