Chapter 02_5e

Chapter 2—Basic Managerial Accounting Concepts

TRUE/FALSE

1. It is beneficial to assign indirect costs to cost objects.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: AICPA: FN-Measurement | IMA: Business Economics | ACBSP: APC-27-Managerial Accounting Features/Costs KEY: Bloom's: Knowledge
NOT: 1 min.

2. Price must be greater than cost in order for the firm to generate revenue.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: AICPA: BB-Industry | IMA: Business Economics | ACBSP: APC-09-Financial Statements
KEY: Bloom's: Knowledge NOT: 1 min.

3. Accumulating costs is the way that costs are measured and recorded.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: AICPA: FN-Measurement | IMA: Business Economics | ACBSP: APC-27-Managerial Accounting Features/Costs KEY: Bloom's: Knowledge
NOT: 1 min.

4. Assigning costs involves the way that a cost is linked to some cost object.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: AICPA: FN-Measurement | IMA: Business Economics | ACBSP: APC-27-Managerial Accounting Features/Costs KEY: Bloom's: Knowledge
NOT: 1 min.

5. Assigning costs tells the accountant who spent the money.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: AICPA: BB-Industry | IMA: Business Economics | ACBSP: APC-27-Managerial Accounting Features/Costs KEY: Bloom's: Knowledge NOT: 1 min.

6. A cost object is any item such as products, customers, departments, regions, and so on, for which costs are measured and assigned.

ANS: T PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic
STA: AICPA: FN-Measurement | IMA: Business Economics | ACBSP: APC-27-Managerial Accounting Features/Costs KEY: Bloom's: Knowledge
NOT: 1 min.

7. Costs are directly, not indirectly, associated with cost objects.

ANS: F PTS: 1 DIF: Difficulty: Easy
OBJ: LO: 2-1 NAT: BUSPROG: Analytic