Test Bank Principles Of Cost Accounting 14e-Books Pdf

Test Bank Principles of Cost Accounting 14e
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This test bank contains a series of tags to provide guidance about the objectives of each ques. tion to the instructor The tags include,The degree of difficulty. To which learning objective in the text the question corresponds. The Institute of Management Accountants IMA Major Topic which is found under. the National Standard tag in EXAMVIEW and, The Assurance of Learning Standard per the Association to Advance Collegiate. Schools of Business AACSB which is found under the Topics tag in EX. Degree of Difficulty, Each multiple choice question and problem has been assigned a degree of difficulty of Easy. Moderate or Hard, Generally multiple choice questions that are definitions and contain language which is. the same or fairly similar to that of the text have been labeled Easy Other multiple. choice questions that would be labeled as Easy include concept application ques. tions where the answer is fairly obvious among the choices There are very few multi. ple choice questions that involve computations or problems that have been tagged. Moderate multiple choice questions include concept application questions computa. tional questions involving one level of calculations and definitions where interpreta. tion is required because the language is somewhat different than the text or where the. concept is one of the more obscure concepts in the chapter Problems that are labeled. as moderate are those that are similar to exercises in the text or do not involve a signif. icant amount of computation, Multiple choice questions and problems that involve more than one learning objective.
multiple layers of computations subtleties or require a different approach than pre. sented in the text have been tagged Hard,Consider the following examples from chapter 1. In job order costing the basic document for accumulating the cost of each order is the. a Job cost sheet,b Requisition sheet,c Purchase order. This question was considered Easy since the answer job cost sheet could be either recalled. quickly from reading or fairly obvious due to the terminology. Under a job order system of accounting Cost of Goods Sold is debited and Finished Goods is. credited for a,a Transfer of materials to the factory. b Shipment of completed goods to the customer, c Transfer of completed production to the finished goods storeroom. d Purchase of goods on account, This question was tagged Moderate because it involves some thought as to the journal en.
tries and the flow of goods through the plant It may or may not be something that is recalled. Which of the following would be least likely to appear on a performance report based on re. sponsibility accounting for the supervisor of an assembly line in a large manufacturing situa. a Direct labor,b Supervisor s salary,c Materials,d Repairs and maintenance. This question was tagged Hard because it may not be apparent to students that a supervi. sor s salary would not appear on his or her performance report as he or she does not have con. trol over the amount A similar question where Option b is selling expenses would be. moderate because it would be easier for the student to ascertain that a performance report in a. factory would not include selling expenses, Further information about the degree of difficulty can be found under Learning Objectives. Learning Objectives, The problems may be tagged with multiple learning objectives but each multiple choice ques. tion has been assigned just one learning objective based on the primary purpose of the question. For example consider the following multiple choice question from chapter 4. The Owens Company uses the machine hour method of applying factory overhead to produc. tion The budgeted factory overhead last year was 200 000 and there were 40 000 machine. hours budgeted Actual machine hours incurred during the period were 38 000 and actual. factory overhead was 215 000 What is the amount of under or overapplied factory over. a 10 000 underapplied,b 15 000 underapplied,c 25 000 underapplied. d 10 000 overapplied, The primary objective of this problem is to calculate the under or overapplied factory over.
head so it was assigned to learning objective 7 account for actual and applied factory over. In addition because the question also involves the calculation of the predetermined factory. overhead rate and the application of overhead which is discussed under learning objective 6. Apply factory overhead using predetermined rates and because it involves significant com. putation for a multiple choice problem it has been tagged as Hard in difficulty. If this question was a problem it would be labeled with both learning objectives 6 and 7 and. would be considered Moderate in difficulty because the required computations would not be. onerous for a problem,IMA Major Topics, Only one IMA tag has been assigned to each question dependent upon the primary objective. of the question,Tags Skills,1 Business Analysis, A Business Economics Micro economics laws of supply and demand. fixed variable and marginal costs competition,monopoly macro economics inflation unem. ployment economic growth gross domestic,product the business cycle and fiscal monetary. B Global Business Global trade net exports net imports foreign. currency foreign monetary exchanges function,of the World Bank IMF and legal and ethical.
issues of global business, C Internal Controls Risk assessment risk management inherent risk. control risk detection risk segregation of duties, internal audit function threats to information sys. tems controls to limit threats and disaster recov, D Quantitative Methods Regression equation assumptions of simple re. gression analysis linear programming and math,ematical formulation of a constraint. E Financial Statement Analysis Development of U S accounting standards dis. tinct responsibilities of management and auditors,for the financial statements and financial ratios.
2 Management Accounting and Reporting, A Budget Preparation The use of budgeting concepts and systems to pre. pare operational financial and capital budgets and. pro forma financial statements, B Cost Management Terminology related to cost principles cost be. havior drivers product costs cost of goods sold,job costing process costing activity costing. lifecycle costing the nature of overhead expenses,and the nature of overhead cost drivers. C Information Management Business information processing systems includ. ing networks applicable software electronic,commerce and enterprise wide planning systems.
D Performance Measurement Standard cost variances responsibility centers. reporting segments transfer pricing and the bal,anced scorecard. E External Financial Reporting Objectives of external financial reporting basic. accounting assumptions financial statement ele,ments and special accounting topics. 3 Strategic Management, A Strategic Planning Manufacturing paradigms such as the theory of. constraints JIT manufacturing MRP capacity,management value chain analysis value added. concepts process analysis benchmarking activi,ty based management and continuous improve.
ment concepts, B Strategic Marketing Interrelationships between strategy and market. ing customer value customer satisfaction mar,keting information needs difference between. products and services product line decisions,product mix decisions new product development. product life cycle strategies pricing decisions,general pricing approaches and product mix pric. ing strategies, C Corporate Finance Rates of return risk different types of risk using.
hedging to manage financial risk financial in,struments value bonds common stock preferred. stock impact of income taxes on financing deci,sions cost of capital and capital structure. D Decision Analysis Steps needed to reach a decision relevant costs. sunk costs opportunity costs cost volume profit,analysis special orders and pricing decisions. make versus buy decisions sell or process further,decisions add or drop a segment decisions price. setting and target costing, E Investment Decision Analysis Capital budgeting discounted cash flow analysis.
payback and ranking of investment projects, 4 Business Applications Standards of Ethical Conduct for IMA Mem. bers organization management organization,communication behavioral issues and ethical. considerations, This test bank did not utilize all of the above tags Topics marked with were the primary. tags used but other tags were utilized as appropriate. These are derived from the AACSB website The Assurance of Learning Standards 15 Man. agement of Curricula,Tags Skills,AACSB Communication Communication abilities. AACSB Ethics Ethical understanding and reasoning abilities. AACSB Analytic Analytic skills,AACSB Technology Use of information technology.
AACSB Diversity Multicultural and diversity understanding. AACSB Reflective Thinking Reflective thinking skills. Multiple choice questions involving definitions computations or descriptions of procedure. were considered Analytic as were most of the problems Questions that require the student. to apply a definition were tagged Reflective for reflective thinking There were some mul. tiple choice questions pertaining to ethics that were tagged as such Tags for Communication. Technology or Diversity were not relevant to this test bank. Consider these questions from chapter 1 which test the same concept. Factory overhead includes,a Indirect labor but not indirect materials. b Indirect material but not indirect labor, c All manufacturing costs except indirect material and indirect labor. d All manufacturing costs except direct materials and direct labor. This question tests the student s knowledge of the definition so it is Analytic It has also. been marked Easy,Factory overhead would include,a Wages of office clerk. b Sales manager s salary,c Supervisor s salary,d Tax accountant s salary. This question involves knowledge of not only the definition but application of that. knowledge to a factory setting so it was tagged Reflective and Moderate. Maria R Mitchell,Thomas More College,Crestview Hills Kentucky.
CHAPTER 1 INTRODUCTION TO COST ACCOUNTING,MULTIPLE CHOICE. 1 Factory overhead includes,a Indirect labor but not indirect materials. b Indirect materials but not indirect labor, c All manufacturing costs except indirect materials and indirect labor. d All manufacturing costs except direct materials and direct labor. Factory overhead includes all manufacturing costs except direct materials and direct labor. PTS 1 DIF Easy REF P OBJ 4,NAT IMA 2B Cost Management TOP AACSB Analytic. 2 The term prime cost refers to, a The sum of direct labor costs and all factory overhead costs.
b The sum of raw material costs and direct labor costs. c All costs associated with manufacturing other than direct labor costs and raw material. d Manufacturing costs incurred to produce units of output. The term prime cost refers to the sum of raw materials costs and direct labor costs. PTS 1 DIF Easy REF P OBJ 4,NAT IMA 2B Cost Management TOP AACSB Analytic. 3 The term conversion costs refers to, a The sum of direct labor costs and all factory overhead costs. b The sum of raw material costs and direct labor costs. c All costs associated with manufacturing other than direct labor costs. d Direct labor costs incurred to produce units of output. The term conversion costs refers to the sum of direct labor costs and all factory overhead costs. PTS 1 DIF Easy REF P OBJ 4,NAT IMA 2B Cost Management TOP AACSB Analytic. 4 A typical factory overhead cost is,a Freight out. b Stationery and printing,c Depreciation on machinery and equipment.
Depreciation on machinery and equipment is a factory overhead cost i e it is a manufacturing cost. but it can t be identified with specific jobs or processes whereas the other three items are selling and. administrative expenses,PTS 1 DIF Moderate REF P OBJ 4. NAT IMA 2B Cost Management TOP AACSB Reflective, 5 Under a job order system of cost accounting the dollar amount of the entry to transfer inventory from. Work in Process to Finished Goods is the sum of the costs charged to all jobs. a In process during the period,b Completed and sold during the period. c Completed during the period,d Started in process during the period. When jobs are completed during the period Finished Goods is debited and Work in Process is credited. for the cost of the finished jobs,PTS 1 DIF Moderate REF P OBJ 7.
NAT IMA 2B Cost Management TOP AACSB Analytic, 6 Which of the following production operations would be most likely to employ a job order system of. cost accounting,a Candy manufacturing,b Crude oil refining. c Printing text books,d Flour Milling, Printing would be most likely to employ a job order system of cost accounting due to the number of. custom jobs involved The manufacture of candy the vulcanizing of rubber and the refining of crude. oil would normally be a continuous process of producing like goods and would be accounted for under. the process cost system,PTS 1 DIF Moderate REF P OBJ 6. NAT IMA 2B Cost Management TOP AACSB Reflective, 7 In job order costing the basic document for accumulating the cost of each order is the.
a Job cost sheet,b Requisition sheet,c Purchase order. In job order costing the basic document to accumulate the cost of each order is the job cost sheet. PTS 1 DIF Easy REF P OBJ 7,NAT IMA 2B Cost Management TOP AACSB Analytic. 8 When should process costing techniques be used in assigning costs to products. a In situations where standard costing techniques should not be used. b If the product is composed of mass produced homogeneous units. c When production is only partially completed during the accounting period. d If the product is manufactured on the basis of each order received. Process costing techniques should be used in assigning costs to products if the product is composed of. mass produced homogeneous units,PTS 1 DIF Easy REF P OBJ 6. NAT IMA 2B Cost Management TOP AACSB Analytic, 9 An industry that would most likely use process costing procedures is. a Beverage,b Home Construction,c Printing,d Shipbuilding.
Beverage production usually consists of manufacturing long runs of homogeneous products for. which process costing is used The other three industries would utilize job order costing. PTS 1 DIF Moderate REF P OBJ 6,NAT IMA 2B Cost Management TOP AACSB Reflective. 10 Under a job order system of cost accounting Cost of Goods Sold is debited and Finished Goods is. credited for a,a Transfer of materials to the factory. b Shipment of completed goods to the customer, c Transfer of completed production to the finished goods storeroom. d Purchase of goods on account, When completed goods are shipped to customers Cost of Goods Sold is debited and Finished Goods is. PTS 1 DIF Moderate REF P OBJ 7,NAT IMA 2B Cost Management TOP AACSB Analytic.
11 Payroll is debited and Wages Payable is credited to. a Pay the payroll taxes,b Record the payroll,c Pay the payroll. d Distribute the payroll, When the payroll is recorded Payroll is debited and Wages Payable is credited When payroll taxes. are paid the various liability accounts are debited and Cash is credited When the payroll is paid. Wages Payable is debited and Cash is credited When the payroll is distributed Work in Process. Factory Overhead and Selling and Administrative Expenses are debited and Payroll is credited. PTS 1 DIF Moderate REF P OBJ 5,NAT IMA 2B Cost Management TOP AACSB Analytic. 12 Selected data concerning the past fiscal year s operations 000 s omitted of the Stanley Manufacturing. Company are presented below,INVENTORIES,Beginning Ending. Raw materials 90 85,Work in process 50 65,Finished goods 100 90.
Other data,Raw materials used 365, Total manufacturing costs charged to production during. the year includes raw materials direct labor and factory. overhead 680,Cost of goods available for sale 765,Selling and general expenses 250. The cost of raw materials purchased during the year amounted to. Raw materials used 365,Add ending inventory of raw materials 85. Materials available during the year 450,Less beginning inventory of raw materials 90. Purchases of raw materials during the year 360,PTS 1 DIF Hard REF P OBJ 4.
NAT IMA 2B Cost Management TOP AACSB Analytic, 13 Selected data concerning the past fiscal year s operations 000 s omitted of the Stanley Manufacturing. Company are presented below,INVENTORIES,Beginning Ending. Raw materials 90 85,Work in process 50 65,Finished goods 100 90. Other data,Raw materials used 365, Total manufacturing costs charged to production during. the year includes raw materials direct labor and factory. overhead 680,Cost of goods available for sale 765,Selling and general expenses 250.
The cost of goods manufactured during the year was. Total manufacturing costs during the year 680,Add beginning work in process inventory 50. Less ending work in process inventory 65,Cost of goods manufactured during the year 665. PTS 1 DIF Moderate REF P OBJ 4,NAT IMA 2B Cost Management TOP AACSB Analytic. 14 Selected data concerning the past fiscal year s operations 000 s omitted of the Stanley Manufacturing. Company are presented below,INVENTORIES,Beginning Ending. Raw materials 90 85,Work in process 50 65,Finished goods 100 90.
Other data,Raw materials used 365, Total manufacturing costs charged to production during. the year includes raw materials direct labor and factory. overhead 680,Cost of goods available for sale 765,Selling and general expenses 250. The cost of goods sold during the year was,Beginning finished goods inventory 100. Add cost of goods manufactured during the year 680 50 65 665. Total cost of goods available for sale 765,Less ending finished goods inventory 90. Cost of goods sold during the year 675,PTS 1 DIF Hard REF P OBJ 3.
NAT IMA 2B Cost Management TOP AACSB Analytic, 15 At a certain level of operations per unit costs and profit are as follows manufacturing costs 50. selling and administrative expenses 10 desired profit 20 Given this information the mark on. percentage to manufacturing cost used to determine selling price must have been. a 40 percent,b 60 percent,c 33 percent,d 25 percent. Manufacturing cost 50,Selling and administrative expenses 10. Desired profit 20,Selling price 80,Selling price Manufacturing costs. Mark on percentage,Manufacturing costs,PTS 1 DIF Hard REF P OBJ 5.
NAT IMA 2B Cost Management TOP AACSB Analytic, 16 Which of the following items of cost would be least likely to appear on a performance report based on. responsibility accounting for the supervisor of an assembly line in a large manufacturing situation. a Direct labor,b Supervisor s salary,c Materials,d Repairs and maintenance. A supervisor s salary would be least likely to appear on a performance report because that person s. salary is determined by the company and is not controllable by the supervisor. PTS 1 DIF Hard REF P OBJ 1, NAT IMA 2D Performance Measurement TOP AACSB Reflective. 17 Which of the following items of cost would be least likely to appear on a performance report based on. responsibility accounting for the supervisor of an assembly line in a large manufacturing situation. a Direct labor,b Indirect materials,c Selling expenses. d Repairs and maintenance, Selling expenses would be least likely to appear on a performance report because the supervisor.
would not have responsibility for the sales function. PTS 1 DIF Moderate REF P OBJ 1, NAT IMA 2D Performance Measurement TOP AACSB Reflective. 18 Which of the following statements best describes a characteristic of a performance report prepared for. use by a production line department head, a The costs in the report should include only those controllable by the department head. b The report should be stated in dollars rather than in physical units so the department head. knows the financial magnitude of any variances, c The report should include information on all costs chargeable to the department regardless. of their origin or control, d It is more important that the report be precise than timely. The performance report should include only those costs controllable by the department head It should. also be timely and should include production data as well as dollar amounts. PTS 1 DIF Easy REF P OBJ 1, NAT IMA 2D Performance Measurement TOP AACSB Analytic.
19 Unit cost information is important for making all of the following marketing decisions except. a Determining the selling price of a product,b Bidding on contracts. c Determining the amount of advertising needed to promote the product. d Determining the amount of profit that each product earns. Unit cost information is used in determining selling price bidding on contracts and determining. product profitability but would not have a bearing on determining how much the product would need. to be advertised,PTS 1 DIF Moderate REF P OBJ 1,NAT IMA 3B Strategic Marketing TOP AACSB Analytic. 20 Cost accounting differs from financial accounting in that financial accounting. a Is mostly concerned with external financial reporting. b Is mostly concerned with individual departments of the company. c Provides the additional information required for special reports to management. d Puts more emphasis on future operations, Items b through d are characteristics of cost accounting whereas Item a is a feature of financial. accounting,PTS 1 DIF Moderate REF P OBJ 3, NAT IMA 2E External Financial Reporting TOP AACSB Reflective. 21 The business entity that converts purchased raw materials into finished goods by using labor. technology and facilities is a,a Manufacturer,b Merchandiser.
c Service business,d Not for profit service agency. The business entity that converts purchased raw materials into finished goods by using labor. technology and facilities is a manufacturer,PTS 1 DIF Easy REF P OBJ Introduction. NAT IMA 4 Business Applications TOP AACSB Analytic. 22 The business entity that purchases finished goods for resale is a. a Manufacturer,b Merchandiser,c Service business,d For profit service business. The business entity that purchases finished goods for retail is a merchandiser. PTS 1 DIF Easy REF P OBJ Introduction, NAT IMA 4 Business Applications TOP AACSB Analytic. 23 The type of merchandiser who purchases goods from the producer and sells to stores who sell to the. consumer is a,a Manufacturer,b Retailer,c Wholesaler.
d Service business, The type of merchandiser that purchases goods from the producer and sells to the retailer is a. wholesaler,PTS 1 DIF Easy REF P OBJ Introduction, NAT IMA 4 Business Applications TOP AACSB Analytic. 24 Inventory accounts for a manufacturer include all of the following except. a Merchandise Inventory,b Finished Goods,c Work in Process. d Materials, Inventory accounts for a manufacturer include Materials Work in Process and Finished Goods. PTS 1 DIF Easy REF P OBJ 3,NAT IMA 2B Cost Management TOP AACSB Analytic.
25 Examples of service businesses include,a Airlines architects and hair stylists. b Department stores poster shops and wholesalers, c Aircraft producers home builders and machine tool makers. d None of these are correct, Examples of service businesses include airlines architects and hair stylists. PTS 1 DIF Moderate REF P OBJ Introduction, NAT IMA 4 Business Applications TOP AACSB Reflective. 26 In the financial statements Materials should be categorized as. b Expenses,d Liabilities, Materials are included in inventory which is an asset on the balance sheet because it has a future.
PTS 1 DIF Moderate REF P OBJ 3, NAT IMA 2E External Financial Reporting TOP AACSB Reflective. 27 Factory overhead would include,a Wages of office clerk. b Sales manager s salary,c Supervisor s salary,d Tax accountant s salary. The supervisor s salary is an indirect factory cost. PTS 1 DIF Moderate REF P OBJ 4,NAT IMA 2B Cost Management TOP AACSB Reflective. 28 The statement of costs of goods manufactured shows. a Office supplies used in accounting office,b Deprecation of factory building.
c Salary of sales manager,d Rent paid on finished goods warehouse. The factory building is a cost necessary to manufacture goods. PTS 1 DIF Hard REF P OBJ 3,NAT IMA 2B Cost Management TOP AACSB Reflective. 29 Responsibility accounting would most likely hold a manager of a manufacturing unit responsible for. a cost of raw materials,b quantity of raw materials used. c workers pay scale,d amount of taxes incurred, In responsibility accounting the manager of a cost center is only responsible for those costs the. manager controls,PTS 1 DIF Moderate REF P OBJ 1, NAT IMA 2D Performance Measurement TOP AACSB Reflective.
30 Which of the following is not a cost that is accumulated in Work in process. a Direct materials,b Administrative expense,c Direct labor. d Factory overhead, Administrative expense is not a factory cost so it would not be included in work in process. PTS 1 DIF Moderate REF P OBJ 5,NAT IMA 2B Cost Management TOP AACSB Analytic. 31 Mountain Company produced 20 000 blankets in June to be sold during the holiday season The. manufacturing costs were,Direct materials 125 000,Direct labor 55 000. Factory overhead 60 000, Managment has decided that the mark on percentage necessary to cover the product s share of selling.
and administrative expenses and to earn a satisfactory profit is 30 The selling price per blanket. Direct materials 125 000,Direct labor 55 000,Factory overhead 60 000.


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