BRANCHES OF ACCOUNTING Flashcards
Preparation of general-purpose financial statements
financial accounting
Individuals or enterprises that have financial interest in the business but they are not involved in the day to day activities of the organization.
external users
Provides accounting information to internal users.
Needs accounting information for planning, organizing, directing, and controlling business operations.
managerial accounting
Those who make decisions directly affecting the internal operations of the business
internal users
Focused on the gathering cost information that is useful in determining prices
Helps in making the decision as to reduction or increase of selling prices
cost accounting
Preparation of tax returns
Provides tax advice:
taxation
tax avoidance vs tax evasion
avoidance = legal way
evasion = illegal
FORMULA FOR GROSS PURCHASE
purchased raw materials + freight in
NET PURCHASE
gross purchase - purchase discounts / returns
DIRECT MATERIALS USED
direct materials, beginning + net purchase - direct materials ending
TMC
direct materials + direct labor + manufacturing overhead
TGPIP
wip, beginning + total manufacturing cost
COST OF GOODS MANUFACTURED
tgpip - wip, ending
COST OF GOODS AVAILABLE FOR SALE
cost of goods manufactured + finished goods inventory, beginning
COST OF GOODS SOLD
COGAFS - finished goods inventory, ending
