Question :
51. The acquisition cost of manufactured inventories does not include which : 1246034
51. The acquisition cost of manufactured inventories does not include which category of costs?
A. Administrative
B. Manufacturing Overhead
C. Raw Materials
D. Direct Materials
E. Direct Labor
52. Which of the following is/are true regarding the Raw Materials Inventory account?
A. The Raw Materials Inventory account includes the cost of raw materials purchased but not yet transferred to the factory floor.
B. The manufacturing firm records purchases of raw materials as debits to the Raw Materials Inventory account.
C. When the manufacturer physically transfers raw materials to the factory floor, it also transfers the cost of the raw materials from the Raw Materials Inventory account to the Work-in-Process Inventory account.
D. When the manufacturer physically transfers raw materials to the factory floor, it records this transfer as a credit to the Raw Materials Inventory account for the cost of the raw materials transferred and a debit to the Work in Process Inventory account.
E. all of the above
53. Which of the following is/are not true regarding the Raw Materials Inventory account?
A. The Raw Materials Inventory account includes the cost of raw materials purchased but not yet transferred to the factory floor.
B. The merchandising firm records purchases of raw materials as debits to the Raw Materials Inventory account.
C. When the manufacturer physically transfers raw materials to the factory floor, it also transfers the cost of the raw materials from the Raw Materials Inventory account to the Work-in-Process Inventory account.
D. When the manufacturer physically transfers raw materials to the factory floor, it records this transfer as a credit to the Raw Materials Inventory account for the cost of the raw materials transferred and a debit to the Work in Process Inventory account.
E. all of the above
54. Which of the following is/are true regarding the Work-in-Process Inventory account?
A. The Work-in-Process Inventory account accumulates the cost of raw materials transferred to the factory floor.
B. The Work-in-Process Inventory account accumulates the cost of direct labor used in production.
C. The Work-in-Process Inventory account accumulates the manufacturing overhead costs.
D. The Work-in-Process Inventory account is credited for the manufacturing costs assigned to the finished units transferred to the finished goods storeroom.
E. all of the above
55. Which of the following is not true regarding the Work-in-Process Inventory account?
A. The Work-in-Process Inventory account accumulates the cost of raw materials transferred to the factory floor.
B. The Work-in-Process Inventory account accumulates the cost of direct labor used in production.
C. The Work-in-Process Inventory account accumulates the manufacturing overhead costs.
D. The Work-in-Process Inventory account accumulates the administrative costs.
E. The Work-in-Process Inventory account is credited for the manufacturing costs assigned to the finished units transferred to the finished goods storeroom.
56. Which of the following is/are not true regarding a merchandising firm?
A. Inventory appears on the merchandiser’s balance sheet initially as an asset.
B. Inventory is measured at acquisition cost.
C. When a sale takes place, the firm recognizes the cost of the inventory as an expense (cost of goods sold) on the income statement.
D. When a sale takes place, the firm recognizes the inventory reduction on the statement of cash flows.
E. All of the above are false regarding a merchandising firm.
57. Which of the following is/are false regarding a merchandising firm?
A. A merchandising firm purchases inventory for resale.
B. A merchandising firm does not change the physical form of the inventory.
C. A merchandising firm performs no incremental work on the inventory.
D. A merchandising firm adds nothing to the acquisition cost of the inventory after it is purchased.
E. None of the above are false regarding a merchandising firm.
58. Which of the following is/are not true regarding a manufacturing firm?
A. A manufacturing firm incurs costs as it produces goods by changing the physical form of raw materials.
B. The product costs for a manufacturing firm are the costs incurred in manufacturing goods for sale.
C. The costs to produce finished goods inventory for a manufacturing firm do not become expenses until the firm sells the product.
D. Prior to sale, the production costs of a a manufacturing firm represent the transformation of assets from one form into another.
E. Product costs for a manufacturing firm are treated as period costs during the period that the inventory is finished and ready for sale.
59. The sales manager of Sebastian Company failed to record a valid sale on account of merchandise that had been shipped to a customer prior to the end of the current year; however, the company uses a periodic method of accounting for inventory and the merchandise had been properly excluded from inventory at the end of the current year. As a result of this error, Sebastian Company’s
A. total assets are overstated for the current year.
B. total expenses are understated for the current year.
C. net income is overstated for the current year.
D. total assets are understated at the end of the current year.
E. none of the above.
60. For manufacturing firms, the cost of completed products remains on the balance sheet as __________ assets until the firm sells the products; upon sale, the cost of the assets becomes a cost of goods sold expense.
A. Direct Materials Inventory
B. Work-in Progress Inventory
C. Finished Goods Inventory
D. Cost of Products Ready for Sale
E. none of the above
