Acct1003 : Quiz On Cost And Management Accounting! Trivia Quiz

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| By Dorinda Powell

Dorinda Powell, Accounting

Dorinda is an Accounting Supervisor with a strong background in the medical practice and hotel industries. She excels in financial analysis, Microsoft Office, and people management.

Quizzes Created: 2 | Total Attempts: 11,137

Questions: 5 | Attempts: 1,039 | Updated: Mar 21, 2023

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Acct1003 : Quiz On Cost And Management Accounting! Trivia Quiz - Quiz

Below is an ACCT 1003 quiz on cost and management accounting. The cost and management perspective are comparative in the provision of data and analyses reports that can be used by managers to make decisions that will lead to long term profits and growth in an entity. Test your knowledge in Cost And Management Accounting by taking this quiz and prepping for the exam.

Questions and Answers

1.

When a continuous record is kept of the quantities and cost of merchandise on hand, the inventory system is referred to as periodic.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The explanation for the given answer is that when a continuous record is kept of the quantities and cost of merchandise on hand, the inventory system is referred to as perpetual, not periodic. In a perpetual inventory system, the inventory is continuously updated and tracked in real-time, whereas in a periodic inventory system, the inventory is only counted periodically, usually at the end of a specific period. Therefore, the statement that the inventory system is referred to as periodic when a continuous record is kept is incorrect.

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2.

Operating expenses and product costs are expensed when the product is sold.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
Operating expenses and product costs are not expensed when the product is sold. Instead, operating expenses are expensed as they are incurred, regardless of when the product is sold. On the other hand, product costs are expensed when the product is manufactured or produced, not when it is sold. Therefore, the correct answer is False.

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3.

In the Cost of Goods Sold section, ‘Purchases’ are used on the merchandiser’s income statement while ‘Cost of Goods Manufactured’ is used on the manufacturer’s income statement.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
The explanation for the given correct answer is that the term "Purchases" is used on the income statement of a merchandiser to represent the cost of acquiring the goods that are sold to customers. On the other hand, the term "Cost of Goods Manufactured" is used on the income statement of a manufacturer to represent the cost of producing the goods that are sold. Therefore, the statement is true as the two terms are used differently depending on the type of business.

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4.

Financial accounting differs from management accounting in that management accounting provides information on demand since management requires information to be furnished quickly.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Financial accounting and management accounting are two distinct branches of accounting. Financial accounting focuses on preparing financial statements and reports for external stakeholders, such as investors, creditors, and regulatory authorities. On the other hand, management accounting is concerned with providing information to internal stakeholders, particularly management, to aid in decision-making and control. One key difference between the two is the timing of information provision. Financial accounting follows a set reporting period and provides historical data, while management accounting provides real-time or on-demand information to meet the immediate needs of management. Therefore, the statement that management accounting provides information on demand is true.

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5.

Labour costs that are directly traceable to the product are part of manufacturing overhead.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
Labour costs that are directly traceable to the product are not part of manufacturing overhead. These costs, known as direct labor costs, are directly associated with the production of goods and are therefore classified as part of the cost of goods sold (COGS) rather than manufacturing overhead. Manufacturing overhead includes indirect costs such as factory rent, utilities, and depreciation of equipment.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
May 26, 2011

Quiz Created by
Dorinda Powell

Acct1003 : Quiz On Cost And Management Accounting! Trivia Quiz

When a continuous record is kept of the quantities and cost of merchandise on hand, the inventory system is referred to as periodic.

Operating expenses and product costs are expensed when the product is sold.

In the Cost of Goods Sold section, ‘Purchases’ are used on the merchandiser’s income statement while ‘Cost of Goods Manufactured’ is used on the manufacturer’s income statement.

Financial accounting differs from management accounting in that management accounting provides information on demand since management requires information to be furnished quickly.

Labour costs that are directly traceable to the product are part of manufacturing overhead.