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web.groovymark@gmail.com
- December 5, 2024
Question 41
What is an example of a nonfinancial metric that might be used in managerial accounting?
A. Sales revenue
B. Cost of goods sold
C. Customer satisfaction ratings
D. Return on investment
Answer: C
Explanation: Nonfinancial metrics, such as customer satisfaction ratings, provide valuable information for managerial decision-making beyond traditional financial measures.
Question 42
How is depreciation classified in cost accounting?
A. As a direct cost
B. As a period cost
C. As a product cost
D. As an opportunity cost
Answer: C
Explanation: Depreciation on factory equipment used in production is classified as a product cost and allocated to the cost of goods manufactured.
Question 43
Which of the following is an example of a fixed cost?
A. Utility costs that increase with production
B. Wages for production workers
C. Rent for a factory
D. Raw materials used in production
Answer: C
Explanation: Rent is considered a fixed cost because it remains constant regardless of the level of production or sales.
Question 44
What is the role of the Financial Accounting Standards Board (FASB)?
A. To establish financial accounting standards in the U.S.
B. To audit financial statements for public companies
C. To regulate the U.S. stock market
D. To set tax regulations for corporations
Answer: A
Explanation: The FASB sets generally accepted accounting principles (GAAP), which provide the framework for financial reporting in the U.S.
Question 45
What is the correct sequence for preparing financial statements?
A. Statement of cash flows, balance sheet, income statement
B. Income statement, balance sheet, statement of cash flows
C. Balance sheet, income statement, statement of cash flows
D. Statement of retained earnings, income statement, balance sheet
Answer: B
Explanation: The income statement is prepared first to determine net income, which is then used to complete the balance sheet and statement of cash flows.
Question 46
Which of the following is an example of variable costs?
A. Insurance premiums
B. Depreciation expense
C. Direct labor costs
D. Rent expense
Answer: C
Explanation: Variable costs, such as direct labor, fluctuate with production volume. As production increases, variable costs increase accordingly.
Question 47
Which financial statement shows a company’s profitability over a specific period?
A. Balance sheet
B. Statement of retained earnings
C. Income statement
D. Statement of cash flows
Answer: C
Explanation: The income statement shows a company’s revenues, expenses, and net income, indicating its profitability over a specific period.
Question 48
What is an example of an expense item?
A. Accounts receivable
B. Retained earnings
C. Cost of goods sold
D. Common stock
Answer: C
Explanation: Cost of goods sold is an expense item representing the direct costs of producing the goods that were sold during the period.
Question 49
Which account is summarized on the balance sheet?
A. Revenue
B. Owners’ equity
C. Cost of goods sold
D. Marketing expenses
Answer: B
Explanation: The balance sheet summarizes accounts such as assets, liabilities, and owners' equity, which represent the financial position of the company.
Question 50
How are wages for office staff classified in a merchandising company?
A. Direct labor expense
B. Administrative expense
C. Selling expense
D. Manufacturing overhead
Answer: B
Explanation: Wages for office staff in a merchandising company are classified as administrative expenses, as they are not tied directly to the production of goods.
