Question

1

Which statement is true?

	Management uses financial information to analyze costs.
	Management uses financial information to plan internal operations.
	Management uses reports created for internal parties.
	All of the above are true.

Question

2

Which of the following are the internal decision makers of a company?

	Vendors
	Managers
	Shareholders
	Customers

Question

3

The primary goal of financial accounting is to provide information for

	governmental regulators.
	creditors.
	potential investors.
	all of the above.

Question

4

Which one of the following reports is most likely to require an audit by an outside entity?

	Monthly financial statements
	Annual financial budgets
	Annual financial statements
	All of the above

Question

5

The focus of management accounting is on

	tax preparation.
	external reporting.
	internal reporting.
	auditing.

Question

6

When manufacturing products, direct labor and direct materials are classified as

	period costs and expensed when incurred.
	product costs and expensed when the goods are sold.
	product costs and expensed when incurred.
	period costs and expensed when the goods are sold.

Question

7

Where would period costs be found on the financial statements?

	Under current assets on the balance sheet
	Under current liabilities on the balance sheet
	As operating expenses on the income statement in the period incurred
	As operating expenses on the income statement for a previous period

Question

8

Inventoriable product costs are best described by which of the following statements?

	A. They are expensed on the income statement when incurred.
	B. They include marketing and distribution costs.
	C. They are used for external reporting purposes.
	D. Both A and C are correct.

Question

9

Which of the following would not be considered a product cost for a manufacturer?

	Direct labor
	Direct materials
	Manufacturing overhead
	Freight out

Question

10

Which of the following is an example of a period cost when manufacturing products?

	Depreciation expense on factory equipment
	Advertising expense
	Indirect materials used in the factory
	Property taxes on the plant