AE102- FINAL EXAMS

1. Which of the following is an appropriate market approach for determining fair value measurements?
using relevant information from recent transaction

2. Which of the following is an example of the expense recognition principle of associating cause and effect?
sales commisions

3. According to the conceptual framework which of the following is an essential characteristic of an asset?
An asset provides future benefits

4. The premium on a three-year insurance policy expiring on December 31, year 3, was pain in total on January 1, yea
The same as it would have been if the original payment had been debited initially to an expense
account

5. Which of the following is an accepted valuation technique for fair value estimates?
Cost approach

6. The market approach valuation technique for measuring fair value requires which of the following?
Prices and other relevant information of transactions from identical or comparable assets.

7. Which of the following is an appropriate cost approach for determining fair value measurements?
Using the current replacement cost of the asset

8. The fair value of an asset should be based upon

the price that would be received to sell the asset at the measurement date under current market conditions

9. Which of the following statements is true regarding developing fair value measurements for financial statement pu
It assumese highest and best

10. According to the conceptual framework, the objectives of financial reporting for business enterprise are based on
The needs of the users of the information

The fair value option election applies to all of the following items except for
Pensions

12. According to the conceptual framework for financial reporting to be useful, it must
Provide information useful for making business and investment decisions

13. What is the concept that supports the issuance of interim reports?
Relevance

14. General purpose external financial reporting of a corporation focuses primarily on the needs of which of the follow
Investors and creditors and their advisors.

15. According to the conceptual framework, certain assets are reported in financial statements at the amount of cash
Replacement Cost

16. Jazz corporation prepares its financial statements in accordance with IFRS. Jazz must report finance costs on the s
either in operating activities or financing activities

17. Which of the following may not be disclosed on the income statement for a company
Gain or loss from extraordinary items
18. What is the underlying concept that supports estimating a fixed asset impairment charge?
faithful representation

19. Materiality and relevance are both defined by

What influences or makes a difference to a decision maker.

20. In calculating present value in a situation with a range of possible outcomes all discounted using the same intere
The sum of probability-weighted present values

21. Which of the following is an assumption used in fair value measurements?

The asset is in its highest and best use.

22. According to the conceptual framework, earnings

exclude certain gains and losses that are included in comprehensive income.

23. For IFRS pusposes, cash advances

Operating activities.

24. Which of the following characteristics means that information is reasonably free from error and bias?
Faithful representation

25. Which of the following items does not require fair value measurement for reporting on the balance sheet?
Treasury stock

26. The fundamental qualitative characteristic of faithful representation has the components of?
Completeness, neutrality, and freedom from error.

27. Which of the following is true about financial statement requirements under IFRS?
Prior year comparative financial statements are required

28. According to the conceptual framework, which of the following is an enhancing quality that relates to both releva
comparability

29. A method of estimating uncollectible accounts that emphasizes asset valuation rather than income measurement
Aging the receivables

30. Which of the following is not true about accounting for inventory under IFRS?
Inventories are always valued at net realizable value.

31. Reporting inventory at the lower of cost or market is a departure from the accounting principle of?
Historical cost.

32. When allocating costs to inventory produces for the period, fixed overhead should be based upon?
normal capacity of the production facilities .

33. How should the effect of a change in accounting estimate be accounted for?
In the period

34. What is the conceptual framework intended to establish?

The objectives and concepts for use in developing standards of financial accounting and reporting is co

35. Jazz company reports under IFRS. At December 31,2021, Jazz classified a note payable as a current liability. Unde
If Jass has executed an agreement to refinance the note before the statment of financial position date
If Smith has executed an agreement to refinance the note as long-term, before the
statement of financial position date.

36. When manufacturing inventory, what is the accounting treatment for abnormal freigh-in costs?
Charge to expense

37. On which of the following dates is a public entity required to measure the cost od employee services in exchange
Date of grant

38. Which of the following is a level three input to valuation techniques used to measure the fair value of an asset?
Unobservable

39. Under the reporting requirements for impaired assets, impairment losses for assets to be held and used shall be r
As a component of income from continuing operations.

40. The effect of a change in accounting principle that is inseparable from the effect of a change in accounting estimat
As a component of income from continuing operations.

41. Which of the following describes an accounting mismatch as that expression is used in IFRS?
Related

42. Which of the following is not a reason to prepare prospective financial information?
To meet the requirements of GAAP.

43. What is the underlying concept that supports estimating a fixed asset impairment charge?
Faithful represention

44. Under current generally accepted accounting principles, which approach is used to determine income tax expens
Asset and liability approach

45. Which on of the following expenses would be remeasured using a historic exchange rate?
Depreciation expense

46. Under IFRS, issued convertible bonds are

Separated into debt and equity

47. Under IFRS, if a long-term debt becomes callable due to the violation of a loan covenant
the debt must be reclassified as current.

48. Theoretically, the proceed from the sale of a bond will be equal to
the present value

49. Which one of the following is a true statement for a firm electing the fair value option for valuing its bonds payabl
The fair value of the bond and the principal obligation value must be disclosed.

50. Conceptualy, interim financial statements can be described as emphasizing

TIMELINESS over reliability.

51. If a company uses the modified cash basis of accounting, the modifications from the pure cash basis should have s
The modifications must be the same as GAAP and not illogical

52. Under IFRS, a provision is

an event which is probable and measurable

53. Land was purchased to be used as the site for the construction of a plant. A building on the property was sold and
deducted from the cost of the land.

54. When financial statements are being prepared, which of the following items requires that accountants estimate th
mineral

55. There is a material amount due from a customer who declared bankruptcy. This receivavle should be classified on

56. An airline should recognize revenue from an airline ticket in the period in which the
Related flights takes place

57. Which of the following is not an appropriate basis for measurement the historical cost of fixed assets?
Proceeds

58. The amortization of intangible assets over their useful lives is justified by the

Letter a
al on January 1, year 1. The original payment was initially debited to a prepaid asset account. The appropriate journal entry has b

ancial statement purposes

rprise are based on

f which of the following users?

he amount of cash or its equivalent that would have to b e paid if the same or equivalent assets were acquired currently. What is

nance costs on the statement of cash flows?

glenda HAHAHAHAHA
ng the same interest rate, the expected present value would be?

ance sheet?

ates to both relevance and faithful representation?

ome measurement is the allowance method based on?

nd reporting is correct.

rent liability. Under what conditions could Jazz reclassify the note payable from current to noncurrent?
rvices in exchange for an award of equity interests, based on the fair market value of the award?

alue of an asset?

and used shall be reported?

accounting estimate should be reported?

Related assets and liabilities are valued using different measures.

To meet the requirements of GAAP.

income tax expense?

ng its bonds payable?

basis should have substantial support. In this context substantial support requires
perty was sold and removed by the buyer so that construction on the plant could begin. The procees from the sale of the building

untants estimate the effects of future conditions and events?

uld be classified on the

appropriate journal entry has been recorded on December 31, year 1. The balance in the prepaid asset account on December 31,

re acquired currently. What is the name of the reporting concept?

es from the sale of the building should be?
sset account on December 31, year 1 should be?
ar 1 should be?
AE103-FINAL EXAMS

1. In preparing a quality cost report, the cost of employee's time spent in quality circles is part of:
prevention costs

2. Which of the following is least likely to be an objective of a cost accounting system?

Sales commission determination

3. In a job-costing system, issuing indirect materials to production increases which account?

Manufacturing overhead control

4. When spoilage occurs because of some action taken by the customer, the unrecoverable cost of the spoila
factory overhead control

5. When compared with normal spoilage abnormal spoilage

Is generally thought to be more controllable by production management than normal spoilage.

6. The idle time cost of assembly line workers in a manufacturing company is usually included as a part of:
manufactuing overhead cost

7. ABC sells a number if goods whose selling price heavily influenced by cost. A recent study of product no.
The company may have been extremely competitive in the marketplace from a price perspective

8. In a broad sense, cost accounting, can best be defined within the accounting system as
Internal reporting for use in management planning and control and external reporting to the extent its pr

9. When rework occurs because of some internal failure, the cost of the rework should be charged to
Factory Overhead Control

10. Traditional overhead allocation result in which of the following situations?

Overhead costs are assigned too little overhead

11. A job order cost system uses a predetermined fixed factory overhead rate based on normal activity and
Less than normal Greater than expected

12. In developing a predetermined variable factory overhead application rate for use in a process costing sy
 Numerator: Estimated factory overhead; Denominator: Estimated machine hours

13. The use of unit-based activity drivers to assign costs tend to

overcost high-volume products

14. Which of the following best describes direct labor?

both a product cost and a prime cost

15. The primary focus of cost management is to

 help managers make different decisions.

16. In an activity-based costing system, what should be used to assign a department's manufacturing overh
multiple cause-and-effect relationships

17. In cost terminology, conversion costs consists of

direct labor and factory overhead

18. Which of the following terms could be used to be correctly describe the wages paid to the machine oper

direct labor cost

19. Conventional product costing uses which of the following procedures?

Overhead costs are traced to departments, then costs are traced to products (UNIT BASED)

20. A direct labor overtime premium should be charged to a specific job when the overtime is caused by the
Customer’s requirement for early completion of job.

21. Inventoriable costs

include only the prime costs of manufacturing a product. (DI KO SURE)

22. At the end of the last fiscal year, ABC

credit it to cost of good sold

23. The overhead rates of the traditional approach to product costing use
unit-based cost drivers

24. Scrap includes all of the following except

partially or fully completed units that are in some way defective

25. Which of the following is true about acitivity-based costing?

It can be used with either process or job costing.

26. All of the following accounts would be acceptable ones to credit at the time scrap is sold except
all of the above would be acceptable

27. Which of the following is not typical traditional costing system?

. Use of multiple cost drivers to allocate overhead.

28. The amount of raw materials left over from a production process or production cycle for which there in
waste
29. ABC Co.'s cost allocation and product
Raw materials storage activity.

30. Product costs can be distorted if a unit based cost driver is used and
I and II

31. ABC, Inc. manufactures car radios

work in process inventory

32. Which of the following would be reasonable basis for allocating the material handling costs to the units
Number of components per completed unit.

33. Internal failure costs include all of the following except:

the cost of warranty repairs and replacements

34. The terms direct cost and indirect cost are commonly used in accounting. A particular cost might be con
The cost object to which the cost is being related.

35. An assembly plant accumulates its variable and fixed manufacturing overhead costs in a single cost poo
The variable cost per unit and the total fixed costs remain constant.

36. ABC manufactures two versions of a produt. Production and cost information show the following: Mode
143 (PERO WALA SA CHOICES MERON NA SA CHOICES YUNG IBA, ANG MERON LANG IS 10)

37. ABC Company has two service departments and three production departments, each producing a separ

38. ABC Inc. has completed the Job 101 containing 1,100 shoes, during the year at the following unit costs:

39. ABC Company produces three produces three products with the following production and cost informa
22

40. The cost of good manufactured for ABC for the year 2000 was 860,000

41. A, a production manager, has a monthly gross pay of 67,146

43. during the last week in october

50 should be charged to manufacturing overhead

44. During last January, ABC manufacturing wich maintains a perpetual inventory system, recorded the foll
45. ABC, an accounting firm, provides consulting and tax planning services . A recent analysis found that 65
Assuming the use of ac
tivity
-
based costing, the proper percentage to use in allocating staff support
costs to tax planning services is:
75%

46. On Decemeber 31, 2019, the materials account of ABC Mfg. has a balance of 592,738

47. ABC Company produces three products with the following production and cost information.. Model A
$82.00

48. ABC
20%-30%-50%

49. Using the following data for a recent period, calculate the beginning finished goods inventory Sales 40,0
12,000

50. An employee working night shift due to overtime falling in a special holiday who is paid 100 per hour sh

51. ABC Com. Provided the inventory balances and manufacturing cost date for the month of January. Unde

80. The normal spoilage rate for a company is 5% of normal input. A current job consisted of 31,000 total u
1,000

79. ABC Company has two service departments and three production… using the step method of cost alloca

77. If the beginning monthly balance of raw materials inventory was 37,000 the ending balane was 39,500
260,300

76. In august direct labor was 40% of conversion cost. If the manufacturing overhead cost for the month wa
22,667

75. For the calendar year ended, ABC Ince. Incurred the following costs on Job Order 201 for manufacturing

74. ABC Manufacturing company has two production departments (fabrication and assembly

72. Inspection costs totaled $100,000. Using ABC, inspections costs allocated to each unit of Model Y would
10
71. a installs mufflers at ABC Motorcycle Company. A is paid P14 per hour and an extra P7 per hour o

70. ABC inc. is exploring ways to allocate the cost of service departments such as quality control and mainte

the following costs were incurred in July: Direct materials 35,00

y circles is part of: 1

hich account? 4

ecoverable cost of the spoilage should be charged t 5

rmal spoilage. 7

sually included as a part of: 8

9
recent study of product no. 519
10

11
eporting to the extent its product costing function satisfies
12
should be charged to
13

14

15
ased on normal activity and expected fixed cost. At the end o
16

or use in a process costing system, which of the f 17

18

19

20

21
 22

ment's manufacturing overhead cost to products pr 23

24

25

es paid to the machine operator who operates th 26

27

(UNIT BASED) 28

he overtime is caused by the: 29

30

31

32

33

34

35

36

37
scrap is sold except
38

39

40
tion cycle for which there in no further use is
41
 42

43

44

45

46
l handling costs to the units produced in an activity-base costing system?

59

60

particular cost might be considered as a direct cost of a manufacturing department

80
ad costs in a single cost pool which are then applied to work

n show the following: Model A would be

N LANG IS 10)

nts, each producing a separate product

at the following unit costs:

roduction and cost information: What would be the per unit overhead cost for Model B of activity based costing were

ry system, recorded the following information pertaining to its raw materials inventory
ecent analysis found that 65%

ost information.. Model A

d goods inventory Sales 40,000

who is paid 100 per hour shall receive an hourly compensation of

the month of January. Under ABCs cost system. 30,000

b consisted of 31,000 total units

he step method of cost allocation, what amount of engineering cost would be allocated directly to Department A

ending balane was 39,500

rhead cost for the month was 34,000 and the direct materials cost was 23,000 the direct labor cost was

Order 201 for manufacturing of 500 units

and assembly

d to each unit of Model Y would be

and an extra P7 per hour over 40 that is worked in a given week

s quality control and maintenance to the production depratments such as machining ang assemply. If the total amoun
abc, inc. manufactures car radios. The direct material cost assigned to car radios that cesco.
work in process inventory
the amount of raw materials left over from a production process or production cycle for which there is no f
waste
The terms direct cost and indirect cost are commonly used in accounting.
the cost object to which the cost is being related
in an activity- based costing system, what should be used toa ssigne a departments manufacturing overhea
multiple cause-and-effect relationships

ABC Co.'s cost allocation and product costing procedures follow activity-based costing prin
Raw materials storage activity.
conventional product costing uses which of the following procedures?
Overhead costs are traced to departments, then costs are traced to products.
in developing a pre determined variable factory overhead application rate for use in a proc
Estimated factory overhead; Estimated machine hours
when spoilage occurs because of some action taken by the customer, the unrecoverable co
factory overhead control
the primary focus of cost managment is to
help managers make different decisions.
scrap includes all of the following except
partially or fully completed units that are in some way defective
In a job-costing system, issuing indirect materials to production increases which account?
Manufacturing overhead control.
a direct labor overtime premium should be charged to a specific job when the overtime is
customer's requirements for early completion of the job
which of the following would be a reasonable basis for allocating the material handling cos
Number of components per completed unit.
in cost terminology, conversion costs consists of
Direct labor and factory overhead.
which of the following is not typical of traditional costing systems?
Use of multiple cost drivers to allocate overhead.
internal failure costs include all of the following except:
the cost of warrant repairs and replacements not sure
the idle time costs of assembly line workers in a manufacturing company is usually included as a part of:
manufacturing overhead cost.
which of the following is true about activity-based costing
It can be used with either process or job costing.
product costs can be distorted if a unit-based cost driver is used and
I and II
which of the following is least likely to be an objective of a cost accounting system?
Sales commission determination.
all of the following accounts would be acceptable ones to credit at the time scrap is sold except;
all of the above would be acceptable
at the end of the last fiscal year, abc company had the the following account balances:
credit it to cost of good sold
in preparing a quality cost report, the cost of employees time spent in quality circles is part of
prevention costs
which of the following terms could be used to correctly describe the wages paid to the machine operator w
direct labor cost
traditional overhead allocations resulrt in which of the following situations?
High-volume products are assigned too much overhead, and low-volume products are assigned too little ov
when compared with normal spoilage abnormal spoilage
Is generally thought to be more controllable by production
management than normal spoilage.
A job order cost system uses a predetermined fixed factory overhead
rate based on normal activity and expected fixed cost. At the end of the
year, underapplied fixed overhead might be explained by which of the
following situations?
Actual volume . . plant
An assembly . Actualaccumulates
fixed costs its variable and fixed
Less than normal Greater than expected
manufacturing overhead costs in a single cost pool which
which
are thenof the following
applied tobest
work descrives directusing
in process labor? a single
Both a productbase.
application cost and
Thea prime cost. plant management wants
assembly
when rework occurs
to estimate because of some
the magnitude of theinternal failure, the cost of the rework should be charged to:
total manufacturing
factory
overhead overhead
costscontrol
for different volume levels of the
the use of unit-based
application activityactivity
base drivers
using a to flexible
assign costs tendsformula.
budget to If
overcost
there high-volume
is an increase products
in the application activity base that is
The
abc company
sells a may have
number of been
foods extremely
whose sellingcompetitive
price is in the
heavily influenced by cost.
within the relevant
marketplace from a pricerange of activity for the assembly plant,
which one of the following relationships regarding variable
perspective.
and fixed costs is correct?
The variable cost per unit and the total fixed costs remain constant.
inventoriable costs
Are regarded as assets before the products are sold.
the overhead rates of the traditional approcah to product costing use
unit-based cost drivers
In a broad sense, cost accounting, can best be defined within the accounting system as
Internal reporting for use in management planning and control and external reporting to the extent its pr

abc inc. produces three producsts

20%-30%-50%
abc. inc is exploring ways to allocate the cost of service depertments

a, a production manager, has a monthly gross pay of 67146

the following costs were incurred in july:

48,000
abc uses 150,000L... reorder point

during the last week in october. employee a worked a total of 45 hours and had no idle time. employee a wo
50 should be charged to manufacturing overhead
 abc manufacturing produces three products.
20
abc manufacture two versions of a product.
200
a company uses a job-order cost system in accounting for its manufacturing operations
4,140
abc inc. is exploring ways to allocate the cost of service department sush as quality control and maintenanc

abc uses 150,000L of syrup per month. economic order

y-base costing system?

abc manufacturing produces three products.

8.33
for the calendar year ended, abc inc
2,000
st of a manufacturing department

an operator
768

he per unit overhead cost for Model B of activity based costing were used?

rtaining to its raw materials inventory

compensation of

engineering cost would be allocated directly to Department A

ct materials cost was 23,000 the direct labor cost was

d in a given week

on depratments such as machining ang assemply. If the total amount allocated to machining is 372,000 under the step
that cesco.

ycle for which there is no furhter use is

ts manufacturing overhead costs to products produced in

vity-based costing principles.

products.
n rate for use in a process costing system, which of the following could be used in the numeratios a

r, the unrecoverable cost of the spoilage should be charged to

eases which account?

when the overtime is caused by the;

material handling costs to the units produced in an activity-based costing system

ly included as a part of:

is sold except;
cles is part of

o the machine operator who operates the stamping machine

s are assigned too little overhead

uld be charged to:

porting to the extent its product costing function satisfies external reporting requirements

o idle time. employee a worked a total of 45 hours

ty control and maintenance to the
g is 372,000 under the step-down method of allocating service department costs from quality control to maintenance,
sed in the numeratios and denominator
lity control to maintenance, what amount of service department cost is allocated to assembly
The primary focus of cost management is to
Help managers make different decisions

ABC Co.'s cost allocation and product costing procedures follow activity-based costing principles.....
Raw materials storage activity

A direct labor overtime premium should be charged to a specific jo when the overtime is caused by the:
customer's requirement for early competion of the job

All of the following accounts would be acceptable ones to credit at the time scrap is sold except
all of the choices would be acceptable

Product costs can be istorted if a unit-based driver is used and....

I and II

Which of the following is not typical of traditional costing system

Assumption of correlation between direct labor

The terms direct cost and indirect cost are commonly used in accounting....
The cost object to which the cost is being related

In preparing a quality cost report, the cost of employee's time spent on qulity circles is part of
prevention cost

In a broad sense, cost accounting can best be define within the accounting system
Internal reporting (ung mahaba)

In cost terminology, convesion costs consist of

Direct labor and factory overhead

In developing a predetermined variable factory overhead application rate is use in a proces...

Estimated variable factory overhead Estimated machine hours

The overhead rates of the traditional approach to product costing

unit-based cost drives

The use of unit-based ctivity drivers to assign tends to

overcost high-volume product

Which of the following terms could be used to correctly scribe the wages pid to the machine operator who o
direct labor cost

Internal failure costs include all of the following except:

the cost of warranty repairs and replacements
Traditional overhead allocations result in which of the following situations
High-volume product

Inventoriable costs
Are regarded as asstes before the product sold

At the end of the fiscal year, ABC Company had the following account balance
Credit to cost of goods sold

Scrap includes all of the following except

partially or fully

Which of the following is not typical of traditional costing system

Use of multiple cost drivers

A company uses a job-order cost system in accounting for its manufacturing operations
1,440

ABC manufacturing produces three proucts. Production and cost information show the following
20,000

ABC Inc. produces the products. Production and cost information is as follows.
20%-30%-50%

Overhead costs include setups 90,000; shipping costs 140,000and engineering costs
74,000

During March ABC Company incurred the following costs on Job 209 for the manufacture of 200 motors
15.6

7,600
sting principles.....

rtime is caused by the:

is sold except

les is part of

n a proces...

he machine operator who operated the stamping machine

w the following

ufacture of 200 motors