Final Flashcards
(29 cards)
Assessment of the amounts, timing, and certainty of future cash flows best accomplished by
Statement of Cash Flows
Short-term obligations expected to be refinanced should be reported as current liabilities unless the entity both plans to refinance and has the ability to refinance the debt
Long- term basis
When the ending inventory of raw materials for the current year is understated, raw materials used, cost of goods produced, and cost of goods sold will be
Overstated
Interest is_____ for assets constructed or produced for the entity’s own use, assets intended for sale/lease that are constructed as discrete projects, and certain equity-based investments.
Capitalized
A long-lived asset is tested for recoverability whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable (carrying amount exceeds the sum of undiscounted cash flows expected from use and disposition of the asset).
_____ is not recorded as a long-term liability on the balance sheet, thus _____ result in off-balance-sheet financing
Operating Leases
- Advertising expense estimated for introduction of a new product is a _____ cost, which is a fixed cost not necessary to operate in the current period, with no clearly measurable relationship between costs and output
Discretionary
______ costing treats fixed factory overhead as product cost, so inventory and COGS include fixed factory overhead
Full absorption
______ costing is concerned with accumulating costs by specific job, appropriate when producing products when identifiable groupings are possible, such as custom-made for specific customers
Job-order
An appropriate cost driver for the indirect costs of a distribution function would be _____ since a cause-and-effect relationship may exist between distribution costs and number of shipments.
Number of shipments
______costing assumes the market price is given. Market price – target profit margin = long-term target cost
Target
______ costing treats direct manufacturing costs and manufacturing overhead costs (variable and fixed) as inventoriable costs
Absorption
In joint-product costing and analysis, ______ is relevant in deciding the point at which a product should be sold, since joint cost cannot be identified with a particular joint product and are thus irrelevant
separable cost after the split-off point
The most realistic overhead application rate reflecting a manufacturing capacity focus will be based on _____
Practical capacity
Some forms of internal control are properly eliminated when JIT systems are employed: for example, receiving departments are often eliminated, which ________ This is an _____ action, however, since it does not degrade the company’s system of internal controls
eliminates the need for hard copies of receiving reports, acceptable
- Outsourcing activities that can be performed more efficiently and at lower cost by outside providers can result in competitive advantage to a firm, because it allows the firm to concentrate its efforts on its ______
core competencies
Theory of Constraints employs throughput costing, in which all costs are considered fixed in the short run, ______ which is the only cost considered to be variable in the short run
except for direct materials
_______ is used to find an equation for the linear relationship among variables, and is often used to _______
Regression analysis, estimate a dependent variable when there is a known independent variable
______reflect the increased rate at which people perform tasks as they gain experience, and assumes that as experience is gained, the time required per unit will decrease by a constant percentage rate
Learning curves
The _____of an action is determined by multiplying the probability of each possible outcome by its payoff and summing the products, and is thus determined by the _____
expected value, weighted average of probable outcomes
Because the ____ for a company lays out the means by which the firm expects to fulfill its stated mission, no specific operational budgeting can begin until the strategic plan is completed. It has to be the ____ task in budgeting and planning
strategic plan, first
_____ are often determined by _____, are usually set for ___ year, and are often applied during the manufacturing process as if they were actual costs. They can be used at the ____ or any level of aggregation above, and although they are not the same as budgeted costs, they express what the company considers a benchmark for costs
Standard costs, time and motion studies, one, unit level
The _____ is calculated based on ______. The production budget is used to prepare materials purchases, direct labor and factory overhead budgets
production budget, sales forecasts adjusted by beginning and ending inventory requirements
- Variance analysis examines the deviation of actual results from expected results. Because variances may comprise a variety of “sub-variances”, the astute analyst will investigate all significant variances, whether favorable or unfavorable, to determine the core condition causing the variance
Unfavorable is not considered
