Wednesday, December 31, 2008
Links related to indirect materials and managerial accounting:
Calculate Manufacturing Overhead
Job Order Costing
Manufacturing Company Accounting
Tuesday, December 30, 2008
The perpetual inventory system is more expensive and complex but it gives managers several main advantages:
- A higher degree of control over inventory in the company's possession
- Helps purchasing agents to order replacement merchandise in a more timely fashion
- Detects and deters employee theft
- Identifies other problems related to inventory quickly
Monday, December 29, 2008
Revenues $ 43,000
Common stock 85,000
Total liabilities 54,000
What is the amount of their total assets?
Sunday, December 28, 2008
Invoice cost, terms 1/10 n 30, fob shipping point $55,000
(Payment is made within discount period)
Shipping costs 1,000
Installation costs 1,500
First year utility costs 2,000
What cost should Bears use as a basis for depreciation?
Saturday, December 27, 2008
Some examples include two departments or divisions selling to each other. Transfer prices are needed for performance evaluation purposes and accounting records. The selling unit gets credit for the transfer price and the buying unit/department must deduct the transfer price as an expense of doing business.
Transfer prices in international can be regulated and manipulated to save money with international subsidiaries.
Friday, December 26, 2008
Examples of operating segments include departments, operations, sales territories, divisions, product lines, and sales departments
Thursday, December 25, 2008
Activity-based costing differs from traditional costing systems in three main different ways:
- In activity-based costing (ABC), non-manufacturing and manufacturing costs may be assigned to products produced by a firm.
- Some manufacturing costs may be excluded from product costs using activity-based costing (ABC) that are included with traditional costing methods.
- An activity-based costing (ABC) system will usually include a number of activity cost pools determined by the company, each of these cost pools has a unique measure of activity. These measures of activity can differ from the allocation bases that are normally used in traditional costing systems.
- The activity rates are different from typical predetermined overhead rates because they should be based on activity at actual capacity rather than depending on a more inaccurate budgeted levels of activity.
Wednesday, December 24, 2008
It is required of the business because the company has pledged assets to cover a specific liability, therefore if the business dishonors its obligations to pay the loan, the creditor has legal rights to the amount of receivables identified in the assets pledged as collateral to cover the loan.
This type of financing must be disclosed to satisfy the full-disclosure principle which informs shareholders.
Tuesday, December 23, 2008
Number of units produced
Number of hours
Number of miles flow
Number of rooms occupied
Number of rubber used
Number of members
Monday, December 22, 2008
Straight-Line Depreciation Expense Method:
Straight-Line depreciation Expense = (Asset Cost- Salvage Value)/ Useful Life
Accumulated Depreciation Balance Sheet
Depreciation of an Asset and Book Value
Four types of adjusting entries:
- converting liabilities to revenue
- converting assets to expenses
- accruing unpaid expenses
- accruing uncollected revenues
Saturday, December 20, 2008
A. Assets will be overstated and equity will be overstated.
B. Assets will be understated and equity will be unaffected.
C. Assets will be overstated and liabilities will be understated.
D. Assets will be understated and equity will be understated.
The following is a list of the steps to follow in the accounting cycle.
- Start Accounting Cycle
- Analyze Accounting Transactions
- Post Accounting Transactions
- Prepare unadjusted trial balance
- Prepare adjusted trial balance
- Prepare financial statements
- Prepare post-closing trial balance
- Repeat Accounting Cycle
The accounting cycle is the method accountants use to keep track of the financial situation of a company. The financial reports will be correct and accurate if the accounts have been analyzed correctly, events have been posted correctly and the accounting equation remains balanced.
Overall, the most important result of completing the accounting cycle is the production of financial statements.
Wednesday, December 10, 2008
- Liquidity ratios show financial managers how readily the firm’s assets can be converted to cash to pay liabilities.
- Debt ratios show the firm’s ability to pay long-term financial obligations such as bonds.
- Return ratios demonstrate how much return the firm is generating relative to the value of its book assets.
- Coverage ratios estimate the ability of the firm to pay the interest expenses on money it has borrowed from creditors
- Operating ratios demonstrate how efficient the operation of the firm is
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