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Managerial Accounting Tools
Budgeting & Cost Analysis
Inventories and The Cost of Goods Sold
Accounting Principles and Records
Notes Receivable
100

This costing method tracks costs by individual job and is used for customized orders.

What is Job Order Costing?

100

This budgeting method uses different activity levels to evaluate performance.

What is a Flexible Budget?

100
What is inventory?
Inventory means good owned and held for sale to consumers.
100
What is an asset?
An asset is anything of value that is owned.
100
What are notes receivable?
Notes receivable are promissory notes that a business accepts from customers.
200

What are the two components of product cost in process costing?

What are direct materials and conversion costs?

200

This method uses the highest and lowest activity levels to estimate fixed and variable costs.

What is the High-Low Method?

200
The inventory on hand and the cost of goods sold for the year are not determined until ____ ___.
Year end.
200
An amount owed by a business is called a _________.
liability
200
What are notes receivable classified as?
Current assets.
300

This is the formula for computing a predetermined overhead rate.

What is Estimated Overhead รท Estimated Activity Base?

300

In CVP analysis, this is the point where total revenue equals total cost.

What is the Break-Even Point?

300
When is the weighted average method usually used?
Weighted average is typically used when products are physically indistinguishable or easily substituted.
300
What is the accounting equation, and how is it normally stated?
The accounting equation is an equation showing the relationship among assets, liabilities, and owner's equity. It is normally stated as: Assets = Liabilities + Owner's Equity
300
A note that is not paid when due is called a __________ ____.
dishonored note
400

ABC costing assigns overhead based on these instead of volume.

What are activities (or cost drivers)?

400

The difference between a static and flexible budget is that a flexible budget...

...adjusts based on actual activity levels.

400
What is the difference between LIFO and FIFO?
LIFO assumes that the oldest costs are the costs of goods sold and the recent costs go to the ending inventory; FIFO assumes that the recent costs are the costs of goods sold and the oldest costs go to the ending inventory.
400
Each journal entry must be supported by a ______ ________ proving that a transaction occurred.
source document
400
What types of journals are used to record notes receivable?
General journal and cash receipts journal.
500

This report summarizes manufacturing costs incurred by department in a process costing system.

What is a Production Cost Report?

500

These two types of variances are used to evaluate direct labor performance.

These two types of variances are used to evaluate direct labor performance.

500
Why is an accurate valuation of inventory important?
An error in ending inventory in a year will result in the same error in the beginning inventory of the next year.
500
What is the normal balance of an assets account?
The debit side of the T account is the normal balance of an assets account.
500
True or false: The recording of notes receivable and dishonored notes will not impact other accounts.
True.