WGU D196 PRINCIPLES OF FINANCIAL AND MANAGERIAL ACCOUNTING OBJECTIVE ASSESSMENT FINAL REVIEW: 300+ QUESTIONS WITH VERIFIED SOLUTIONS | COMPLETE TEST BANK FOR OA EXAM 2025/2026 | WESTERN GOVERNORS UNIVERSITY

Why might employees be interested in their company's financial accounting information?

Financial statement data are often used in determining employee bonuses.

Which group establishes financial accounting rules in the United States?

Financial Accounting Standards Board (FASB)

Which type of account are accounts payable and notes payable both examples of?

Liability

What is the purpose of the financial accounting cycle?

To turn information about transactions into financial statements

How is gross profit computed?

sales - cost of goods sold = gross profit

For purposes of cash flow classification in the statement of cash flows, which item is an operating activity?

Paying employees

How does a classified balance sheet provide useful information to a decision maker?

It distinguishes between current and long-term assets

What information does a balance sheet provide to a decision maker?

Summary of the financial position of a company at a particular date

What is the proper accounting for a product cost?

Record as an inventory cost until the item is sold

How could a period cost be reported in an income statement?

As an administrative expense

How are the wages of cashiers classified in a merchandising company?

Selling expense

Which statement correctly describes applied manufacturing overhead?

The amount of manufacturing overhead that is assigned to the goods produced

What is the label given to the quantity computed as estimated overhead costs divided by estimated level of activity?

Predetermined overhead rate

In a job order costing system, what is the proper accounting for a product cost?

It is reported as a part of cost of goods sold.

Which item is a period cost?

Utility bills to heat the headquarters building

Which statement is true with respect to activity-based costing (ABC) systems?

An ABC system allocates overhead based on multiple activities

How is overhead allocated in an ABC system?

Activity rate multiplied by number of cost driver events

In an ABC system, which name is given to a numerical measure reflecting the amount of a cost associated with a particular overhead cost activity?

Cost driver

How are production costs treated in a process costing system?

Costs are accumulated by process and averaged over all products made during the period.

How is the production cost per unit computed in a process costing system?

Amount of total production cost divided by the number of units completed during a particular period of time

For which production process is process costing the appropriate costing method to use?

Refining gasoline in a petroleum facility

Which type of company cannot use job order costing?

Petroleum refining plant