A company has beginning inventory for the year of $12,000. During the year, the company purchases inventory for $150,000

A company has beginning inventory for the year of $12,000. During the year, the company purchases inventory for $150,000 and ends the year with $20,000 of inventory. The company will report cost of goods sold equal to:

A) $150,000.

B) $158,000.

C) $142,000.

D) $170,000.

Answer: $142,000.

Beginning inventory is $30,000. Purchases of inventory during the year are $50,000. Cost of goods sold is $60,000. What is ending inventory?

A) $20,000.

B) $30,000.

C) $10,000.

D) $50,000.

Answer: $20,000.

The type of income statement that classifies items as operating and nonoperating is the ________ income statement.

A) Consolidated.

B) Multiple-step.

C) Classified.

D) Single-step.

Answer: Multiple-step.

The cost of the goods that a company sold during a period is shown in its financial statements as ________ and the cost of the goods that a company still has on hand at the end of the year is shown in the financial statements as ________.

A) Cost of goods sold; inventory

B) Goods on hand; inventory expense

C) Inventory; cost of goods sold

D) Sales revenue; cost of goods sold

Answer: Cost of goods sold; inventory

The largest expense on a retailer's income statement is typically:

A) Salaries.

B) Cost of goods sold.

C) Income tax expense.

D) Depreciation expense.

Answer: Cost of goods sold.

The balance of the Cost of Goods Sold account at the end of the year represents:

A) The cost of inventory not sold in the current year.

B) The total sales revenue to customers.

C) The cost of inventory sold in the current year.

D) Total purchases of inventory for the year.

Answer: The cost of inventory sold in the current year.

For a manufacturing company, the combination of the cost of raw materials, direct labor, and overhead for inventory

For a manufacturing company, the combination of the cost of raw materials, direct labor, and overhead for inventory that has not yet completed production is known as:

A) Work-in-process.

B) Finished goods.

C) Merchandise.

D) Retail goods.

Answer: Work-in-process.

A manufacturer's inventory consists of what type of inventory?

A) Raw materials.

B) Finished goods.

C) Work-in-process.

D) All of the other answers are included in a manufacturer's inventory.

Answer: All of the other answers are included in a manufacturer's inventory.

Cost of Goods Sold is:

A) An asset account.

B) A revenue account.

C) An expense account.

D) A permanent equity account.

Answer: An expense account.

The cost of unsold inventory at the end of the year is classified as a(n) ________ in the ________.

A) Asset; Balance sheet

B) Expense; Income statement

C) Liability; Balance sheet

D) Revenue; Income statement

Answer: Asset; Balance sheet

Inventory does not include:

A) Materials used in the production of goods to be sold.

B) Assets intended to be sold in the normal course of business.

C) Equipment used in the manufacturing of assets for sale.

D) Assets currently in production for normal sales.

Answer: Equipment used in the manufacturing of assets for sale.

What type of company purchases raw materials and makes goods to sell?

A) Wholesaler.

B) Retailer.

C) Merchandiser.

D) Manufacturer.

Answer: Manufacturer.

One of the major differences between service companies and retail or manufacturing companies is that retailers and manufacturers

One of the major differences between service companies and retail or manufacturing companies is that retailers and manufacturers must account for:

A) Current assets.

B) Inventory.

C) Selling expenses.

D) Deferred revenue.

Answer: Inventory.

Companies that purchase inventories that are primarily in finished form for resale to customers are known as:

A) Delivering companies.

B) Service companies.

C) Merchandising companies.

D) Manufacturing companies.

Answer: Merchandising companies.

Firms that want to grow quickly in the global marketplace often employ the cost leadership strategy because

A) this produces favorable customs rates and import duties.

B) manufacturers around the world adopt lean manufacturing methods to bring their costs down.

C) this allows them to employ and benefit from enterprise management systems.

D) there are relatively few product variations across different countries.


Answer: B) manufacturers around the world adopt lean manufacturing methods to bring their costs down.

Cost management has evolved from a focus on measurement to one of identifying those measures that are critical to the organization's success

Cost management has evolved from a focus on measurement to one of identifying those measures that are critical to the organization's success. Given this new focus, indicate which one of the following types of cost management systems cost managers are likely to be striving for.

A) Basic transaction reporting systems

B) A system that focuses on reliable financial reports

C) A system that tracks key operating data and develops accurate cost information

D) A system in which strategically relevant cost management information is an integral part


Answer: D) A system in which strategically relevant cost management information is an integral part\

The IMA ethical standard that requires the management accountant to act with integrity

A) requires the management accountant to mitigate actual conflicts of interest.

B) is not a part of the IMA Statement of Ethical Professional Practice.

C) is necessary to ensure that the management accountant's credibility is not impaired.

D) is necessary to ensure that the management accountant does not violate confidentiality.


Answer: A) requires the management accountant to mitigate actual conflicts of interest.

The strategy map can be compared to the balanced scorecard (BSC) in that

A) the strategy map is a subset of the BSC.

B) the strategy map deals with the strategy component of the BSC.

C) the strategy map provides a guide to implementing the BSC by linking the critical success factors.

D) the strategy map and the BSC are unrelated.


Answer: C) the strategy map provides a guide to implementing the BSC by linking the critical success factors.

Professional certifications are issued by the American Institute of Certified Public Accountants (AICPA), the Institute of Management Accountants (IMA), the Chartered Institute of Management Accountants (CIMA),

Professional certifications are issued by the American Institute of Certified Public Accountants (AICPA), the Institute of Management Accountants (IMA), the Chartered Institute of Management Accountants (CIMA), and the Chartered Professional Accountants of Canada (CPA-Canada), among other professional accounting organizations. The Certificate in Management Accounting (CMA) is issued by the

A) CIMA.

B) IMA.

C) CPA-Canada.

D) AICPA.


Answer: B) IMA

To determine whether a particular action is professionally ethical or not, using the Institute of Management Accountants Statement of Ethical Professional Practice, it is necessary to know:

A) whether the act is legal in your jurisdiction.

B) the intent and the business context of the act.

C) the amount of the fraud or theft that is involved.

D) whether the management accountant is certified.


Answer: B) the intent and the business context of the act.

A management method in which managers and employees commit to a process of continuous improvement is best described as

A) total quality management.

B) business process improvement.

C)lean accounting.

D) the theory of constraints.


Answer: B) business process improvement