Fun
If assets are 370,0000 and liabilities are 120,000. What is equity?
250,000
What is a liability?
future obligation
What is the following transactions effect on the accounting equation?
Purchase of inventory on account
Increase asset (increase inventory)
Increase liability (accounts payable)
What does the balance sheet contain?
assets, liabilities, stockholder's equity
What is another name for manufacturing costs? name the 3 components of manufacturing costs
product costs - Direct material, direct labor, Manufacturing overhead
What does the income statement show?
Revenue - expenses = net income
What is the difference between the composition of managerial reports vs financial reports
Financial accounting reports: Highly aggregated, condensed
Managerial accounting reports: highly detailed and specific
What is the following transactions effect on the accounting equation?
Pay for previously received and recorded inventory
Decrease asset (cash)
Decrease liability (accounts payable)
What is an asset?
future economic benefit
If liabilities are 0 and equity is 2,000,000, assets must be:
2,000,000
What is the only financial statement that is a snapshot in time?
balance sheet
What are the 2 components of stockholder's equity? What are they made up of?
Common stock (Investments by stockholders), Retained earnings (Revenue-expenses-dividends)
What is the following transactions effect on the accounting equation?
Pay dividends to stockholders
Decrease assets (cash)
Decrease stockholder's equity (dividends)
Give examples of internal reports made by managerial accountants
budget to actual, forecasts, variance analysis
What manufacturing cost cannot be traced directly to a product? Give 4 examples.
Manufacturing overhead - factory supervisor salary, factory equipment depreciation, indirect labor, indirect materials
What is the following transactions effect on the accounting equation?
Issuing common stock
Increase assets (cash)
Increase stockholder's equity (common stock)
What is another name for nonproduct costs? Give 3 examples
period costs - selling and admin expenses, commission pay, accountant's salary, marketing expenses.
What documentation is needed to assign direct raw materials to a job? What documentation is needed to assign direct labor worked?
Raw materials - Materials requisition slip
Direct labor - time tickets
How is the statement of retained earnings calculated?
Beginning retained earnings +/- Net income (loss) - dividends = Ending retained earnings
Who are the primary users for financial accountant reports and managerial accounting reports? Give examples of each type
Financial Accountants: External users (creditors, investors, regulatory agencies, tax authorities)
Managerial accountants: Internal users (company officers, supervisors, managers)
What is an internal control principle of documentation that is prenumbered and is a subsidiary ledger for the work in process account?
Job order cost sheet
Each increase or decreases in WIP inventory must be accompanied by a corresponding posting to one or more job order cost sheets
True or false: Manufacturing overhead is applied when assigning manufacturing overhead costs
True - Manufacturing overhead has not been incurred yet so we apply an estimated based on a predetermined overhead rate established at the beginning of the year
What is the difference between job order and process costing? Give examples of each
Job order costing: Each job or batch has its own distinguishing characteristic (jet, yacht, movie production, magazine issue)
What are the 3 sections of the statement of cash flows?
Cash flow from operations, cash flow from investing, cash flow from financing
When a job is completed, it moves from account to what account? When a job is sold, what account does it move to?
When a job is completed: Move it from eork in process to finished goods.
When a job is sold: Move it form finished goods to cost of goods sold