Question 1

How would Honda classify its partially completed vehicles?
A)Finished goods
B)Raw materials
C)Supplies
D)Work in process

Accepted Answer

Partially completed vehicles would be classified as work in process because they are in the process of being created but are not yet finished products.

Question 2

A company which is in the business of providing intangible services is what type of company?
A)Manufacturing
B)Service company
C)Retailer
D)Wholesaler

Accepted Answer

A company that provides intangible services is a service company. Unlike manufacturing companies, they do not produce physical products, but provide services such as consulting, accounting, or IT support. Retailers and wholesalers both deal with tangible products, not services.

Question 3

Describe service,merchandising,and manufacturing companies.

Accepted Answer

Service companies sell intangible services such as insurance,consulting and health care.Salaries and wages often are the largest part of their costs.They usually do not have inventory or cost of goods sold accounts,although some service companies will have a small amount of supplies inventory which is used for their own use and not for sale to customers.Merchandising companies resell tangible products they buy from suppliers.Retailers and wholesalers are both types of merchandising companies.Retailers sell to end user consumers,while wholesalers sell to other resellers.Merchandisers have inventory.Manufacturing companies use labour,plant and equipment to convert raw materials into finished products which they sell to other companies.They have three types of inventory-raw materials,work in process,and finished goods.

Question 4

A company which is in the business of reselling tangible products purchased from supplier to businesses which resell the product is what type of company?
A)Manufacturing
B)Service company
C)Retailer
D)Wholesaler

Accepted Answer

A company which resells tangible products purchased from suppliers to businesses that resell the product is called a wholesaler. Wholesalers typically operate as intermediaries between manufacturers and retailers or other businesses. They purchase goods in large quantities from manufacturers, store them in warehouses, and then sell them in smaller quantities to retailers or other businesses at a markup.

Question 5

A company which is in the business of reselling tangible products purchased from suppliers to final users is what type of company?
A)Manufacturing
B)Service company
C)Retailer
D)Wholesaler

Accepted Answer

A company that resells tangible products purchased from suppliers to final users is a retailer. A retailer operates by buying products from a wholesale supplier and then selling them at a markup to consumers.

Question 6

A lawn mowing business would be classified as a
A)manufacturing company.
B)merchandising company.
C)service company.
D)wholesale company.

Accepted Answer

A lawn mowing business provides a service to customers by maintaining and cutting their lawns, making it a service company.

Question 7

Before these materials are used to manufacture its cars,Honda classifies steel,glass,and plastic as
A)finished goods inventory.
B)raw materials inventory.
C)work in process inventory.
D)merchandise inventory.

Accepted Answer

Steel, glass, and plastic are considered raw materials as they have not yet gone through the manufacturing process to become finished goods. Therefore, choice B, raw materials inventory, is the best classification for these materials.

Question 8

Intel Corporation makes computer chips.Intel Corporation would be classified as a
A)manufacturing company.
B)merchandising company.
C)service company.
D)wholesale company.

Accepted Answer

Intel Corporation is a manufacturing company as it produces computer chips.

Question 9

H & R Block,an income tax preparation service,is what type of company?
A)Manufacturer
B)Service company
C)Retailer
D)Wholesaler

Accepted Answer

H&R Block is a service company that provides income tax preparation services to individuals and businesses. They do not manufacture or sell products or act as a middleman between manufacturers and retailers, which rules out options A, C, and D.

Question 10

Wal-Mart classifies its clothing held for sale as
A)finished goods inventory.
B)raw materials inventory.
C)work in process inventory.
D)merchandise inventory.

Accepted Answer

Wal-Mart's clothing that is held for sale is considered merchandise inventory, which is inventory that is purchased in a finished state and intended for resale. Option A is incorrect because finished goods inventory includes items that have been completed but not yet sold or delivered. Option B is incorrect because raw materials inventory is materials that are used in production but have not yet been processed into finished goods. Option C is incorrect because work in process inventory includes partially completed goods that are still being worked on in the production process.

Question 11

Among other things,General Mills makes breakfast cereal.Which type of company is General Mills?
A)Manufacturer
B)Service company
C)Retailer
D)Wholesaler

Accepted Answer

General Mills is a manufacturer as they produce breakfast cereal.

Question 12

Which type(s)of companies prepare income statements and balance sheets?
A)Service company
B)Merchandising company
C)Manufacturing company
D)All types of companies

Accepted Answer

All types of companies prepare income statements and balance sheets as these financial statements provide valuable information regarding the financial performance and position of the company. However, the content and format of these statements may vary based on the type of company and the nature of its business operations.

Question 13

________ has/have three types of inventory.
A)A service company
B)A merchandising company
C)A manufacturing company
D)A wholesale company

Accepted Answer

A manufacturing company typically has three types of inventory: raw materials, work-in-progress, and finished goods. A service company does not have physical inventory, and a merchandising company only has two types of inventory - beginning inventory and ending inventory of merchandise for resale. A wholesale company can be either a service, merchandising, or manufacturing company, depending on the type of products they sell.

Question 14

Which type of company typically produces its own inventory?
A)Manufacturer
B)Service company
C)Retailer
D)Wholesaler

Accepted Answer

Manufacturers are companies that produce their own inventory. They typically take raw materials and turn them into finished goods that are sold to retailers, wholesalers, or directly to consumers. Service companies do not produce physical inventory, and retailers and wholesalers can either produce their own inventory or purchase it from manufacturers.

Question 15

Which of the following is characteristic of a service company?
A)Service companies generally have no tangible products to sell.
B)Service companies have a single category of inventory.
C)Service companies make a product.
D)Service companies transform raw materials into finished goods.

Accepted Answer

Service companies typically offer intangible services instead of tangible products. They may provide services such as consulting, financial planning, or healthcare. They do not transform raw materials into finished goods like manufacturing companies do. Service companies may have inventory, but it is usually limited to supplies and equipment necessary for providing the service.

Question 16

Which of the following costs could be found in work in process inventory for an ice cream manufacturer?
A)Utilities for administrative offices
B)Assembly worker wages
C)Depreciation on sales office
D)Customer order forms

Accepted Answer

Work in process inventory accounts for the costs associated with the production of goods, including direct labor costs such as assembly worker wages. Utilities for administrative offices, depreciation on sales offices, and customer order forms are not directly tied to the production process and would not be found in work in process inventory.

Question 17

Explain the difference between raw materials inventory,work in process inventory,and finished goods inventory.

Accepted Answer

The answer of Explain the difference between raw materials inventory,work...

Question 18

Which type of company has the highest percentage of labour costs?
A)Service company
B)Merchandising company
C)Manufacturing company
D)Wholesale company

Accepted Answer

Service companies typically have the highest percentage of labor costs because their business model relies heavily on the provision of services, which requires human effort and expertise, rather than the production or sale of physical goods.

Question 19

The balance sheet of a service company has
A)little or no inventory.
B)raw materials inventory.
C)three categories of inventory.
D)two categories of inventory.

Accepted Answer

Service companies typically do not deal with physical products or inventory, so their balance sheet will not have any raw materials or finished goods inventory. Therefore, Option A is the correct choice.

Question 20

A law firm would be classified as a
A)manufacturing company.
B)merchandising company.
C)service company.
D)wholesale company.

Accepted Answer

A law firm provides legal services rather than producing goods (manufacturing company), selling goods (merchandising company), or purchasing and selling goods in bulk (wholesale company). Therefore, it falls under the category of a service company.

Quiz 2: Building Blocks of Managerial Accounting

How would Honda classify its partially completed vehicles?

A company which is in the business of providing intangible services is what type of company?

Describe service,merchandising,and manufacturing companies.

A company which is in the business of reselling tangible products purchased from supplier to businesses which resell the product is what type of company?

A company which is in the business of reselling tangible products purchased from suppliers to final users is what type of company?

A lawn mowing business would be classified as a

Before these materials are used to manufacture its cars,Honda classifies steel,glass,and plastic as

Intel Corporation makes computer chips.Intel Corporation would be classified as a

H & R Block,an income tax preparation service,is what type of company?

Wal-Mart classifies its clothing held for sale as

Among other things,General Mills makes breakfast cereal.Which type of company is General Mills?

Which type(s) of companies prepare income statements and balance sheets?

________ has/have three types of inventory.

Which type of company typically produces its own inventory?

Which of the following is characteristic of a service company?

Which of the following costs could be found in work in process inventory for an ice cream manufacturer?

Explain the difference between raw materials inventory,work in process inventory,and finished goods inventory.

Which type of company has the highest percentage of labour costs?

The balance sheet of a service company has

A law firm would be classified as a