Chap 1

Question 1

2 types of accounting

Answer 1

managerial

financial

Question 2

What is Managerial Accounting?

Answer 2

end-users are the internal users
reports determined by managers
information designed to meet the specific needs of a company’s management.

Question 3

What is financial accounting?

Answer 3

endusers are usually external users

reported at fixed intervals in general-purpose financial statements.

Question 4

who uses financial accounting financial statements

Answer 4

shareholders, creditors, government agencies, the general public

Question 5

information collected by managerial accountants

Answer 5

historical and estimated data

Question 6

historical data

Answer 6

provide objective measures of post operation

Question 7

estimated data

Answer 7

provide subjective estimates about future decisions

Question 8

what are the 5 steps of the management process

Answer 8

planning, directing, controlling, improving and decision making

Question 9

planning

Answer 9

used in developing the company goals and translating goals into courses of action

Question 10

directing

Answer 10

process by which managers run day to day operations

Question 11

controlling

Answer 11

monitoring operating results with the expected results

Question 12

improving

Answer 12

continuous process improvement

management by exception

Question 13

two types of planning

Answer 13

strategic

operational

Question 14

strategic

Answer 14

long term strategies

Question 15

operational

Answer 15

short term strategies

day to day

Question 16

continuous process improvement

Answer 16

philosophy of continually improving employees, business processes, products, etc

Question 17

management by exception

Answer 17

philosophy of controlling by comparing actual and expected results

Question 18

the objective of continuous process improvement

Answer 18

to eliminate the source of problems in a process

Question 19

decision making

Answer 19

inherent in each of the preceding management processes

when managing a company management must continually decide among alternative actions

Question 20

product making process

Answer 20

customer places order, materials, cutting, assembly, finished product

Question 21

cost

Answer 21

a sacrifice to obtain debit

Question 22

cost object

Answer 22

anything to which costs are assigned and will vary depending upon the decision making needs of management.

Question 23

types of costs

Answer 23

direct

indirect

Question 24

direct costs

Answer 24

identified with and traced to a cost object

Question 25

indirect cost

Answer 25

are not identified with or traced to a cost object

Question 26

manufacturing cost

Answer 26

cost of a manufacturing product includes the cost of materials into a finished product
3 types

Question 27

types of manufacturing costs

Answer 27

direct material
direct labor
factory overhead

Question 28

direct materials cost

Answer 28

cost of any material that is an integral part of the finished product
sig portion of total cost

Question 29

direct labor cost

Answer 29

the cost of employee wages that is an integral part of the finished product
uses employees to convert materials to finished product

Question 30

factory overhead cost

Answer 30

costs other than direct materials and direct labor that are incurred in the manufacturing process are combined.

Question 31

factory overhead cost examples

Answer 31

heating/lighting the factory, repairing equipment, property tax, insurance, depreciation of the plant

Question 32

prime costs

Answer 32

direct material and labor costs

Question 33

conversion costs

Answer 33

direct labor and factory overhead cost

cost of converting materials into finished product

Question 34

costs

Answer 34

product

period

Question 35

product costs

Answer 35

direct labor
direct materials
overhead 
when incurred they are recorded on balance sheet as inventory
when sold reported as COGS on is

Question 36

period costs

Answer 36

selling expenses
admin expenses’
only on income statement never balance sheet

Question 37

selling expenses

Answer 37

marketing and delivering the product

Question 38

admin expenses

Answer 38

managing the company

Question 39

the three inventory types on manufacturing business balance sheets

Answer 39

materials inventory, work in process inventory, finished goods inventory

Question 40

materials inventory

Answer 40

consists of the cost of the direct/indirect materials that haven’t entered the manufacturing process.

Question 41

work in process

Answer 41

consists of direct materials, direct labor and factory overhead costs for products that have entered the manufacturing process, but are not completed.

Question 42

Finished goods inventory

Answer 42

consists of completed products that have not been sold

Question 43

cost of goods manufactured

Answer 43

the manufacturing costs associated with the goods that were finished during the period

Question 44

cost of goods sold

Answer 44

the total cost of merchandise sold during the period

Question 45

statement of cost of goods manufactured

Answer 45

The income statement of manufacturing companies.

Question 46

steps statement of COGM uses

Answer 46

determine cost of materials used
determine total manufacturing incurred
determine cost of goods manufactured

Question 47

assets

Answer 47

resoruces owned by business entity
cash, supplies, acct rec, buildings
increase debit
assets=liabilities+OE

Question 48

liabilities

Answer 48

debts owned to outsiders
acct pay, notes pay, wages pay, interest pay
decrease debit

Question 49

owners equity

Answer 49

owners rights to the assets after liabilities have been paid for
decrease debit

Question 50

revenues

Answer 50

increases in assets and OW as a result of selling services or products
debit decrease

Question 51

expenses

Answer 51

using up of assets or consuming service in the process of generating rev
debit increase