Answer the following statements true (T) or false (F)
1. Absorption costing considers fixed selling and administrative costs as product costs.
2. Absorption costing is required by the Generally Accepted Accounting Principles (GAAP) for financial
statements issued to investors, creditors, and other external users.
3. Fixed manufacturing overhead is considered a product cost under variable costing.
4. Absorption costing considers direct materials, direct labor, variable manufacturing overhead, and fixed
manufacturing overhead as product costs.
5. In absorption costing, all product costs are recorded first as assets in the inventory accounts.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
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Accrual-basis net income is most useful for
a. determining the amount of income tax a company should pay. b. predicting the short-term performance of an enterprise. c. predicting the long-term performance of an enterprise. d. determining the amount of dividends a company should pay.
Joe liked his group members but he lacked confidence in his team to finish the project. This is an example of ______.
A. low valence B. low instrumentality C. low expectancy D. all of these
Which of the following types of companies would probably not use job order costing?
A) Car repair shop B) Interior decorator C) Soft drink manufacturer D) Custom cabinet maker
If a court orders rescission and restitution of a contract under which Nala sold a baseball card to Shirley in exchange for $450:
a. Shirley must return the baseball card. b. Nala must return the $450. c. Both a and b. d. Neither a nor b.