Managerial Accounting: Chapter Three: Joborder Costing

Ruling – a single line drawn under a column of figures to signify that the entries above the rule are to be added or subtracted; a double rule under an amount signifies a total.
stable monetary unit assumption – states accounting information should be measured and reported in the national monetary unit without any adjustment for changes in purchasing power
Non-current Assets (3 types) – ° Investment assets
° Property, Plant and Equipment
° Intangible assets
Accounting – Information system that identifies, records, and communicates the economic events of an organization to interested users
resources owned by the business – assets
Actual (rather than allocated) manufacturing overhead costs are included in the:
a. Work-in-Process Control account
b. Finished Goods Control account
c. Manufacturing Overhead Control account
d. Both a and b are correct. – c. Manufacturing Overhead Control account
notes to the financial statements – notes clarify information presented in the financial statements and provide additional detail
Fair Value Principle GAAP – based principle that calls for the use of fair value measurements in the financial statements. Pg.58
According to The Sarbanes-Oxley Act of 2002, the audit committee of the board of directors is directly responsible for
balance ledger form – balance due of that account will always appear
Dropping a Product Line Formula – – Total contribution margin lost if discontinued (sales less all variable costs)
+ Total fixed costs avoided if discontinue
= Total change to operating income
Balance Sheet – Lists all assets, liabilities, and OE
Sarbanes-Oxley Act – Requires companies to review internal controls and take responsibility for the accuracy and completeness of their financial reports
98. Constraints on qualitative characteristics of accounting information include:
A. Freedom from material error.
B. Going concern.
C. Neutrality.
D. Cost effectiveness. – D. Cost effectiveness.
accounts receivable – Right to receive money from a customer,in the future, as the result of a sale
Fundamental Characteristics – Relevance, Faithful representation
Accоrding tо The Sаrbаnes-Oxley Act оf 2002, the аudit committee of the board of directors is directly responsible for
profit and loss account – Gewinn & Verlust
Reissuing Treasury Stock for Employee Compensation Transaction – Expenses are increased, treasury stock is decreased and additional paid-in capital is either increased or decreased for the difference
appreciation (capital gain) – financial income, income

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