Exam 4 - Ch 10

Question 1

Financial Accounting

Answer 1

EXTERNAL. think outsiders for who you make financial statements for - investors, creditors, bank agencies.

Question 2

Managerial Accounting

Answer 2

INTERNAL. think anything that any employee would need like economic & physical data

Question 3

Managerial Acct Regulation

Answer 3

There is no regulation and is only limited by the value-added principle

Question 4

Financial Acct Regulation

Answer 4

Regulation by SEC, FASB and other determiners of GAAP

think: bc this is public info it must follow specified guidelines

Question 5

What info is included in managerial acct

Answer 5

because it is internal it just contains relevant information so decisions can be made in a timely basis.

not everything is included in the report

Question 6

what info is included in financial acct

Answer 6

contains factual info that is reliable, consistent and accurate

Question 7

what is the time horizon/reporting frequency of managerial acct

Answer 7

includes past, present, and future and continuous reporting

they don’t like to look at past bc they already lost the money, so they think about being more efficient in the future

Question 8

what is the time horizon/reporting frequency of financial accounting

Answer 8

it is historically based (based on what has already happened)
includes things from past only

with emphasis on annual reporting - frequency

Question 9

what are the two types of costs or expenses

Answer 9

PRODUCT cost or PERIOD cost

separating any expense into these two buckets helps us follow GAAP and keep financial statements accurate

Question 10

Components of Product Costs (3)

Answer 10

1.) Materials - the direct raw materials
2.) Labor - the direct labor of transforming materials into products
3.) Overhead - other indirect costs consumed in the process of making the products