Basic Accounting Quiz

What is managerial accounting used for?

• Only for tax purposes

• Planning and controlling

• Only for external users

• To create financial statements

Which of the following is a characteristic of managerial accounting information?

• Complexity

• Inaccuracy

• Timeliness

• Irrelevance

What does absorption costing include?

• Only variable costs

• Selling expenses

• Only direct materials

• Fixed manufacturing overhead

What is the purpose of a budget?

• To forecast financial results

• To increase costs

• To reduce sales

• To avoid planning

What is the break-even point?

• Where sales are highest

• Where costs exceed revenue

• Where profits are maximized

• Where total revenue equals total costs

What is a variable cost?

• Cost that is not related to production

• Cost that changes with production level

• Cost that is fixed for a year

• Cost that remains constant

What does the term 'margin of safety' refer to?

• Difference between actual sales and break-even sales

• Total sales for the year

• Total costs incurred

• Sales that are below average

Which of the following is NOT a function of management?

• Directing

• Planning

• Ignoring performance

• Controlling

What is the term for costs that are included in the product cost in absorption costing?

• Variable costs

• Sunk costs

• Fixed costs

• Direct costs

Which costing method charges fixed overhead costs as period costs?

• Job order costing

• Marginal costing

• Process costing

• Absorption costing