Quick Questions Memory Booster Flashcards
Financial accounts are summarised for the year at the (Week, Month, Year) end ?
Year end
Management accounting reports are usually available to (Internal, External) users ?
Internal users
Financial accounting reports are usually available to (Internal, External) users ?
External users
Composite cost units are units of output that are made up of (One, Two, Three, Four) variables
Two
True or False
Financial account statements have to be in a set format following rules.
True - this is only for financial accounting, management accounting can be more flexible and can be tailored to each busienss
(Management, Financial) accounting’s purpouse is to assist in decision making, planning and control ?
Management
True or False
Both management and financial accounting use the same data to create their reports.
True - management and financial accounting use the same data but the outcome of the data is different
As well as charging costs to cost units, they also need to be charged to a (Profit, Revenue, Cost, Investment) centre ?
Cost centre
True or False
Most cost centres can not become profit centres.
True - Most cost centres provide support services within the business so do not contribute directly with the revenue
Profit centres are segments of a business to which ………. can be charged, …………… can be identified and …………….. can be calculated ?
(Profit, Cost, Revenue)
- Costs
- Revenue
- Profit
Shop departments, restaurants, coffee shops are all examples of (Cost, Profit, Revenue, Investment) centres ?
Revenue centres
(Cost, Profit, Revenue, Investment) centres compare the profit with the amount of money invested into the centre ?
Investment centres
Materials, labour & expenses are (Nature, Element, Function, Behaviour) clasiffications of costs ?
Element classification
Direct & indirect are (Nature, Element, Function, Behaviour) clasiffications of costs ?
Nature classification
(Capital, Revenue) Expenditure is Money spent on long-term assets ?
Capital expenditure
(Capital, Revenue) Expenditure are Short-term expenses for supplies, repairs, and other operating costs that do not add value to an asset ?
Revenue expenditure
(Capital, Revenue) expenditures yield returns over an extended period, while (Capital, Revenue) expenditures are continuous costs of day-to-day operations ?
- Capital
- Revenue
Production, administration, sales & finance are all part of the (Element, Nature, Function, Behaviour) cost classification ?
Function
True or False
All costs increase/decrease directly in line with decreases/increases in output.
False - Costs have 4 different types of behaviour; Variable, Semi-Variable, Fixed, Stepped-Fixed
(Fixed, Variable, Semi-Variable) Costs remain the same at different levels of output ?
Fixed costs
For fixed costs, the cost per unit (Rises, Falls) as output increases ?
Falls - This is because the fixed costs dont change so as outpurt rises there are more units to spread the costs across but the cost remains the same.
True or False
All fixed costs can be identified as stepped fixed costs as in the long term they all increase.
False - Stepped fixed costs are identified in their own bracket as they increase by a large amount all at once
(Fixed, Variable, Semi-Variable) Costs rise directly with the increase of output ?
Variable costs
(Period/Product) costs are costs that become a part of the manufactured product, this consists of, direct materials, labour & expenses if any ?
Product cost
(Period/Product) costs are costs that are not part of the manufactured product and can not be assigned to products or closing inventory ?
Period cost
(Perpetual inventory, Just in time, formulas) records the receipt and issue of inventory as the items pass in and out of the business ?
Perpetual inventory
(Perpetual inventory, Just in time, formulas) is the ordering method where supplies of components are delivered to the production line just as they are needed ?
Just in time
When valuing inventory a business should choose the (Higher, Lower) of the buying and selling price ?
Lower
(FIFO, AVCO) is the inventory valuation method where the oldest cost price is used first ?
FIFO
(FIFO, AVCO) is the inventory valuation method where an average cost is calculated ?
AVCO
True or False
Labour cost falls under the element clasification of costs.
True - It is one of the three elements of cost, the others being materials and expenses
(Piecework rate, Time rate, Bonus system) is also known as basic pay and is where the employee is paid on the basis of time spent at work ?
Time rate
(Bonus system, Time rate, Piecework rate) is where the employee is paid an agreed amount ($) for each task carried out or for each unit of output completed ?
Piecework rate
(Time rate, Piecework rate, Bonus system) is a combination of time taken and work done ?
Bonus system
(Route card, Job card, Clock card, Time sheets) are where employees record the amount of hours they have worked
Time sheets - These are usually in the form of an excel document.
True or False
Employees dont need to know or understand how their pay is calculated.
False - Good labour payment methods need to be easy for the employee to understand how their pay is calculated
True or False
The bonus payment method is the only method that encourages employees to work harder.
False - The piecework payment method also encourages employees to work harder as payment is directly related to output
True or False
Under certain circumstances the labour costs of production-line employees can be classed as an indirect cost.
True - If there is any idle time due to no fault of the employee this can be classed as an indirect cost as well as overtime premiums
Overheads that belong entirely to one particular centre must be (Apportioned, Allocated) ?
Allocated
We need to (Apportion, Allocate) overheads that have been shared across multiple responsibility centres ?
Apportion
Overheads from wages of a supervisor that works in one particular responsibility centre need to be (Apportioned, Allocated) ?
Allocated
True or False
You can apportion / allocate overheads to cost centres ?
False - You can not do this as cost centres dont have cost units to which the overheads can be charged
Unit costing is the cost incurred to produce (Multiple, One, Two) cost object ?
One
(Job, Service, Unit, Batch) & (Job, Service, Unit, Batch) costing are the two specific order costing methods ?
Job & Batch costing
Job and batch costing are used in conjunction with (Marginal, Prime, Absorption) costing to recover the costs of the overheads ?
Absorption
Car repairs, house extenders & vehicle modding businesses would all be examples of businesses that use (Job, Service, Unit, Batch) costing ?
Job costing
(Job, Service, Unit, Batch) costing is used when each job can be seperatley identified from other jobs and costs are charged to the job ?
Job costing
(Job, Service, Unit, Batch) costing is used where the output consists of a number of identical items all produced at the same time ?
Batch costing
(Job, Service, Unit, Batch) & (Job, Service, Unit, Batch) are the two continuous work costing methods ?
Service & Unit costing
(Job, Service, Unit, Batch) costing is used by businesses that continuously produce a single product, here the cost objects are identical and have the same costs ?
Unit costing
True or False
In some businesses (mostly manufacturing) it is normal to have some wastage to an extent ?
True - If you are making carpets you wont be able to use all the material involved in creating the final output as it will need to be trimmed ect.
(Normal, Abnormal) wastage is included as part of the cost of the output ?
(Marginal, Absorption) costing is used to help with short term decision making ?
Marginal
(Marginal, Absorption) costing is used to calculate inventory valuations and profit ot loss in financial statements ?
Absorption
(Period, Product) costs are costs that become part of the manufactured product ?
Product
(Period, Product) costs are costs that can not be directly assigned to the manufactured product
Period
To help with short term decision making, costs are classified by their (Nature, Element, Behaviour, Function) ?
Behaviour
A budget that remains the same whatever the level of activity is a (Fixed, Flexible) budget ?
Fixed budget
Budgets that change with the level of activity and takes into account different cost behaviour patterns is a (Fixed, Flexible) budget ?
Flexible budget
If actual costs are lower than budgeted costs the variance is (Adverse, Favourable) ?
Favourable variance
If actual costs are higher than budgeted costs the variance is (Adverse, Favourable) ?
Adverse Variance
If the actual revenue is higher than the budgeted revenue the variance is (Favourable, Adverse) ?
Favourable variance
If the actual revenue is lower than the budgeted revenue the variance is (Favourable, Adverse) ?
Adverse variance
Budgets that are continually kept up-to-date by adding a new budget period once the most recent budget period it completes is a (Flexible, Fixed, Rolling) budget ?
Rolling budget
Costs that can be changed by a decision are (Irrelevant, Relevant) costs ?
Relevant cost
If a cost is not affected by a decision the cost is classed as a (Irrelevant, Relevant) cost ?
Irrelevant cost
