This quiz works best with JavaScript enabled. Home > Finance > Accounting > International Accounting > International Accounting – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books International Accounting Quiz 7 (18 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Factory depreciation is A) A prime cost and an inventoriable cost. B) A prime cost and a period cost. C) A conversion cost and an inventoriable cost. D) A conversion cost and a period cost. E) A discretionary cost. Show Answer Correct Answer: C) A conversion cost and an inventoriable cost. 2. The Financial Budget process includes A) Cash budget. B) Capital expenditure budget. C) Budgeted statement of cash flows. D) Budgeted balance sheet. E) All of the above. Show Answer Correct Answer: E) All of the above. 3. The Eastern Division sells goods internally to Western Division of the same company. The quoted external price in industry publications from a supplier near Eastern is $ 200 per ton plus transportation. It costs $ 20 per ton to transport the goods to Western. Eastern's actual market cost per ton to buy the direct materials to make the transferred product is $ 100. Actual per ton direct labor is $ 50. Other actual costs of storage and handling are $ 40. The company president selects a $ 220 transfer price. This is an example of A) Variable cost-based transfer pricing. B) Negotiated transfer pricing. C) Market based transfer pricing. D) Cost plus 20% transfer pricing. E) Full-cost based transfer pricing. Show Answer Correct Answer: C) Market based transfer pricing. 4. The use of activity-based costing normally results in A) Substantially greater unit costs for low volume products than is reported by traditional product costing. B) Substantially lower unit costs for low volume products than is reported by traditional product costing. C) Decreased set-up costs being charged to low-volume products. D) Equalizing set-up costs for all product lines. E) Making pricing decisions more difficult. Show Answer Correct Answer: A) Substantially greater unit costs for low volume products than is reported by traditional product costing. 5. What is likely to be the source of accounting standards in common law countries? A) Tax law. B) Non-government entities such as the FASB. C) Federal and local legislatures. D) The International Accounting Standards Board. Show Answer Correct Answer: B) Non-government entities such as the FASB. 6. How are the concepts of professionalism, uniformity, conservatism, and secrecy classified in Gray's framework for accounting system development? A) Institutional consequences. B) Accounting systems. C) Accounting values. D) Cultural dimensions. Show Answer Correct Answer: C) Accounting values. 7. In developing comprehensive planning and control system, the best chronological order of significant components of the system is to develop A) Long range goals, strategic plan, performance reports. B) Long range goals, system of performance reports, budget and strategic plan. C) Long range profit plan, system of performance reports, budget and then goals. D) System of performance reports, strategic plan, long range goals and budget plan. E) Long range goals, strategic plan, budget and then establish a system of performance reports. Show Answer Correct Answer: E) Long range goals, strategic plan, budget and then establish a system of performance reports. 8. Which one of the following statements pertaining to the Return on Investment (ROI) as a performance measurement is INCORRECT? A) When the average age of the assets differs substantially across segments of a business, the use of ROI may not be appropriate. B) ROI relies on financial measures that are capable of being independently verified, while other forms of performance measures (e.g. nonfinancial performance measures) are subjet to manipulation. C) The use of ROI may lead managers to reject capital investment projects that can be justified by using discounted cash flow models. D) The use of ROI can make in undesirable for skillfull manager to take on trouble-shooting assignments such as those involving turning around unprofitable divisions. E) The use of ROI may include managers of highly profitable divisions to reject projects that, from the standpoint of the corporation, should be accepted. Show Answer Correct Answer: B) ROI relies on financial measures that are capable of being independently verified, while other forms of performance measures (e.g. nonfinancial performance measures) are subjet to manipulation. 9. Which of the following is considered a pervasive constraint by the FASB's conceptual framework? A) Verifiability. B) Timeliness. C) Conservatism. D) Cost. Show Answer Correct Answer: D) Cost. 10. Which of the following is not a problem caused by accounting diversity? A) Comparability of financial statements. B) Lack of qualified international auditors. C) Preparation of consolidated financial statements. D) Access to foreign capital markets. Show Answer Correct Answer: B) Lack of qualified international auditors. 11. An appropriate transfer price between two divisions of the Stark Company can be determined from the following date:Fabrication Division:Market price of subassembly $ 50Variable cost of subassembly $ 20Excess capacity (in units) 1, 000Assembling Division:Nuber of units needed 900What is the bargaining range for the two divisions? A) Between $ 20 and $ 50. B) Between $ 50 and $ 70. C) $ 50 is the only acceptable price. D) $ 20 is the only acceptable price. E) Between $ 20 and $ 35. Show Answer Correct Answer: A) Between $ 20 and $ 50. 12. A cost driver is defined as A) A causa factor that increases or decreases the total cost of a cost object. B) An indirect cost that cannot be traced to a particular cost objective but is essential to business. C) The significant factor in a development of a new product. D) The largest cost in a manufacturing process. E) A leading indicator for future performance. Show Answer Correct Answer: A) A causa factor that increases or decreases the total cost of a cost object. 13. The term that refers to past costs that have been incurred and are NOT relevant to any future decisions is A) Underallocated indirect costs. B) Incurred marginal costs. C) Sunk costs. D) Full absorption costs. E) Discretionary costs. Show Answer Correct Answer: C) Sunk costs. 14. In computing the current period's manufacturing cost per equivalent unit, the FIFO method of process costing considers current period costs A) Less cost of ending work-in-process inventory. B) Plus cost of ending work-in-process inventory. C) Only. D) Plus cost of beginning of work-in-process inventory. E) Less cost of beginning of work-in-process inventory. Show Answer Correct Answer: C) Only. 15. Who is the father of accounts A) Alfred Marshall. B) Adma Smith. C) Luca Pacioli. D) KS Ayer. Show Answer Correct Answer: C) Luca Pacioli. 16. National Products is in the process of preparing a bid to produce meters for the federal government on a cost plus basis. While the company has produced meters for a number of years, it has only recently begun to produce meters for the government, as special equipment and processes are required to meet the government standards. In order to be competitive, the company must bid as low as possible but still make profit.The method of cost analysis that National Products should use to compute product cost is A) Multiple regression analysis. B) Network analysis. C) Simple regression analysis. D) Decision tree analysis. E) Learning curve analysis. Show Answer Correct Answer: E) Learning curve analysis. 17. In cost terminology, prime costs consist of A) Direct materials and variable factory overhead. B) Direct labor and indirect labor. C) Indirect labor and fixed factory overhead. D) Direct materials and direct labor. E) Direct labor, direct materials and variable factory overhead. Show Answer Correct Answer: D) Direct materials and direct labor. 18. In a production company the unit costs for raw materials and direct labor represent A) Relevant costs. B) Committed costs. C) Prime costs. D) Conversion costs. Show Answer Correct Answer: C) Prime costs. ← PreviousRelated QuizzesAccounting QuizzesFinance QuizzesInternational Accounting Quiz 1International Accounting Quiz 2International Accounting Quiz 3International Accounting Quiz 4International Accounting Quiz 5International Accounting Quiz 6 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books