introduction Flashcards
The main and primary objective of accounting
Provide financial information about an economic entity to different types of user
Cost accounting
An expanded phase of general or financial accounting which informs management promptly with the cost a rendering a particular service, buying and selling a product, and producing a product.
Cost accounting
Essential to efficient cooperation of business and industry
Manufacturing process
The conversion of raw materials into finished goods through the application of labor and the incurrence of various factory expenses
Financial accounting
Use of accounting information for reporting to external parties including investors and creditors
Bureau of internal revenue
Requires financial accounting information for compliance with the country’s tax law
Managerial accounting
Focuses on the needs of parties within the organization, rather than interested parties outside the organization
Timing and Relevance
The timing of information and relevance to the decision on hand has greater significance to the internal decision maker
Cost accounting
The intersection between financial and managerial accounting
Merchandising
Normally buys a product that is ready for resale when it is received
Manufacturing
Makes the goods they sell
Uses of cost accounting data
Basis for determining product cost and planning and controlling operations
Determining product costs
Cost accounting procedures help management in gathering the data needed to determine product cost
Uses of unit cost information in a marketing decision
Determining the selling price of a product
Meeting competition
Bidding on contracts
Analyzing profitability
Planning
The process of establishing objectives or goals for the firm and determining the means by which the firm will attain them
