Accounting and the Four Basic Accounting Statements Accounting is a body of principles and conventions as well as established general process for capturing financial information related to an entity’s resources and their use in meeting the entity’s goals (Kaliski‚ 2007). It is essential for companies to have educated and trained accountants to analyze and maintain their financial information. Accountants use four different types of financial statements to accomplish this. The purpose of accounting
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Benefits of a Cost Accounting Information System By kmoney4islam. Cost accounting offers benefits for manufacturing companies. A cost accounting information system offers benefits for many companies. Cost accounting is a type of accounting method concerned with the cost of goods manufactured and /or sold. Many factors are taken into consideration when cost accountants analyze business costs . The information determined by these accountants is used for inventory valuation ‚ financial statements
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CHAPTER 1 INTRODUCTION TO COST ACCOUNTING QUESTIONS 1. Management accounting stresses the informational needs of internal users over those of external users (the focus of financial accounting). Because of this perspective‚ management accounting provides information in a format that is flexible and relevant to a particular manager‟s usage. Financial accounting‚ on the other hand‚ must provide some uniformity in the manner in which information is presented for it to be comparable among companies and
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Criticism on historical cost accounting 1. Inability to provide useful information in times of rising prices * Assumes that money holds a constant purchasing power‚ so the result become irrelevance in times of rising prices * Received much criticism during high inflation periods of 1970s and 1980s. * Obvious flaw in time of rising prices. 2. Real problem of additivity * Some countries allowed revaluation of non-current assets and the different assets are revaluing
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only variable manufacturing costs. Answer: False Difficulty: 1 Objective: 1 Terms to Learn: absorption costing Absorption costing “absorbs” all manufacturing costs‚ both fixed and variable. 2. Variable costing includes all variable costs — both manufacturing and nonmanufacturing — in inventory. Answer: False Difficulty: 1 Objective: 1 Terms to Learn: variable costing Variable costing includes only manufacturing variable costs in inventory. 3. Under both
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Cost Accounting - Chapter 1 1. Flexibility is said to be the hallmark of modern management accounting‚ whereas standardization and consistency describe financial accounting. Explain why the focus of those two accounting systems differs. Financial accounting is more about the bigger picture—it evaluates the finances of the organization as a whole‚ using historical‚ quantitative‚ monetary‚ and factual data. It is more formal and requires the use of GAAP. The information financial accounting
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GUILLERMO VAJDA COST ACCOUNTING ASSIGNEMENT 3 CHAPTER 5 Exercises 5-29‚ 5-42‚ 5-44‚ 5-46‚ 5-50‚ and Problem 5-56 5-29 Al’s Speedy Gourmet‚ a small hamburger shop‚ has identify the following resources used in its operations. Each customer order is a batch. 1 Classify its costs as unit-level‚ batch level‚ product level or facilities level costs. 2 Suggest a proper driver for each item. Bread. Unit-level. Hamburger Hourly help- facilities level. Labor Store rent – Facility-level. Ground beef
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INTRODUCTION Realised-profit‚ matching-based‚ historical cost accruals accounting (HCA) has for over fifty years been repeatedly challenged as being an inadequate basis for the measurement of "income" which reports increments in the value of businesses. Such challenges continue unabated and are made by both accounting standards regulators and by academic commentators. Despite its obvious deficiencies for measuring valuation based income‚ and subject to concept of prudence‚ internationally HCA remains
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CAPACITY ANALYSIS 9-1 No. Differences in operating income between variable costing and absorption costing are due to accounting for fixed manufacturing costs. Under variable costing only variable manufacturing costs are included as inventoriable costs. Under absorption costing both variable and fixed manufacturing costs are included as inventoriable costs. Fixed marketing and distribution costs are not accounted for differently under variable costing and absorption costing. 9-2 The term direct costing
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Health Care Cost Accounting A capitation payment arrangement can be an effective means to control healthcare costs because it allows both the insurer and the employer to predict costs for healthcare services more accurately. When a capitation payment method is used‚ the financial risk of caring for the patient is transferred to the medical delivery system. If the healthcare delivery system does not have a cost accounting system or the ability to develop cost information on each payer and service
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