Strayer ACC560 Week 3 Quiz 2

ACC 560 WK 3 Quiz 2TRUE-FALSE STATEMENTSCost accounting is primarily concerned with accumulating information about product costs. 2. A job order cost system is most appropriate when a large volume of uniform products are produced. 3. A process cost accounting system is appropriate for similar products that are continuously mass produced. 4. The perpetual inventory method cannot be used in a job order cost system. 5. A job order cost system and a process cost system are two alternative methods for valuing inventories. 6. A job order cost system identifies costs with a particular job rather than with a set time period. 7. A company may use either a job order cost system or a process cost system, but not both. 8. Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used. 9. Accumulating and assigning manufacturing costs are two important activities in a job order cost system. 10. Recording the acquisition of raw materials is a part of accumulating manufacturing costs. 11. Manufacturing costs are generally incurred in one period and recorded in a subsequent period. 12. The Purchases account is credited for all raw materials purchase returns and allowances. 13. When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs. 14. When raw materials are purchased, the Work in Process Inventory account is debited. 15. Factory labor should be assigned to selling and administrative expenses on a proportionate basis. 16. Fringe benefits and payroll taxes associated with factory workers should be accumulated as a part of Factory Labor. 17. Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory. 18. In a job order cost system, each entry to the Work In Process Inventory account should be accompanied by a posting to one or more job cost sheets. 19. Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used. 20. Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred. 21. There should be a separate job cost sheet for each job.22. Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job. 23. The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity. 24. Actual manufacturing overhead costs should be charged to the Work in Process Inventory account as they are incurred. 25. A good system of internal control requires that the job order cost sheet be destroyed as soon as the job is complete. 26. Finished Goods Inventory is charged for the cost of jobs completed during a period. 27. When goods are sold, the Cost of Goods Sold account is debited and Work in Process Inventory account is credited. 28. Total manufacturing costs for a period consists of the costs of direct materials used, the cost of direct labor incurred, and the manufacturing overhead applied during the period. 29. Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs. 30. At the end of the year, the accountant credits the amount of the overapplied overhead to Cost of Goods Sold. 31. A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company. 32. The cost of raw materials purchased is credited to Raw Materials Inventory when materials are received. 33. Requisitions for direct materials are posted daily to the individual job cost sheets. 34. The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base. 35. At the end of the year, underapplied overhead is usually credited to Cost of Goods Sold.MULTIPLE CHOICE QUESTIONS 36. Which of the following is one of the components of cost accounting?a. It involves measuring product costs.b. It involves the determination of company profits.c. It requires GAAP to be applied.d. It requires cost minimizing principles. 37. A major purpose of cost accounting is toa. classify all costs as operating or nonoperating.b. measure, record, and report period costs.c. provide information to stockholders for investment decisions.d. measure, record, and report product costs. 38. The two basic types of cost accounting systems area. job order and job accumulation systems.b. job order and process cost systems.c. process cost and batch systems.d. job order and batch systems. 39. A process cost system would most likely be used by a company that makesa. motion pictures.b. repairs to automobiles.c. breakfast cereal.d. college graduation announcements.40. Which of the following would be accounted for using a job order cost system?a. The production of personal computers.b. The production of automobiles.c. The refining of petroleum.d. The construction of a new campus building. 41. Process costing is used whena. the production process is continuous.b. production is aimed at filling a specific customer order.c. dissimilar products are involved.d. costs are to be assigned to specific jobs. 42. Process costing is not used whena. similar goods are being produced.b. large volumes are produced.c. jobs have distinguishing characteristics.d. a series of connected manufacturing processes is necessary. 43. An important feature of a job order cost system is that each joba. must be similar to previous jobs completed.b. has its own distinguishing characteristics.c. must be completed before a new job is accepted.d. consists of one unit of output. 44. As of December 31, 2013, Stand Still Industries had $2,500 of raw materials inventory. At the beginning of 2013, there was $2,000 of materials on hand. During the year, the company purchased $325,000 of materials; however, it paid for only $312,500. How much inventory was requisitioned for use on jobs during 2013?a. $312,000b. $324,500c. $325,500d. $313,000 45. The flow of costs in a job order cost systema. involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done.b. cannot be measured until all jobs are complete.c. measures product costs for a set time period.d. generally follows a LIFO cost flow assumption. 46. In a job order cost accounting system, the Raw Materials Inventory account isa. an expense.b. a control account.c. not used.d. a period cost. 47. When a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made isa. Finished Goods Inventory Direct Materials Direct Labor Manufacturing Overheadb. Work In Process Inventory Direct Materials Direct Labor Manufacturing Overheadc. Raw Materials Inventory Work In Process Inventoryd. Finished Goods Inventory Work In Process Inventory 48. The two major steps in the flow of costs area. allocating and assigning.b. acquiring and accumulating.c. accumulating and assigning.d. accumulating and amortizing. 49. The Raw Materials Inventory account isa. a subsidiary account.b. debited for invoice costs and freight costs chargeable to the purchaser.c. debited for purchase discounts taken.d. debited for purchase returns and allowances. 50. Records of individual items of raw materials would not be maintaineda. electronically.b. manually.c. on stores ledger cards.d. in the Raw Materials Inventory account.51. Cost of raw materials is debited to Raw Materials Inventory when thea. materials are ordered.b. materials are received.c. materials are put into production.d. bill for the materials is paid. 52. Which of the following is not included in factory labor costs?a. Gross earnings.b. Net earnings.c. Fringe benefits.d. Employer payroll taxes. 53. All of the following would be entries in assigning accumulated costs to the Work In Process Inventoryexcept:a. the purchase of raw materials.b. raw materials are used.c. overhead is applied.d. factory labor is used. 54. Factory labor costsa. are accumulated in a control account.b. do not include pension costs.c. include vacation pay.d. are based on workers’ net pay. 55. Factory Labor is a(n)a. expense account.b. control account.c. subsidiary account.d. temporary account. 56. Kline Manufacturing has the following labor costs:Factory—Gross wages $490,000Factory—Net wages 420,000Employer Payroll Taxes Payable 50,000The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor fora. $540,000.b. $490,000.c. $470,000.d. $440,000. 57. Factory labor costsa. accumulate in advance of utilization.b. accumulate in a control account.c. include sick pay earned by factory workers.d. accumulate in the Factory Labor Expense account. 58. Which of the following is not a control account?a. Manufacturing Overheadb. Factory Laborc. Accounts Receivabled. Raw Materials Inventory 59. Manufacturing Overhead would not have a subsidiary account fora. utilities.b. property taxes.c. insurance .d. raw materials inventory. 60. The entry to record the acquisition of raw materials on account isa. Work in Process Inventory Accounts Payableb. Manufacturing Overhead Raw Materials Inventory Accounts Payablec. Accounts Payable Raw Materials Inventoryd. Raw Materials Inventory Accounts PayableMore Questions are Included.