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| 1.
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An accounting system that uses periodic inventories in accounting for its manufacturing operations is called a cost accounting system. |
| | A) | True |
| | B) | False |
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| 2.
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The four factors that come together in the production activity are: beginning goods in process inventory, direct materials, direct labour, and overhead. |
| | A) | True |
| | B) | False |
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| 3.
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The manufacturing statement (also called a schedule of manufacturing activities or a schedule of cost of goods manufactured) contains information useful to outside parties and is therefore included among the financial statements required by GAAP to be published. |
| | A) | True |
| | B) | False |
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| 4.
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A schedule of cost of goods manufactured can be used in place of the section on the income statement titled cost of goods sold. |
| | A) | True |
| | B) | False |
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| 5.
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The difference between a general accounting system and a cost accounting system is the inventory system used under each system. |
| | A) | True |
| | B) | False |
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| 6.
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There are two basic types of cost accounting systems: job order cost accounting and manufacturing cost accounting. |
| | A) | True |
| | B) | False |
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| 7.
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A unique product or service that is produced to meet the demands of a particular customer is called a 'job lot'. |
| | A) | True |
| | B) | False |
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| 8.
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Job order operations are limited to manufacturing operations. |
| | A) | True |
| | B) | False |
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| 9.
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Job costs sheets serve as a subsidiary ledger to the Goods in Process Inventory account. |
| | A) | True |
| | B) | False |
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| 10.
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A materials ledger card is a subsidiary record of a raw materials item that stores data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory. |
| | A) | True |
| | B) | False |
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| 11.
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The accounting department records the transfer of raw materials to the goods in process account when a purchases requisition is issued. |
| | A) | True |
| | B) | False |
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| 12.
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A clock card is a source document that an employee uses to report how much time was spent working on a particular job. |
| | A) | True |
| | B) | False |
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| 13.
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The application of factory overhead to goods in process (job cost sheets) is usually accomplished by means of a predetermined overhead allocation rate. |
| | A) | True |
| | B) | False |
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| 14.
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The ending balance of the overhead account, after application to the goods in process, is always closed to the Cost of Goods Sold account at the end of the accounting period. |
| | A) | True |
| | B) | False |
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| 15.
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Any underapplied or overapplied balance in the Factory Overhead account must be allocated to the Goods in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold accounts. |
| | A) | True |
| | B) | False |
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| 16.
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When the amount by which the overhead applied to jobs during a period using the predetermined overhead application rate exceeds the overhead incurred during the period, the overhead account will be overapplied. |
| | A) | True |
| | B) | False |
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| 17.
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Two costs accumulated on job cost sheets are direct materials and direct labour. |
| | A) | True |
| | B) | False |
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| 18.
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When the factory overhead account has a credit balance at the end of a period, it means that the account is underapplied. |
| | A) | True |
| | B) | False |
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| 19.
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A cost accounting system uses a manufacturing summary account, similar to the income summary account, to capture all the manufacturing expenses. |
| | A) | True |
| | B) | False |
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| 20.
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Overapplied or underapplied overhead exists at the end of a period because the predetermined overhead allocation rate is used. |
| | A) | True |
| | B) | False |
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