Answered: 1. The materials requisition:…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. The materials requisition:

a.informs the purchasing agent of the quantity and type of materials needed.

b. contracts for quantities to be delivered.

c. authorizes the storeroom to deliver types and quantities of materials to a given department.

d. is the list of materials requirements for each step in the production cycle.

2. The purchase order:

a. contracts for quantities to be delivered.

b. authorizes the storeroom to deliver materials to a given department.

c. is the list of materials requirements for each step in the production cycle.

d. informs the purchasing agent of the quantity and kind of materials needed.

3. The receiving report:

a.certifies quantities received and reports results of inspection and testing.

b. is the list of materials needed for each step in the production cycle.

c. contracts for quantities to be delivered.

d. informs the purchasing agent of the quantity and kind of materials needed.

4. The receiving department does all of the following except:

a. Matches materials received with descriptions on purchase orders.

b. Unloads and unpacks incoming materials.

c. Arranges for inspection, when necessary.

d. Keeps informed concerning sources of supply, prices and delivery schedules.

5. Entries made in Materials account in the general ledger are the following, except:

a. Materials returned.

b. Materials issued.

c. Materials purchased.

d. Materials reserved and on order.

6. What is the major advantage of using a perpetual inventory system?

a. It minimizes error in posting receipts and issues of materials.

b. It avoids inventory shortages and overages.

c. It provides efficient internal control over materials.

d. It avoids losses due to theft.

7. Scrap materials consists of:

a. Raw materials remaining from the production cycle but usable for purposes other than the original purpose.

b. Defective units that may be used or sold.

c. Finished goods that do not meet quality control standards and cannot be reworked.

d. Raw materials remaining from the production cycle but not usable for any purpose.

8. The sale of scrap from a manufacturing process is recorded as a(n):

a. Increased in finished goods control

b. Decrease in manufacturing overhead control.

c. Decrease in finished goods control

d. Increase in manufacturing overhead control

9. In a job-order costing system, the net cost of spoilage that is common to all jobs should be charged to:

a. Applied manufacturing overhead

b. Work in process

c. Manufacturing overhead

d. Materials

10. If the 300 defective bolts(normal spoilage) were repaired and management wanted to be sure the incremental costs did not exceed the cost of producing new units, how would the rework costs be accounted for:

a. As normal materials, labor and overhead.

b. Charged to overhead and spread over the costs of all products.

c. Charged to those belts repaired.

d. Expensed as extraordinary.

11. To check the accuracy of hours worked, one would ordinarily compare time cards with:

a. employee earning records

b. payroll journal

c. job time tickets

d. personnel records

12. The document that is used to secure information as to the type of work performed is the:

a. clock card

b. labor voucher

c. time ticket

d. requisition report

13. An example of fringe benefit is:

a. the direct labor wage rate.

b. the employee health insurance.

c. withheld taxes.

d. overtime pay.

14. An example of labor-related costs is:

a. fringe benefits

b. factory labor

c. bonus pay

d. operating expense

15. Wages in excess of the regular rate paid for work after normal closing time is:

a. Vacation and holiday pay

b. Pension pay

c. Overtime premium

d. Regular wage

16. If the job is taken as a rush order with the knowledge that overtime will be necessary, the overtime premium should be charged to:

a. General expense

b. Factory overhead

c. Specific job

d. Selling expense

17. If the overtime premium is charge to specific job, it should be debited to:

a. Work in process account

b. General expense account

c. Manufacturing overhead account

d. Selling expense account

18. What is the certificate that is given to employee at the end of the year to aid him in the filing of his annual income tax return?

a. Certificate of income tax withheld

b. Certificate of employment.

c. Certificate of compensation payment - tax withheld.

d. Certificate of salaries paid.

19. In a job-order costing system, the cost incurred to rework unit that are common to all jobs should be debited to:

a. Work in Process

b. Manufacturing Overhead

c.Materials

d. Manufacturing Overhead Applied

20. In a job-order costing system, the recovery value of scrap that is significant in economic value, abnormal and due to the nature of particular jobs should be credited to:

a. Work in Process

b. Manufacturing Overhead

c.Loss from Abnormal Spoilage

d.Materials

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