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C213 - Accounting > Final Study Guide > Flashcards

Final Study Guide Flashcards

1
Q

What would an internal auditor typically NOT perform in a large company

A

Prepare the primary financial statements

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2
Q

Following Financial activities are available:
Operating Activities $309,800
Investing Activities ($118,000)
Financing Activities ($190,000)
Ending Cash Balance $5,600

Given this information, what is the beginning cash balance?

A

$3800

x+309,800 - $118,000 - $190,000 = $5600

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3
Q

What is typically viewed as the fundamental measure of a company’s profitability?

A

Net Income

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4
Q

What are the three primary categories of an income statement

A

Revenues
Expenses
Gains
Losses

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5
Q

Income statements that do not relate to a company’s continuing operations are income from what

A

Income from continuing operations and extraordinary losses

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6
Q

When revenue and expense items are arranged to highlight important profit relationships, the resulting i come statement format is called what

A

Multi-Step Income Statement

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7
Q

Revenue should be recognized when value has been delivered to customers which is typically only after the required work has been performed and after the collection of cash is reasonably assured. What method is used to decide when to recognize expenses?

A

Matching Concept

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8
Q

Individual transactions impacting income can be analyzed using the expanded accounting equation, which is:

A

Assets=Liabilities + Paid-In Capital + (Revenues-Expenses-Dividends)

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9
Q

What is an important use of an income statement?

A

It requires an understanding of what underlying factors determine the level of a revenue or an expense.
Forecast income for future periods

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10
Q

What is the process that accountant use in adjusting raw transaction data into refine measures of a firm’s economic performance?

A

Accrual Accounting

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11
Q

A concept that states that income exists when the dollar amount of a company’s net assets increases during the year, after excluding the effects of new owner investment or payment of dividends is called

A

Financial Capital Maintenance

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12
Q

What equals sales revenues minus fixed costs

A

Net Profit

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13
Q

Why is gross profit an important number

A

If a company is not generating enough from the sale of a product or service to cover the costs directly associated with that product or service, that company will not be able to stay in that line of business for long

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14
Q

What measures the performance of the fundamental business operations conducted by a company and is computed as gross profit minus operating expense

A

Operating Income

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15
Q

What does operating income tell a business

A

How well a business is performing in the activities unique to that business, separate from the financing and income tax management policies that are handled at the corporate headquarters level

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16
Q

What is a key purpose of financial accounting

A

Provides interested parties with information that can be used to predict how a company will perform in the future

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17
Q

What is a desired income number that reflects the aspects of a company’s performance that is expected to continue into the future

A

Income from Continuing Operations

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18
Q

How is income from continuing operations computed

A

By subtracting interest expense, income tax expense, and other misc. items from operating income

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19
Q

Income from continuing operations is significant because of the two categories of items that it excludes. What are those two categories?

A

Income from discontinued operations and Extraordinary Gains and Losses

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20
Q

What is the number used to reflect an overall measure of the change in a company’s wealth during the period?

A

Comprehensive Income

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21
Q

The concept that income is defined as the excess of net assets at the end of an accounting period over the net assets at the beginning of the accounting period, excluding effect of transactions with owners is called

A

Financial Capital Maintenance

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22
Q

Given the following information, compute income from continuing operations:
COGs $2000
Extra.O item -$170
Income taxes 350
Interest Expense 200
Operating Exp. 1500
Sales 5500

A

$1450

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23
Q

Given the following information, compute net income:
COGS $2000
Extra.O Item -170
Income Taxes 350
Interest Expense 200
Operating Exp 1500
Sales 5500

A

1280

(For Net Income, include the extra.O #)

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24
Q

The reported amount of these represent the value of goods and services provided by a company in its business operations

A

Revenue

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25
Q

The recorded amount of this represents the values of resources used in generating the reported revenue

A

Expenses

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26
Q

What would be examples of costs in a manufacturing company?

A

Direct Materials and Direct Labor

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27
Q

What would be examples of costs in a manufacturing company>

A

Wholesale cost paid to purchase inventory

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28
Q

What is created by activities undertaken in the normal course of business

A

Revenues and expenses

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29
Q

When a company makes or loses money on activities that are peripheral to its primary operations, the amount classifies as these instead of revenue or expenses

A

Gains and Losses

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30
Q

Gains and losses that result from transactions that are both unusual in nature and infrequent in occurrence are called

A

Extraordinary Items

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31
Q

When a company determines to get out of a specific line of business, what happens to the revenues and expenses from that line of business?

A

Revenues and expenses from that line of business are excluded from the company’s recurring revenues and expenses when preparing an income statement

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32
Q

Earnings per share is equal to

A

Net income / Total number of shares of stock outstanding

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33
Q

The following information was taken from the records of Tellers Corporation from the month ended Dec. 31 2012:

Ad. Expense $20,625
In. Tax Exp. $13,095
Acc. Pay $13,450
Divid. Paid $ 14,125
Retained Earnings $ 57,860
Consult. Fee Rev. $93,550
Rent Exp. $11, 728
Supp. Exp $16,917

If Teller’s has 2,100 shares of stock outstanding, earnings per share is approx. what?

A

14.85

Net income: 93,500 - 20,625 - 13,095 - 11,728 - 16,917 = 31,185

EPS = 31,185/2100 shares = $14.85

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34
Q

A system of providing “quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions”

A

Accounting

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35
Q

The flip side of accounts receivable; when one company sells on credit, creating itself an account receivable, the company on the other side of the transaction is buying on credit, creating this

A

Accounts payable

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36
Q

Amounts owed to a business by its credit customers and are usually collected in cash within 10-60 days

A

Accounts Receivable

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37
Q

The grouped together and reported changes which companies experience increases and decreases in equity each year because of the movement of market prices or exchange rates

A

Accumulated Other Comprehensive Income

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38
Q

A method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs

A

Activity Based Costing (ABC)

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39
Q

Invested by stockholders that exceeds the par value of the issued shares

A

Additional Paid-In Capital

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40
Q

The professional organization of certified public accountants in the United States

A

American Institue of Certified Public Accountants (AICPA)

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41
Q

Probable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events

A

Asset

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42
Q

The proportion of total assets in each asset category, is determined to a large degree by the industry in which the company operates

A

Asset Mix

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43
Q

Sales divided by assets and is interpreted as the number of dollars in sales generated by each dollar of assets

A

Asset Turnover

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44
Q

The firm’s economic resources

A

Assets

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45
Q

Members of a company’s board of directors who are responsible for dealing with the external and internal auditors

A

Audit Committee

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46
Q

Shows the average number of days that elapse between sale and cash collection

A

Average Collection Period

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47
Q

A listing of an organization’s assets and of its liabilities at a certain time

A

Balance Sheet

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48
Q

Activities that take place in order to support a batch or production run, regardless of the size of the batch

A

Bath-level Activities

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49
Q

The preservation of a systematic, quantitative record of an activity

A

Bookkeeping

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50
Q

The amount of sales at which total costs of the number of units sold equal to total revenues; the point at which there is no profit or loss

A

Break-Even Point

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51
Q

What type of income statement emphasizes the presentation of gross profit and operating income

A

Multi-Step Income Statement

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52
Q

What type of income statement merely groups all of the revenues and all the expenses, and reports the overall difference as net income

A

Single-Step Income Statement

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53
Q

The concept typically used in practice to determine when an expense should be recognized is the

A

Matching Concept

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54
Q

In summary, the three methods used to determine when to recognize an expense are

A

Direct Matching, as with COGs
Systematic Allocation as with depreciation
Immediate recognition as with advertising

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55
Q

Costs that can be reasonably associated with specific revenues but not with specific products should be

A

Expensed in the period in which the related revenue is recognized

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56
Q

What are examples of acceptable basis for the recognition of expenses?

A

Systematic and rationale recognition
Direct Matching
Immediate Recognition

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57
Q

The revenue principle states that revenue should be recognized at a point when?

A

An exchange transaction involving goods and services has occurred and the earnings process is essentially complete

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58
Q

What is an example of an application of the principle of systematic and rational allocation

A

Depreciation Expense

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59
Q

An example of direct matching of an expense with revenues would be

A

Direct labor costs incurred to product inventory sold during a period

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60
Q

Analysis of revenue and expense transactions requires the use of what type of equation?

A

Expanded accounting equation

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61
Q

Thus far, the only national government to adopt the accrual basis for its official accounting system is

A

New Zealand

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62
Q

Cash is _____________ and Accounts receivable is ____________________ when cash is collected from customers who had previously purchased a product or service on account

A

Increased; decreased

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63
Q

Most forecasting exercises begin with a forecast of

A

sales

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64
Q

Cash flows are partitioned into what three categories

A

Operating
Investing
Financing

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65
Q

What are the primary investing activities in the statement of Cash flows

A

Purchase and sale of land, buildings, and equipment

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66
Q

Financing activities in the statement of cash flows involve the receipt of

A

Cash from and the repayment of cash to owners and creditors

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67
Q

What are the activities in the operating statement of cash flows?

A

Those entered into the calculation of net income

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68
Q

Summarizes a company’s cash flows for a period of time

A

Statement of Cash Flows

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69
Q

Significant noncash financing and investing transactions are reported where?

A

In a narrative or in a separate schedule

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70
Q

Those transactions and events that enter into the determination of net income are reported under which section of the statement of cash flows

A

Operating Expenses

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71
Q

What is short-term. highly liquid investments such as treasury bills, commercial paper, and money market funds?

A

Cash Equivalents

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72
Q

Normal business activities such as collecting cash from customers, paying cash for inventory purchases, paying employees, paying rent, etc. which happen every day in a business are called

A

Operating Activities

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73
Q

Investing in the activities associated with the productive capacity of the business, like buying equipment, land, buildings, etc

A

Investing Activities

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74
Q

Obtaining the capital of financing to make things happen, like borrowing money or paying dividends, is considered

A

Financing Activities

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75
Q

The number used to reflect an overall measure of the change in a company’s wealth during the period is

A

Comprehensive Income

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76
Q

The proper order on an income statement for the various measures of income is:

A

Gross Profit
Operating Income
Income from Continuing Operations
Net Income
Comprehensive Income

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77
Q

When a company determines to get out of a specific line of business

A

Revenues and expenses from that line of business are excluded from the company’s recurring revenues and expenses when preparing an income statement

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78
Q

Selling a product is considered a what

A

Revenue generating activity

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79
Q

For a gain or loss to be classified as extraordinary, it must be what?

A

Both Unusual and Infrequent

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80
Q

True/False

With multiple-step income statement all revenues are grouped together, all expenses are grouped together, and net income is computed as the difference between the two.

A

FALSE

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81
Q

This is not an acceptable basis for the recognition of the expenses

A

Cash Disbursement

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82
Q

List of example of expenses of doing business

A

Wages and buying landscape supplies

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83
Q

If a company anticipates a 40% increase in sales volume, then it is most likely that the company will need about a 40% increase in

A

Accounts Payable

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84
Q

Most forecasting exercises begin with a forecast of

A

Sales

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85
Q

This summarizes all cash inflows and outflows of an entity for a given period of time

A

The statement of cash flows

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86
Q

What are some purposes for the statement of cash flows

A

Measures the profitability of an entity
Provides investors with information about the investing and financing activities of an entity
Highlights changes in managerial strategy regarding investments and finances

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87
Q

What would be added to net income on a statement of cash flows prepared using the indirect method

A

A decrease in accounts receivable

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88
Q

A loss from the sale of a building would be reported on an indirect method statement of cash flows as

A

An addition to net income

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89
Q

The indirect method of preparing a statement of cash flows does all of the following

A

Results in the same net cash flow from operating activities as the direct method
Is the method most often used in practice
Involves adjusting the net income figure for any noncash experience

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90
Q

This would be subtracted from net income on a statement of cash flows prepared by the indirect method

A

A gain from the sale of equipment

91
Q

The direct and indirect methods will usually show different amounts of cash flows from

A

Operating Activities

92
Q

The method that begins with net income or net loss and adjusts that number for items that did not affect cash is called

A

Indirect method

93
Q

The approach of to preparing a statement of cash flows that adjusts net income to cash flows from operations is the

A

Indirect Method

94
Q

What would be added to net income on a statement of cash flows prepared using the indirect method

A

A decrease in accounts receivables

95
Q

The direct method of presenting a statement of cash flows does this

A

Shows the major classes of operating cash receipts and payments

96
Q

This statement best describes financial statement analysis

A

Financial statement analysis involves relationships and trends

97
Q

What is the purposes of financial statement analysis

A

Diagnosis and Prognosis

98
Q

Relationships between financial statement amounts are called

A

Financial Ratios

99
Q

External users of financial statements use financial statement analysis for

A

Investing Decisions

100
Q

Financial statement analysis is greatly enhanced when financial ratios are compared with

A

Past values and values for other firms in the same industry

101
Q

The identification of where a business has problems is the

A

Diagnosis

102
Q

The prediction of how a business will perform in the future is the

A

Prognosis

103
Q

Which ratio is calculated using only balance sheet numbers?

A

Current Ratio

104
Q

Which ratio is calculated using only income statement numbers

A

Return on Sales

105
Q

Which ratio is calculated using numbers from both the income statement and the balance sheet

A

Return on Equity

106
Q

What ratio is used to measure a firm’s liquidity

A

Current ratio

107
Q

Which of the following ratios is a comparison of a financial statement number to a market value number?

A

Price Earnings Ratio

108
Q

Which of the following ratios represents the proportion of borrowed funds used to acquire the company’s assets

A

Debt Ratio

109
Q

Which of the following ratios is used to measure a firm’s efficiency at using its assets

A

Asset Turnover

110
Q

Which transaction could increase a firm’s current ratio?

A

Payment of Accounts Payable

111
Q

Which is most useful in analyzing companies of different sizes

A

Common-sized Financial statements

112
Q

In a common-size balance sheet, using the percentage of sales method, each item on the balance sheet is typically expressed as a percentage of

A

Sales Revenue

113
Q

A useful tool in financial statement analysis is the common-size financial statement. What does this tool enable the financial analyst to do?

A

Compare the mix of revenue and expenses
Determine efficient use of resources within a company over time or between companies within a given industry without respect to relative size

114
Q

When analyzing a company’s debt ratio, if the ratio has a value that is equal to 1, the company has

A

No Stockholder’s Equity

115
Q

The ratio that indicates if a borrowing company will be able to meet its required interest payments is the

A

Times Interest Earned Ratio

116
Q

The return on equity ratio under the DuPont framework is computed as

A

Net income/Equity

117
Q

Which asset is used to measure a firm’s efficiency

A

Sales/Assets

118
Q

Which cash flow ratio reflects a company’s ability to finance its capital expansion through cash from operations

A

Cash Flow Adequacy

119
Q

Which cash flow ratio reflects a company’s ability to make its interest payments from cash generated through operations

A

Cash x Interest Earned

120
Q

The particular analytical measures chosen to analyze a company will not be influenced by what

A

Product quality or service effectiveness

121
Q

These are benchmarking problems when analyzing financial statements

A

Reported financial statement numbers may actually be a measurement of different things
Companies that are being compared to conglomorates
Not all companies use the same accounting practices

122
Q

A company has a policy of net 10 and is considering changing it to net 30 to be more in line with industry standards. What is a benefit to changing the credit policy?

A

Attracting more customers

123
Q

If a company does not record accrued wages expense at the end of the year, how does this affect the year-end financial statements?

A

Overstates Owner Equity

124
Q

If the total amount for Rent Expense is inadvertently posted to Prepaid Rent at the end of the year, what will be the effect on the year-end financial statements?

A

Assets will be overstated

125
Q

Recording the payment of an account payable twice will result in

A

The Understatement of total assets and total liabilities

126
Q

Failure to record the used portion of supplies on hand during the month has this effect on the financial statements prepared at the end of the month

A

Overstates Assets

127
Q

If two different accountants were to estimate the percentage of customers who will not pay their accounts, they could arrive at different estimates. These differing estimates would affect the financial statements. Such differences in assessing estimates are due to

A

Disagreement in Judgement

128
Q

Fraudulent accounting is the result of

A

Intentional errors in the accounting records

129
Q

If a company does not record accrued wages expense at the end of the year, how does this affect the year-end financial statements

A

Overstates owner’s equity

130
Q

What are the five basic categories of internal control

A

Control Environment
Risk Assessment
Control ACtivities
Information and Communication
Monitoring

131
Q

What requires that every company’s annual report contain an internal control report

A

Sarbanes-Oxley Act

132
Q

The purpose of the audit committee within an organization is to

A

Be responsible for the external and internal auditors

133
Q

What are valid control procedures

A

Segregation of Duties
Adequate documents and records
Independent checks on performance

134
Q

Internal controls are not designed to help and protect whom

A

Tax collectors

135
Q

Every year, Doug is required to take one full week of vacation time is an example of

A

Independent check on performance

136
Q

Independent checks on performance is not considered what

A

a preventative control

137
Q

If an external auditor suspects wrongdoing in financial statements, the concerns should be addressed to

A

The audit committee

138
Q

What is the correct order of the earnings management contiuum

A

Strategic matching
Change in methods or estimates with full disclosure or estimates with little or no disclosures
Non-GAAP accounting
Fictitious transactions

139
Q

Earnings management through aggressive accounting is best exemplified by

A

Changing the useful life of a depreciable asset and fully disclosing it in the notes

140
Q

A desire for personal gain is not typically a reason for

A

Managing Reported Earnings

141
Q

Earnings management through deceptive accounting is best exemplified by

A

Changing the interest rate used in accounting for leases without describing the changes in the notes to the financial statements

142
Q

There is not a clear definition as to

A

which of these are ethical and which are not in the earnings management continuum

143
Q

Recording as an asset expenditures that have no future economic benefit is an example of

A

Non-GAAP Accounting

144
Q

Both the deceptive concealment of transactions and the creation of fictitious transactions is

A

Fraud

145
Q

Most companies that engage in earnings management typically do not go beyond this

A

Strategic Matching

146
Q

As William is preparing the end of year financial statements, he has been asked to review the accrual judgments and estimates to see if the originally calculated net loss can be changed to net profit. This is an example of

A

Meeting External Expectations

147
Q

The Sarbanes Oxley Act establishes what

A

Constraints on auditors
Independent oversight of auditors
Constraints on company management

148
Q

According to Sarbanes-Oxley, accounting firms are permitted to provide this to its audit client

A

Opinions about the reliability of internal controls

149
Q

According to Sarbanes-Oxley, who are auditors required to report to and be retained by?

A

Audit Committee

150
Q

The Public Company Accounting Oversight Board is NOT required to

A

Enforce compliance with the Foreign Corrupt Practices Act

151
Q

The Public Company Accounting Oversight Board does what

A

Conducts inspections of accounting firms

152
Q

What does Sarbanes-Oxley not require management to do

A

Make loans to executive officers and directors

153
Q

This requires CPAs to provide reasonable assurance that significant fraud or misstatement is not present in financial statements

A

Generally Accepted Auditing Standards

154
Q

This best describes the role of external auditors when auditing a large public company

A

Examine the organization’s accounting for a sample of business transactions to provide reasonable assurance that the financial statements are presented fairly

155
Q

What is the most common professional designation for external auditors

A

Certified Public Accountant

156
Q

When does the Securities and Exchange Commission (SEC) typically require a company to submit a registration statement to the SEC for approval?

A

When the company issues new debt or stock securities to the public

157
Q

What is the detailed report that companies file annually with the Securities and Exchange Commission

A

Form 10 K

158
Q

Which form must be filed quarterly by all publically held corporations

A

10 Q

159
Q

Intentional misreprestations in the financial statements is known as

A

Fraud

160
Q

Differences in opinion about what numbers should be reported in the financial statements based on different estimates

A

Disagreements in judgements

161
Q

Unintentional mistakes that can enter the accounting system at the transaction and journal entry stage or when journal entries are posted to accounts

A

Errors

162
Q

The three basic internal control structure categories are

A

The Control Environment
The Accounting Systems
The Control Procedures

163
Q

The five types of control procedures are

A

Segregation of duties
Procedures for authorization
Documents and records
Physical Safeguards
Independent Checks

164
Q

Who registers all public accounting firms

A

Public Company Accounting Oversight Role

165
Q

The PCAOB does what

A

Registers all public accounting firms
Establish auditing standards
Inspect public accounting firms

166
Q

What are the constraints on an auditor’s roles

A

Prohibited from providing non audit services to audit clients
Audit partners must rotate every five years
Auditors must report to the audit committee of the board of directors

167
Q

What are the constraints on management in the auditing process

A

CEO and CFO must personally certify the reliability of the financial statements
Companies must have a code of ethics
Loans to company executives are prohibited
Audit committees must be strengthened

168
Q

Role of Internal Auditors

A

Evaluate internal controls
Monitor operating results
Ensure compliance with laws and company policies
Detect fraud

169
Q

Role of External Auditors

A

Gather evidence to be able to certify the fairness of the financial statements through interviews, observations, sampling, confirmation, analytical procedures
External audits are required of most public companies by the SEC
External audits must be performed by CPAs who are licensed by the individual states in which they practice

170
Q

Unique competitive tool
Both financial and nonfinancial data
Usually kept secret within the company
Used for internal planning, control, and evaluation

A

Management Accounting

171
Q

Uniform across companies (GAAP)
Restricted to financial data
Data often made public
USed primarily by investors and creditors in deciding whether to provide capital to the company

A

Financial Accounting

172
Q

The process of making decisions about future operations is called

A

Planning

173
Q

The systematic planning for long-term investments in operating assets

A

Capital Budgeting

174
Q

The primary internal users of accounting information are

A

Managers

175
Q

Who generally has the widest variety of decisions to make

A

Managers

176
Q

The control of operations does not involve

A

analyzing results

177
Q

Identifying problems and opportunities is a product of which process

A

Evaluating

178
Q

Long-run planning involves which process

A

Capital Budgeting

179
Q

Broad, long-range planning is

A

Strategic Planning

180
Q

Management accounting is established by whom

A

Individual companies

181
Q

Which management function implements management plans and identifies how plans compare with actual performance

A

Controlling

182
Q

The first step in management planning is

A

Defining the Problem

183
Q

What is usually conducted by executive level management

A

Strategic Planning

184
Q

A cost that doesn’t change based on changes in the level of sales or production

A

Fixed Cost

185
Q

A cost that changes directly with changes in the level of sales or production

A

Variable cost

186
Q

A cost incurred as part of the production process

A

Product Cost

187
Q

A cost incurred outside the faculty or production facility

A

Period Cost

188
Q

A cost that is created by a particular product or segment that is being analyzed

A

Direct Cost

189
Q

A cost that is assigned to a particular product or segment bu that is not actually caused by that product or segment

A

Indirect Cost

190
Q

A past cost that cannot be changed by any decision made now

A

Sunk Cost

191
Q

A future cost that can be changed by a decision made now

A

Differential cost

192
Q

The benefits not received because of actions not taken

A

Opportunity Cost

193
Q

Cost that involves the outlay of case or the use of some other asset

A

Out of Pocket Cost

194
Q

All factory costs that are not direct materials or direct labor (e.g. supervisor salaries, factory building depreciation, etc)

A

Manufacturing overhead

195
Q

The cost of the wages of the workers who are assembling the direct materials into the finished product

A

Direct Labor

196
Q

The cost of the primary raw materials used in production

A

Direct materials

197
Q

What are the ethical guidelines of the Institute of Management Accountants?

A

Not disclose confidential information
Maintain objectivity when communicating information to decision makers
Act with both actual and apparent integrity in all situations

198
Q

The top accountant in most large organizations is usually called the

A

Controller

199
Q

The first step a business professional should take when confronted with a situation that may involve an ethical conflict is

A

Contact immediate supervisor

200
Q

Activity-based costing is most useful when there are variations in

A

Production volume
Size of Products
Complexity of products

201
Q

Which method for allocating manufacturing overhead costs is usually more accurate

A

Activity based costing

202
Q

Activity based costing differs from traditional product costing in the allocation of

A

Manufacturing overhead costs

203
Q

The allocation of which of the following can cause the greatest errors when computing product costs

A

Manufacturing Overhead

204
Q

Tracing overhead costs to activities involves dividing overhead costs into

A

Cost Pools

205
Q

If activity-based costing is used, property taxes would be classified as a

A

Facility support activity

206
Q

Storage in warehouse would not be considered a

A

Batch activity

207
Q

For greater accuracy when using the ABC method, management accountants should

A

Have a reasonable number of cost pools

208
Q

If ABC costing is used, assembly would be classified as

A

Unit-level activity

209
Q

When using ABC method, the cost associated with producing each batch is an example of

A

Cost pool

210
Q

An activity that affects a particular cost is a

A

Cost driver

211
Q

Machine setups is an example of a

A

cost driver

212
Q

With ABC method, overhead costs are assigned using

A

Cost drivers

213
Q

The traditional overhead cost allocation system assumes a simple relationship between overall over head and

A

a single measure of activiy

214
Q

The five steps in implementing and using an ABC system are

A

Identify overhead cost activities
Analyze individual overhead costs in terms of those cost activities
Identify measurable cost drivers
Assign Overhead
Use the ABC data to make decisions

215
Q

Activities that take place each time a unit is produced

A

Unit level

216
Q

Activities that take place in order to support a batch or production run, regardless of the size of the batch

A

Batch level

217
Q

Activities that take place in order to support a product line regardless of the number of batches or individual units actually produced

A

Product Line

218
Q

Activities necessary to have a production facility in place

A

Facility support

219
Q

Two characteristics of a good management accounting measure are that it

A

Reflects economic reality
Motivates correct behavior

220
Q

Number of units sold
Selling Price per Unit
Mix of items sold

A

Sales Revenue

221
Q

Number of units sold
Variable cost per unit
Mix of items sold

A

Variable cost

222
Q

Management choice of the level of these; does not depend on the number of units sold

A

Fixed Costs

223
Q

Sales revenue - Variable cost - Fixed cost

A

Profit

C213 - Accounting (13 decks)

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