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33 Cards in this Set
- Front
- Back
Accounting System |
is the major quantitative information system in almost every organizations. |
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True |
t/f
Accounting system provides information for:
Internal Reporting to managers, for use in (1) planning and controlling operations. (2) formulating plans and policies and (3) External Reporting to stockholders, government and other outside parties. |
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Management Accounting |
internal reporting is known as? |
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Financial Accounting |
External Reporting is known as ____________ because it is principally concerned with the historical and stewardship aspects of accounting. |
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Cost Accounting |
______________'s third purpose deals with costing of products for inventory valuation and income determination. It therefore fulfill demands of outsiders and those of management for such information. |
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True |
t/f
Cost Accounting is management accounting, plus a small part of financial accounting to the extent that its product costing function satisfies the needs of external reporting. Cost Accounting is one of the most valuable management tools to control operations. |
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Cost Accounting |
is a system that records, summarizes, analyzes, and interprets the details of the costs of materials, labor, and overhead necessary to produce and sell an article. refers to the gathering and providing of information for decision needs of all sorts, ranging from the management of recurring information to the making of strategic decision and the formulation of major orhanizational policies. refers to recording, classifying, and reporting all costs aspects of company performance during a particular period of time. |
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Budget |
is the overall financial plan for future activities. |
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Standard Cost procedures |
are helpful in evaluating the results of the operations. |
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Unit Costs |
are projected on the basis of standard conditions. These standards are often based on the past experience of the firm or on statistics from the industry. |
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Manufacturing |
is the process of converting materials into finished goods by using labor and incurring other costs, generally called manufacturing overhead. |
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Overhead Costs |
include utilities, supplies, taxes, insurance, and depreciation. |
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True |
t/f one of the function of a cost accounting system is to clasify and record all costs according to category. |
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Direct Materials Direct Labor Manufacturing Overhead |
the 3 major manufacturing cost classifications are: and is a basis of accounting procedures. |
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Direct Materials |
also called raw materials, are those materials used in the manufacturing process that become a significant part of the finished goods. |
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Direct Labor |
The employees who work directly with the raw materials in converting them into finished goods represents ___________. |
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Manufacturing Overhead |
All costs incurred in the factory that cannot be considered direct materials or direct labor are classified as ___________. also called as factory overhead, manufacturing expenses or factory burden. |
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indirect materials indirect labor other manufacturing overhead |
Manufacturing Overhead is subdivided into 3 categories: |
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Indirect Materials |
materials that are used in small amounts in the manufacturing process or that cannot easily be traced to specific product are called? example: glue or thread. |
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Factory Supplies or Operating Supplies |
another type of indirect materials is called __________ is consists of items that are used in the manufacturing process but do not become a part of the finished goods. example: cleaning supplies in the factory. |
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Indirect Labor |
the wages of factory personnel who do not work directly on raw materials are called ___________. example: salaries of janitor, etc. |
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Other Manufacturing Overhead |
includes such costs as payroll taxes on factory wages, rent, depreciation, taxes, and insurance on factory buildings and machinery; heat, light, and power, repairs and maintenance of machinery and equipment. is a growing part of the total cost of production because of the increasing use of labor-saving equipment such as computers and robots in many manufacturing process. |
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Prime Cost |
the sum of direct materials and direct labor is ___________. reflects the primary sources of costs for units of production. |
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Conversion Cost |
the total of direct labor and manufacturing overhead is called ___________. indicates the cost required to convert the raw materials into finished products. |
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Raw Materials Inventory Work in Process Inventory Finished Goods Inventory |
manufacturing company has 3 distinct inventory accounts called: |
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Raw Materials Inventory |
reflects the cost of raw materials and factory supplies that will be used in the manufacturing process. |
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Work in Process Inventory account |
reflects the cost of raw materials, direct labor and manufacturing overhead of goods on which manufacturing has begun but has not been completed at the end of the fiscal period. |
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Finished Goods Inventory account |
reflect the cost of goods that have been completed and are ready for use. This account corresponds to the Merchandise Inventory account of a merchandising business. |
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True |
t/f
The basic objective of cost accounting is the determination or accumulation of a product's cost for inventory valuation and income determination. |
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Actual Cost System (Historical) |
Systems of Cost Accumulation: |
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Actual Cost System (Historical) |
Under this system, direct materials, direct labor and factory overhead costs are determined as they occur simultaneously with the manufacturing operation but the total of these costs is known only after the operation has been completed. collects the actual amounts of direct materials, direct labor and manufacturing overhead that are incurred for each product. |
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Standard Costs System (Predetermined) |
under this sytem, costs are determined in advance from analysis and forecasts made before the actual production begins. under this system, standard unit costs are computed for direct materials, direct labor and factory overhead; these amounts, rather than the actual cost, are carried to FG Inventory. |
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Normal Cost System |
This system is a combination of the actual cost system and the standard cost system. This system accumulates only the actual amounts of direct materials and direct labor costs. Factory Overhead are accumulated on the basis of a predetermined rate. |