Question 1

In the Excel,or spreadsheet,approach to recording financial transactions,if manufacturing overhead is underapplied by X dollars,the Manufacturing Overhead account is closed out by deducting X dollars in the Manufacturing Overhead column and deducting X dollars in the Retained Earnings column.

Accepted Answer

This statement is true. When there is underapplied manufacturing overhead, the Manufacturing Overhead account is closed out by deducting the underapplied amount in the Manufacturing Overhead column and deducting the same amount in the Retained Earnings column. This helps adjust the accounts for the discrepancy between actual and applied manufacturing overhead costs.

Question 2

In the Excel,or spreadsheet,approach to recording financial transactions,the revenues and expenses on the income statement can be determined by summing each column.

Accepted Answer

False

Question 3

Sandra Corporation uses a job-order costing system to assign manufacturing costs to jobs.At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold.Its balance sheet on January 1 appears below:
  Summaries of the transactions completed during January appear below:
  Required:
Completely fill in the spreadsheet below.Because the page is too narrow to accommodate all of the columns,the spreadsheet has been divided into two parts that should be side by side.

Accepted Answer

Note: Entry (15),overapplied (underapplied)is a plug figure to make the ending balance in Manufacturing Overhead zero.

Question 4

In the Excel,or spreadsheet,approach to recording financial transactions,raw material purchases on account are recorded as increases in the Raw Materials inventory column and decreases in the Accounts Payable column.

Accepted Answer

Raw material purchases on account are recorded as increases in both the Raw Materials inventory column and the Accounts Payable column, reflecting an increase in inventory and a corresponding increase in the amount owed to suppliers.

Question 5

In the Excel,or spreadsheet,approach to recording financial transactions,factory depreciation is recorded as a decrease in the Property,Plant,and Equipment column and as a decrease in the Retained Earnings column.

Accepted Answer

Factory depreciation is recorded as a decrease in the Property, Plant, and Equipment column to reflect the reduction in value of the asset, and as an increase in the accumulated depreciation or an expense in the income statement, not directly as a decrease in the Retained Earnings column. Retained Earnings are affected indirectly through the net income after expenses, including depreciation, are subtracted.

Question 6

Wessendorf Corporation uses a job-order costing system to assign manufacturing costs to jobs.At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold.Its balance sheet on January 1 appears below:
  Summaries of the transactions completed during January appear below:
  Required:
a.Completely fill in the spreadsheet below.Because the page is too narrow to accommodate all of the columns,the spreadsheet has been divided into two parts that should be side by side.
   b.Prepare a Balance Sheet for the company for January 31.

Accepted Answer

The answer of Wessendorf Corporation uses a job-order costing system...

Question 7

In the Excel,or spreadsheet,approach to recording financial transactions,expired insurance coverage on factory equipment is recorded as a decrease in the Prepaid Insurance column and as a decrease in the Retained Earnings column.

Accepted Answer

Expired insurance coverage on factory equipment reduces the value of the asset, which in this case is factory equipment. Therefore, it should be recorded as a decrease in the factory equipment column (or similar fixed asset column) and as an increase in the insurance expense column, not in the prepaid insurance column. Additionally, since this is a decrease in assets, it would also decrease total equity, not just retained earnings.

Question 8

In the Excel,or spreadsheet,approach to recording financial transactions,an advertising expense paid in cash is recorded as a decrease in the Cash column and as a decrease in the Retained Earnings column.

Accepted Answer

The answer of In the Excel,or spreadsheet,approach to recording financial...

Question 9

In the Excel,or spreadsheet,approach to recording financial transactions,the cost of goods sold is recorded as a decrease in the Finished Goods column and as a decrease in the Retained Earnings column.

Accepted Answer

The answer of In the Excel,or spreadsheet,approach to recording financial...

Question 10

Angeloni Corporation uses a job-order costing system to assign manufacturing costs to jobs.At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold.Its balance sheet on July 1 appears below:
  Summaries of the transactions completed during July appear below:
  Required:
a.Completely fill in the spreadsheet below.Because the page is too narrow to accommodate all of the columns,the spreadsheet has been divided into two parts that should be side by side.
   b.Prepare a Schedule of Cost of Goods Sold for the company for July.
c.Prepare an Income Statement for the company for July.

Accepted Answer

The answer of Angeloni Corporation uses a job-order costing system...

Question 11

The equation "Ending balance in retained earnings = Beginning balance in retained earnings + Net operating income - Dividends" highlights the connection between the balance sheet and income statement and recognizes the fact that net operating income is essentially embedded within retained earnings on the balance sheet.

Accepted Answer

The equation accurately highlights the connection between the balance sheet and income statement and identifies that net operating income is reflected in retained earnings on the balance sheet.

Question 12

In the Excel,or spreadsheet,approach to recording financial transactions,the Manufacturing Overhead account is used to record two things-all actual overhead expenses and the amount of manufacturing overhead applied to production using the predetermined overhead rate.

Accepted Answer

The Manufacturing Overhead account in the Excel or spreadsheet approach is used to record both the actual overhead expenses and the amount of manufacturing overhead applied to production using the predetermined overhead rate.

Question 13

In the Excel,or spreadsheet,approach to recording financial transactions,direct labor paid in cash is recorded as a decrease in the Cash column and as an increase in the Work in Process column.

Accepted Answer

Direct labor paid in cash represents an increase in the Work in Process column, as it pertains to the cost of goods sold, and a decrease in the Cash column, as cash is being reduced due to the payment of direct labor costs.

Question 14

In the Excel,or spreadsheet,approach to recording financial transactions,manufacturing overhead applied is recorded as an increase in the Work in Process column and as a decrease in the Manufacturing Overhead column.

Accepted Answer

In the Excel or spreadsheet approach, manufacturing overhead applied is indeed recorded as an increase in the Work in Process column and as a decrease in the Manufacturing Overhead column. This is because manufacturing overhead is considered an indirect cost and is allocated to the products based on a predetermined overhead rate. As the overhead is applied to the work in process, it reduces the balance in the Manufacturing Overhead column and increases the balance in the Work in Process column.

Question 15

In the Excel,or spreadsheet,approach to recording financial transactions,cash paid to creditors is recorded as a decrease in the Cash column and as a decrease in the Retained Earnings column.

Accepted Answer

In the Excel, or spreadsheet, approach to recording financial transactions, cash paid to creditors is recorded as a decrease in the Cash column and as a decrease in the Accounts Payable column (not Retained Earnings). Retained Earnings is a component of the equity section of the balance sheet and is not directly affected by cash transactions.

Question 16

In the Excel,or spreadsheet,approach to recording financial transactions,factory utility costs paid in cash are recorded as a decrease in the Cash column and as an increase in the Manufacturing Overhead column.

Accepted Answer

Factory utility costs paid in cash are considered an expense for the manufacturer and are recorded as an increase in the Manufacturing Overhead column and a decrease in the Cash column.

Question 17

Venzke Corporation uses a job-order costing system to assign manufacturing costs to jobs.At the end of the month it closes out any overapplied or underapplied manufacturing overhead to Cost of Goods Sold.Its balance sheet on January 1 appears below:
  Summaries of the transactions completed during January appear below:
  Required:
a.Completely fill in the spreadsheet below.Because the page is too narrow to accommodate all of the columns,the spreadsheet has been divided into two parts that should be side by side.
   b.Prepare a Balance Sheet for the company for January 31.

Accepted Answer

The answer of Venzke Corporation uses a job-order costing system...

Question 18

In the Excel,or spreadsheet,approach to recording financial transactions,any transactions involving sales or expenses will be recorded in the Net Income column of the balance sheet.

Accepted Answer

In the Excel or spreadsheet approach to recording financial transactions, the income and expenses are recorded in the Income Statement, not in the Net Income column of the Balance Sheet. The Balance Sheet only shows the financial position of the company at a specific point in time, including the assets, liabilities, and equity.

Question 19

In the Excel,or spreadsheet,approach to recording financial transactions,indirect labor paid in cash is recorded as a decrease in the Cash column and as an increase in the Work in Process column.

Accepted Answer

Indirect labor paid in cash is recorded as a decrease in the Cash column and an increase in the Manufacturing Overhead column, not the Work in Process column, as it is a part of overhead costs, not direct costs.

Question 20

In the Excel,or spreadsheet,approach to recording financial transactions,work in process that has been completed is recorded as a decrease in the Work in Process column and as an increase in the Cost of Goods Sold column.

Accepted Answer

In the Excel or spreadsheet approach to recording financial transactions, work in process that has been completed is typically recorded as a decrease in the Work in Process column and as an increase in the Finished Goods inventory column, not directly into the Cost of Goods Sold column. Cost of Goods Sold is increased when the finished goods are actually sold.

Quiz 19: Job-Order Costing: a Microsoft Excel-Based Approach