general

Question 1

The accounting cycle

Answer 1

collecting, analyzing, and summarizing

Question 2

Business documents

Answer 2

sales invoices, purchase orders, check stubs, cancelled checks, electronic payments

Question 3

Revenues ______ Owners’ Equity

Answer 3

increase

Question 4

Expenses ______ Owners’ Equity

Answer 4

decrease

Question 5

operating activities

Answer 5

activities that are part of the day-to-day business of a company

Question 6

Financing activities

Answer 6

activities whereby cash is obtained from or repaid to owner’s and creditors

Question 7

inflows

Answer 7

selling goods or services

Question 8

outflows

Answer 8

payments to purchase inventory, pay wages, taxes, interest, utilities, rent, etc…

Question 9

Investing activities

Answer 9

activities associated with buying and selling long-term assets

Question 10

period costs

Answer 10

non-manufacting costs
-selling and administrative costs
-general costs
-office and corporate expenses

Question 11

Product Costs

Answer 11

manufacturing costs
-direct materials
-direct labor
-manufacturing overhead

Question 12

unfavorable cost variance

Answer 12

a difference between the actual cost and the budgeted cost where the actual cost is more than the budgeted amount

Question 13

favorable cost variance

Answer 13

a difference between the actual cost and the budgeted cost where the actual cost is less than the budgeted amount

Question 14

articulation

Answer 14

the interrelationships among the financial statements

-The income statement explains the change in the retained earnings balance in the balance sheet

-The statement of cash flows explains the change in the cash balance in the balance sheet

Question 15

statement of cash flows

Answer 15

a report of a company’s cash inflows and outflows categorized into operating, investing, and financing activities

Question 16

cost pool

Answer 16

the total overhead cost identified as being generated by a specific overhead cost activity

Question 17

cost driver

Answer 17

a numerical measure used to reflect the amount of a specific overhead cost that is associated with an overhead cost activity.

Question 18

Cost of goods manufactured statement

Answer 18

a schedule supporting the income statement that summarizes th etotal cost of goods manufactured and transferred out of the work-in-process inventory account during a period. Costs include: Direct materials, direct labor, and applied manufacturing overhead

Question 19

actual manufacturing overhead

Answer 19

manufacturing costs other than direct labor and direct materials

Question 20

applied manufacturing overhead

Answer 20

the amount of manufacturing overhead that is assigned to the goods products

Question 21

book value

Answer 21

the value of a company measured by the amount of owner’s equity in the company

Question 22

market value

Answer 22

the value of a company as measured by the number of shares of stock outstanding multiplied by the current market price of the stock; the current value of business

Question 23

all budgets start with a _____ or a ______

Answer 23

sales budget; sales forecast

Question 24

master budget process

Answer 24

1) Sales budget/sales forecast
2) the production budget
3) selling and administrative expense budgets
4) cash inflows and outflows can be formed into pro forma financial statements

Question 25

management accounting

Answer 25

-Unique competitive tool
-Both financial and nonfinancial data
-Usually kept secret from competitors
-Used for internal planning, control, and evaluation

Question 26

financial accounting

Answer 26

-Uniform across companies (GAAP)
-Restricted to financial data
-Data often made public
-Used primarily by investors and creditors in deciding whether to provide capital to the company

Question 27

Sequence of the flow of costs

Answer 27

1) purchase raw materials
2) transfer raw materials to production
3) add direct labor and manufacturing overhead costs
4) Transfer the cost of completed goods to finished inventory
5) Sell goods and transfer cost to cost of goods sold