TRUE OR FALSE

-------- 1. Reports prepared in financial accounting are general-purpose reports, whereas

reports prepared in managerial accounting are usually special-purpose reports.
-------- 2. Managerial Accounting internal reports are prepared more frequently than are
classified financial statements.
-------- 3. Determining the unit cost of manufacturing a product is an output of financial
accounting.
-------- 4. Management accounting applies to all form of business organization.
-------- 5. Controlling is the process of determining whether planned goals are being met.
-------- 6. Managerial Accounting information generally pertains to an entity as a whole and is
highly aggregated.
-------- 7. Job order costing system is for allocating costs to group of unique product and is
applicable to the production of customer specified products such as the manufacture of
special machine.
-------- 8. Process costing is used by companies making one-of-a kind products.
-------- 9. Operating costing is a hybrid costing system often used in repetitive manufacturing
where finished products have common as well as distinguishing characteristics.
-------- 10. Cost accounting procedures help management in gathering the data needed to
determine product costs and thus generate meaningful financial statements and other
reports.
MULTIPLE CHOICE
1. Financial statements for external users can be described as
a. User specific b. General purpose c. Special purpose d. Management reports
2. Planning is function that involves
a. hiring the right people for a particular job.
b. coordinating the accounting information system
c. setting goals and objectives for an entity
d. analyzing financial statements

3. which of the following is not a management function?

a. Constraining b. Planning c. Controlling d. Directing and Motivating

4. A manager that is establishing objectives is performing which management function?

a. Motivating b. Directing c. Planning d. Constraining
5. Management accounting information is generally prepared for
a. Stockholders b. Creditors c. Managers d. Regulatory agencies
6. Managerial accounting is applicable to
a. Service entities b. manufacturing entities c. Merchandising entities d. All of
these
7.which of the following is not an internal users?
a. creditor b. Department management
c. Cost accountant d. Controller
8. Managerial accounting is also called
a. management accounting b. Controlling
c. Analytical accounting d. Inside reporting
9. Management accountants would not
a. assist in budget planning b. Prepare reports primarily for external users
c. determine coist behavior d. Be concerned with the impact of cost
and volume
10.Internal reports must be communicated
a. daily b. Monthly c. Annually d. as needed
11. which of the following statements about internal reports is not true?
a. the content of internal reports may extend beyond the double entry accounting
system
b. Internal reports may show all amounts at market values
c. Internal reports may discuss prospective events
d. Most internal reports are summarized rather than detailed
12. Internal reports are generally
a. aggregated b. Detailed c. Regulated d. Unreliable
13. Management accounting information
a. pertains to the entity as a whole and is highly aggregated
b. pertains to subunits of the entity and may be very detailed
c. is prepared only once a year
d. is constrained by the requirements of FASB
14. Financial accounting information is used for reporting to
a. External parties b. Investors c. Creditors d. Managers
15. Which of the following statements about cost accounting is not true?
a. Is the intersection between financial and management accounting
b. Information generated by cost accounting is used by both financial and
managerial accounting.
c. Cost accounting provides product cost information to internal parties
such as managers for planning and controlling.
Problem 1
1. Metal used in manufacturing tables
2. Insurance on factory machines
3. Leather used in manufacturing furniture
4. Wages paid to machine operators
5. Depreciation of factory machinery
6. Salaries of factory supervisors
7. Wood used in manufacturing furniture
8. Sandpaper, bolts and nails
9. Property taxes on factory building
10. Rent of factory building
Problem 2 ( a. Direct Materials b. Direct labor c. Manufacturing Overhead)
1. Factory rent
2. Wages for workers paid based on units produced
3. Equipment maintenance
4. Cost accountant’s salary
5. Depreciation based on output
6. Salary of factory supervisor
7. Telephone ( monthly)
8. Paper in the manufacturer of books
9. Wages of machine operators
10. Commission of salesmen
Problem 3 ( M. Manufacturing S. Selling A. Administrative)
1. Metal for the manufacture of golf clubs
2. Wages of drivers of delivery trucks
3. Rent on Factory building
4. Freight in of materials purchased
5. President’s salary
Problem 4 ( a. [V] variable [F] fixed costs b. [I] Inventoriable costs [P] Period costs )
V or F I or P
a. Wood used in bookcases
b. Machine depreciation based in mach. Hrs.
c. Fire insurance on factory equip.
d. Wiring used in radios
e. Indirect materials
f. Sales commissions
g. Bottles used to package liquid
h. Gasoline for a delivery truck
i. Straight line dep. Of trucks used for delivery
Of sales to customers
j. Machine Operator’s hourly wages
Questions:
1. Define financial accounting
It provides information to stockholders, creditors and others who are
outside the organization.
2. Define management accounting
it provides information for managers of organization who direct and
control its operations.
3. How does management accounting serve both external users and internal
users?
they are prepared primarily for external users such as investors,
lenders, and creditors, and the government. The reports prepared in
managerial accounting are strictly for use by internal users.
4. What are the differences between financial accounting and managerial
accounting?
Financial Accounting must comply with various accounting standards
and the external person who make financial decisions while Managerial
accounting is more concern with operational reports which are only
distributed within a company standards and the managers who plan and
control an organization.
5. Why is managerial accounting more future oriented than financial
accounting?
Managerial Accounting is more future oriented since managerial
accounting information is associated with decision making it should be focused
on helping make sound decisions with the best information available at the
time.
6. Discuss the relationship between goals, planning and controls
Planning and controlling are interrelated to each other. Planning sets
the goals for the organization and controlling ensures their accomplishment.
Planning decides the control process and control provides sound basis for
planning .
7. Identify and define the three levels of planning
 Strategic Planning – concerned with selling long range goals and
objectives to determining overall direction of the company.
 Tactical Planning – concerned with plans for a shorter ( or a time period)
and emphasizes plans to achieve strategic goals.
 Operations Planning – relates to the day to day implementation of
tactical plans.
8. Differentiate job order costing from process costing
Job costing involves detailed accumulation of production costs
attribute to specific units or groups of units while Process costing involves the
accumulation of costs for length production runs involving products that are
in distinguishable from each other.
9. What are the main characteristics if job order costing
 Job order costing is that form of specific order costing which applies
where the work is undertaken as an identifiable
  Each job can be clearly distinguishable from other jobs
 All cost related to job are collected or job cost sheet or job card
 Job price is agreed with customer on the bases of cost estimation.
10. What are the main characteristics if process costing
 The production of goods is continuous except where the plant is shut
down for repairs until the final product.

 Each process is distinct and is pre-determined.

 Costs are accumulated by processes.
 The production is undertaken on a continuous and large scale basis in
anticipation of demand
11. What method must be used by a company manufacturing school bags

12. What method must be used by a company manufacturing aircrafts

13. What method must be used by a company manufacturing candies

14. What method must be used by a beer manufacturing company

15. What method must be used by a company tennis balls