Accounting: Supply Chain Management Terms and Ans

Topics: Supply chain management terms, Cost accounting, Cost Pages: 9 (1345 words) Published: July 10, 2013
Chapter 2
Job Order Costing

TRUE/FALSE

1.Cost accounting systems are used to supply cost data information on costs incurred by a manufacturing process or department.

ANS:T

2.A manufacturer may employ a job order cost system for some of its products and a process cost system for others.

ANS:T

3.A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

ANS:T

4.A process cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

ANS:F

5.A process cost accounting system accumulates costs for each of the departments or processes within the factory.

ANS:T

6.A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process.

ANS:T

7.The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications.

ANS:F

8.A job order cost system would be appropriate for a crude oil refining business.

ANS:F

9.A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

ANS:T

10.The job order costing system is not used by service organizations.

ANS:F

11.The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

ANS:T

12.Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in cost accounting systems.

ANS:T

13.When the goods are sold, their costs are transferred from Work in Process to Finished Goods.

ANS:F

14.The materials requisition serves as the source document for debiting the accounts in the materials ledger.

ANS:F

15.Materials are transferred from the storeroom to the factory in response to materials requisitions.

ANS:T

16.The document that serves as the basis for recording direct labor on a job cost sheet is the time card.

ANS:F

17.The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

ANS:T
18.Depreciation expense on factory equipment is part of factory overhead cost.

ANS:T

19.Factory overhead is applied to production using a predetermined overhead rate.

ANS:T

20.If factory overhead applied exceeds the actual costs, the factory overhead account will have a credit balance.

ANS:T
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MULTIPLE CHOICE

1.Which of the following are the two main types of cost accounting systems for manufacturing operations? a.| Process cost and general accounting systems|
b.| Job order cost and process cost systems|
c.| Job order and general accounting systems|
d.| Process cost and replacement cost systems|

ANS:B

2.Which of the following would most likely use a job order costing system? a.| A paper mill|
b.| A swimming pool installer|
c.| A company that manufactures chlorine for swimming pools| d.| An oil refinery|

ANS:B

3.Which of the following would be most likely to use process costing? a.| A custom furniture manufacturer.|
b.| An auto body repair shop.|
c.| A law firm|
d.| A lawn...
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