Accounting & Auditing
Branches of Accounting
Absorption costing assigns to products:
A. Only tax costs
B. Both variable and fixed manufacturing costs
C. Only selling expenses
D. Only variable manufacturing cost
Correct Answer: B
Absorption costing includes all manufacturing costs in product cost.
Accounting & Auditing
Branches of Accounting
Marginal costing emphasizes:
A. Only tax deductions
B. Only fiduciary funds
C. Only historical asset cost
D. Variable costs and contribution
Correct Answer: D
Marginal costing focuses on variable costs and contribution margin for decisions.
Accounting & Auditing
Branches of Accounting
A favorable material price variance generally indicates that:
A. Tax expense increased
B. Actual quantity was necessarily zero
C. Actual material price was lower than standard price
D. Sales were lower than budget
Correct Answer: C
A favorable price variance arises when actual input price is below standard, assuming the usual sign convention.
Accounting & Auditing
Branches of Accounting
Standard costing compares:
A. Actual costs with predetermined standards
B. Assets with only cash balances
C. Employee ages with salaries
D. Tax returns with audit reports
Correct Answer: A
Standard costing identifies variances between actual and standard costs.
Accounting & Auditing
Branches of Accounting
Which branch commonly supports inventory valuation by determining product costs?
A. Social accounting
B. Cost accounting
C. Forensic accounting
D. Fiduciary accounting
Correct Answer: B
Cost accounting provides product cost information used in inventory valuation and internal decisions.
Accounting & Auditing
Branches of Accounting
Process costing is most suitable for:
A. Legal trust administration
B. Tax return preparation
C. Continuous production of homogeneous units
D. Unique custom jobs only
Correct Answer: C
Process costing averages costs across large volumes of similar units.
Accounting & Auditing
Branches of Accounting
A job cost sheet is most closely associated with:
A. Job order costing
B. Process costing
C. Tax accounting
D. Fiduciary accounting
Correct Answer: A
Job order costing accumulates costs by specific job or order.
Accounting & Auditing
Branches of Accounting
Manufacturing overhead generally includes:
A. Indirect production costs
B. Dividends
C. Corporate income tax only
D. Direct materials only
Correct Answer: A
Manufacturing overhead includes indirect materials, indirect labor, and other factory overhead.
Accounting & Auditing
Branches of Accounting
Which cost is directly traceable to units produced?
A. Dividend
B. Direct labor
C. General corporate legal cost in all cases
D. Income tax expense
Correct Answer: B
Direct labor can normally be traced to production units or jobs.
Accounting & Auditing
Branches of Accounting
Which of the following is a basic element of manufacturing cost?
A. Share premium
B. Income tax refund
C. Direct materials
D. Dividend paid
Correct Answer: C
Direct materials are a core manufacturing cost element.
Accounting & Auditing
Branches of Accounting
The main purpose of cost accounting is to:
A. Determine, analyze, and control costs
B. Issue audit opinions
C. Prepare only tax returns
D. Record only cash receipts
Correct Answer: A
Cost accounting measures and analyzes costs for products, services, jobs, and processes.
Accounting & Auditing
Branches of Accounting
The broader field that includes planning, control, performance evaluation, and internal decision support is:
A. Bookkeeping
B. Management accounting
C. Cost accounting only
D. Tax accounting only
Correct Answer: B
Cost accounting is important, but management accounting is broader and includes many decision-support functions.
Accounting & Auditing
Branches of Accounting
Which branch is most useful for pricing decisions based on costs, demand, and capacity?
A. Financial accounting only
B. Bookkeeping
C. Fiduciary accounting
D. Management accounting
Correct Answer: D
Pricing decisions are managerial decisions requiring relevant cost and market information.
Accounting & Auditing
Branches of Accounting
Which statement is true about management accounting?
A. It may include estimates, forecasts, and qualitative information
B. It is intended only for tax authorities
C. It must exclude estimates
D. It cannot use non-financial data
Correct Answer: A
Management accounting is designed for decisions and can use a wide range of information.
Accounting & Auditing
Branches of Accounting
Strategic planning information is most closely associated with:
A. Fiduciary accounting
B. Payroll recording only
C. Bookkeeping
D. Management accounting
Correct Answer: D
Management accounting supports strategic as well as operational decisions.
Accounting & Auditing
Branches of Accounting
Which branch is more flexible regarding report frequency and format?
A. Management accounting
B. Financial accounting
C. Statutory tax accounting
D. External auditing
Correct Answer: A
Management accounting reports can be produced as needed and tailored to users.
Accounting & Auditing
Branches of Accounting
A manager wants a daily sales dashboard by product. Which branch best meets this need?
A. Governmental accounting
B. Management accounting
C. Tax accounting
D. Financial accounting only
Correct Answer: B
Management accounting can produce frequent, customized internal reports.
Accounting & Auditing
Branches of Accounting
Which branch typically prepares forecasts of future revenues and costs?
A. Financial accounting only
B. Management accounting
C. Forensic accounting
D. Fiduciary accounting
Correct Answer: B
Forecasting is a core internal planning function.
Accounting & Auditing
Branches of Accounting
Relevant costing is mainly used in:
A. General-purpose external reporting only
B. Fiduciary statements only
C. Environmental disclosure only
D. Management accounting decisions
Correct Answer: D
Relevant costing identifies future costs and benefits that differ among alternatives.
Accounting & Auditing
Branches of Accounting
Which technique is commonly used in management accounting for decision-making?
A. Probate accounting only
B. Customs valuation only
C. Cost-volume-profit analysis
D. External audit confirmation only
Correct Answer: C
CVP analysis examines relationships among costs, volume, and profit.