Reference no: EM133239784

Advanced Financial Accounting and Reporting

1. Cost accounting differs from financial accounting in that financial accounting:

• Provides the additional information required for special reports to management

• Is mostly concerned with external financial reporting

• Puts more emphasis on future operations

• Is mostly concerned with individual departments of the company

2. The cost of normal discrete losses is

• absorbed by all units in ending inventory.

• considered a period cost.

• absorbed by all units that passed the inspection point on an equivalent unit basis.

• written off as a loss on an equivalent unit basis.

3. A total variance is best defined as the difference between total

• actual cost and total cost applied for the standard output of the period.

• standard cost and total cost applied to production.

• actual cost and total standard cost of the actual input of the period.

• actual cost and total cost applied for the actual output of the period.

4. Normal spoilage units resulting from a continuous process

• result in a loss being incurred.

• cause estimated overhead to increase.

• are extended to the EUP schedule.

• result in a higher unit cost for the good units produced.

5. Statement I: PFRS 15 prescribes specific estimation techniques for variable consideration and only permits variable amounts to be included to the extent that it is probable that the revenue will not reverse.

Statement Il: Transaction price (at inception) should be allocated to all the performance obligations in the contract in proportion to the cost of each performance obligation.

• True, False

• False, False

• False, True

• True, True

6. Which of the following observations covering claims by general unsecured creditors is NOT true?

• They are entitled to preference payments at the discretion of debtor's management.

• The amounts to be paid to them are usually stated as a percentage of the total claim.

• They often receive less than the full amount of their claim.

• They are paid only after secured creditors and unsecured creditors with priority are satisfied to the extent of any legal limits.

7. In a process cost system, how is the unit cost affected in a cost of production report when materials are added in a department subsequent to the first department and the added materials result in additional units?

• It causes a decrease in the preceding department's unit cost but does not necessitate an adjustment of the transferred-in unit cost.

• It causes an increase in the preceding department's unit cost that necessitates an adjustment of the transferred in unit cost.

• It causes a decrease in the preceding department's unit cost that necessitates an adjustment of the transferred in unit cost.

• It causes an increase in the preceding department's unit cost but does not necessitate an adjustment of the transferred-in unit cost.