I will only give points for correct answers. Short explanation by the multiple c
ID: 2503854 • Letter: I
Question
I will only give points for correct answers. Short explanation by the multiple choice question please.
Multiple choice Questions
Which of the following expenses are reported on the income statement as expenses when they are incurred?
Product costs
Period costs
Indirect material
Direct material
Manufacturing costs are first recorded as an asset on the balance sheet and then expensed on the income statement at the time
They are purchased
They are put into production
They are completed.
They are sold.
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
Which of the following is not included in the schedule of cost of goods manufactured?
Direct materials in inventory
Direct materials used in production
Direct labor
Overhead
Which of the following is not a characteristic of a bottom-up budget environment?
Executive management creates the budget.
At each higher level of management, the budget is reviewed and may be altered.
The budget approach may also be referred to as participative budgeting.
All of the above are characteristics of a bottom-up budget environment.
Overhead is typically divided into which of the following components?
Direct and indirect
Fixed and variable
Product and period
Controllable and non-controllable.
Product costs
Period costs
Indirect material
Direct material
Explanation / Answer
3. Which of the following expenses are reported on the income statement as expenses when they are incurred?
Period costs
Period costs are all the costs that are not included in product costs. These costs are expensed on the income statement in the period in which they are incurred, using the usual rules of accrual accounting that we learn in financial accounting.
4. Manufacturing costs are first recorded as an asset on the balance sheet and then expensed on the income statement at the time
They are completed.
initially, product costs are assigned to an inventory account on the balance sheet. When the goods are sold, the costs are released from inventory as expense and matched against sales revenue.
5. Which of the following accounts is similar to the Inventory account of a merchandising company?
Finished Goods Inventory
Wholesale and retail companies purchase goods that are primarily in finished form. These companies are intermediaries in the process of moving goods from the manufacturer to the end-user. They often are referred to as merchandising companies and their inventory as merchandise inventory.
6. Which of the following is not included in the schedule of cost of goods manufactured?
Direct materials in inventory
7. Which of the following is not a characteristic of a bottom-up budget environment?
Executive management creates the budget.
The bottom-up budget environment approach is driven by involving lower-level employees in the budget development process. Top management may initiate the budget process with general budget guidelines, but it is the lower-level units that drive the development of budgets for their units.
8. Overhead is typically divided into which of the following components?
Fixed and variable
Overhead refers to all non-labor expenses required to operate your business. These expenses are either
fixed or variable.