ACCOUNTING 256
FIRST MIDTERM
Review Problems

Multiple Choice—Choose the best answer.

Managerial accounting is concerned with:
The company as a whole, rather than with the segments of a company.
The data needs of stockholders and creditors.
The relevance and flexibility of data rather than precision.
Meeting the requirements of generally accepted accounting principles.
Recording the financial history of the organization.

The basic difference between managerial and financial accounting is that:
Financial accounting is concerned with providing financial information to stockholders, whereas managerial accounting is concerned with providing information to managers for their use in planning, controlling and decision making.
Managerial accounting emphasizes relevant historical information about the whole firm, whereas financial accounting does not.
Managerial accounting must follow generally accepted accounting principles, whereas financial accounting does not.
Managerial accounting records the financial history of the organization, whereas financial accounting does not.

Which of the following is a true statement regarding product and/ or period costs?
Period costs never appear on the balance sheet.
Product costs appear on the income statement but never on the balance sheet.
Neither product nor period costs ever appear on the balance sheet.
Neither product nor period costs ever appear on the income statement.

Manufacturing overhead consists of:
All manufacturing costs.
Indirect materials, but not indirect labor.
All manufacturing costs, except direct materials and direct labor.
Indirect labor, but not indirect materials.

Which of the following costs would not be included as part of manufacturing overhead?
Insurance on sales vehicles.
Depreciation of production equipment.
C. Lubricants for production equipment.
D. Utility