Accounting for decision makers C213 WGU Updated Version Graded A+ "Break even analysis" - Answer Cost Volume profit analysis (CVP)
"the line" is income from continuing operations. Reported "net of taxes" - Answer Below the line items
- paid in capital, 2 retained earnings, 3 treasure stock, 4 accumulated other comprehensive
income. - Answer Owners Equity
- Identify overhead cost. 2. Analyze individual overhead costs in terms of cost activities COST
POOLS. 3. Identify measurable cost drivers (numerical # such as gallons). 4. Assign overhead. 5.Use the ABC date to make decisions - Answer 5 steps in the activity based costing (ABC)
- Invoice by invoice, detail categorization. 2. Scattergraph method, a visual approach. 3. high-
low method, a computational approach. - Answer 3 approaches to do the CVP:
- Prepare 2. Analyze 3. Gather 4. Make decisions 5. Implement 6. Observe. - Answer
Accounting steps.
- steps of ABC system - Answer Identify overhead cost activities, analyze individual overhead
costs in terms of those cost activities, identify measurable cost drivers, assign overhead, and use the cost data to make decisions
A common-size balance sheet is often prepared using total ? - Answer assets to standardize each amount instead of using total sales, in which case the asset percentages are a good indication of the company's asset mix.
A company's asset mix is strongly influence by - Answer the companies industry
A company's asset mix is: - Answer the proportion of total assets in each asset category and is largely determined by the industry in which the company operates. Financing mix is the result of management decisions.
A company's break-even point would change if there were an increase in: - Answer Total fixed costs due to a plant addition
A company's internal control structure can be divided into five basic categories - Answer The control environment Risk assessment Control activities Information and communication Monitoring
- / 4
A cost incurred outside the factory or production facility. These costs are reported as an expense
in the period in which they are incurred. - Answer Period costs:
A cost that changes directly with changes in the level of sales or production. Examples are materials costs and sales commissions. - Answer Variable costs
A cost that doesn't change based on changes in the level of sales or production. Examples are building rent and executive salaries. - Answer Fixed costs
A future cost that can be changed by a decision made now. An example is monthly rent for an
apartment. - Answer Differenital costs:
A measure of a company's performance that includes all items that are expected to continue into the future is - Answer income from continuing operations
A measure of a company's performance that is intended to summarize in one number the overall economic performance of a company in a given period is - - Answer Net income
A measure of rise - Answer Operating leverage is=
A more accurate allocation of manufacturing overhead and product costing can take place when
costs are assigned on the basis of: - Answer Cost drivers
A past cost that cannot be changed by any decision made now. An example would be last
month's paid rent. - Answer Sunk Costs:
A system for providing quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions. - Answer Definition of
accounting:
ABC assume that: - Answer Activities that consume overhead cost
According to Sarbanes-Oxley, which services is an accounting firm permitted to provide to its audit client? - Answer Opinions about the reliability of internal controls
According to U.S. law, companies selling stock to the public must provide potential investors with? - Answer Financial statements
Accounting equation - Answer Assets=liabilities+equity
Accounts payable - Answer Money the company owes to pay its creditors. (this will be an addition +, b/c you owe this amount, but still have it)
Accounts payable, accounts receivable, and inventory - Answer Typical cash budgeting
accounts that are allocated:
- / 4
Accounts payable, accured liabilities, short term loans payable, current portion of long term debt, unearned revenue. - Answer Examples of current liabilities
Accounts receivable - Answer Money owed to the company for goods and services (this will be a subtraction -, b/c people owe it to you, but you do not have it).
ACTIVITIES consume overhead costs - Answer ABC system assumes that:
Activity cost pools. - Answer Activity Based Costing ABC utilizes direct costs like traditional
costing, but breaks down the overhead costs into pieces called:
ADD - Answer If current liabilities are up you
ADD (preserves cash) - Answer If current assets are down you
Add the decrease - Answer Account: Current Asset. Direction of change: Decrease. Necessary
adjustment:...
Add the increase - Answer Account: current liability. Direction of change: increase. Necessary
adjustment:...
Adudit - Answer A financial statement that furthermore decreases uncertainty.
AIPCA: American INSTITUTE of certified public accountants. - Answer What sets auditory standards, continue education credits, CPA exam, and is the code of professional conduct?
All factory costs that are not direct materials or direct labor. Examples are factory supervisor salaries, factory building depreciation, and miscellaneous indirect materials such as glue or
screws. - Answer Manufacturing overhead:
Allows a company to anticipate financing needs - Answer What is the benefit of a cash budget for a company
Always at the bottom of the income statement. Net income/outstanding number of shares of
stock - Answer EPS: Earnings per share
Amount of cash generated or liabilities satisfied through doing business. Revenues = increase $ - Answer Revenues
Amount to buy the company - Answer What is market value of equity?
an operating cost. Ex: Collection on account, paid for investors, paid investor on debt, paid miscellaneous expense, paid income tax...these are operating, NOT financial as one would assume - Answer By definition, anything that is an expense is...
- / 4
Analysis of financial statement numbers can be used to diagnose existing problems and - Answer To forecast how a company will perform in the future.
Analysis of financial statements can be misleading if statements are not - Answer comparable or if statements exclude significant information. In addition, analysis of historical data may distract one's attention from relevant current information.
Analyze results, provide feedback, reward performance, identify problems - Answer Evaluating
Any factor, usually some measure of activity, that causes cost to be incurrent. Examples are labor hours, machine hours, or some other measure of activity who's change causes corresponding
changes in the cost object. - Answer Cost Driver:
AOCI: Accumulated other comprehensive income.Market related gains and losses that are not included on the income statement. - Answer MARKET EVENTS that result in an increase or
decrease in equity are:
Articulation - Answer Details. All three financial statements are not isolated but rather an integrated set of reports on a companies financial status.
As compared to a company with a low operating leverage, a company with a high operating
leverage will: - Answer Have a larger loss below the breakeven point
Aspects of management accounting that deal with issues as what additional major resources (PPE) are needed to meet a companies long run goals - Answer Capital Budgeting
asset (capital equipment). - Answer When a company purchases equipment, it exchanges one asset (cash) for another...
Asset Turnover - Answer Sales/total assets. A measure of a companies efficiency. This number can be understated and can be misleading. IT is the number of dollars in sales generated by each dollar of asset.
Asset turnover. It is the number of dollars in sales generated by each dollar of assets. - Answer Efficiency
Assets (resoures) - Answer Resources owned or controlled by a company that will provide probable future economic benefit.
Assets mix - Answer the proportion of assets in each asset category.
Assets up=Cash down. Liabilities up=Cash up - Answer On the statement of cash flows, if Assets go up, cash goes?If Liabilities go up, cash goes?
- / 4