Stack #2526741 Word Scramble

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Question	Answer
Which of the following is not a right or preference associated with preferred stock?	the right to vote
The Nice corporation issue 8,000 shares of 100 par value preferred stock for cash at 110 per share. The try to record the transaction will consist of a debit to cash for 880000 and a credit to	Preferred stock for 800 thousand and Paid in capital in excess of par value-Prefereed Stock 80 thousand
Venco corporation has outstanding 7,500 shares and 8% preferred stock at $20, Venco declared and paid 38 thousand cash dividend on December 15, 2010. If the company's dividend in arrears prior to that date were 9 thousand , common stockholders received:	17 thousand. 08% x 20.00(1.60) x 7500=1200. Therefore 38,000-9,000-12,000=17,000
Andrew paid 45 thousand to buy back 9 thousands shares of its $1 par value commom stock. This stock was sold later at $6 per share. The entry to record the sale includes a	credit to paid in capital from treasury stock for 9,000.You debit cash on the sales and credit 9000
dividends are declared out of	retained earnings.
Stockholders of a corporation directly elect	the board of directors.
Dailey publicly traded for $13 per shares. Company issued 2,800 shares of stock to acquire land recently advertised fir 46,680. When recording this transaction, it will:	Debit land for 36,400. Land is an asset= this transaction increases assets.
Which of the following factors does not affect the initial market price of a stock?	The par value of the stock (The par values is what the company uses for measurement .
Preferred stockholders have a priority over common stockholders as to	Both dividends and assets inhe event of a liquidation.
When preferred stock is cumulative, preferred dividends not declared in a period are	called dividends in arrears
which of the following would not be considered advantage of the corporate from of organization?	Government regulations
Ed Tesh has invested 400 thousand in a privately held family corporation. The corporation does not do well and must declare bankruptcy. What amount does Tesh stand to loose?	Up to his total investment of 400 thousand
The acquisition of treasury stock by a corporation	Decreases its total assets and total stockholders equity. (yes, it pays out assets to get stock)
Treasury stock is	A corporation owns stock which is reacquired but not retired.
**16-Barr company acquires 60, 10%,5 yr, 1,000 community bonds on January 1 2010 f 61,250. Includes a brokerage commission. If Barr sells its community bond for 62,500 and pays 1,500 in brokerage commissions, what gain or loss is recognized.	Gain of 2,500
December 31, 2010, the trading securities for Mayfair are as follow. X cost 90,000 fair value 92,000. Y cost 150,000 and fair value 140,000, Z cost 32,000 and fair value 28,000. Mayfair should report the following amount to securities in its income stamt	12,000 unrealized loss
The balance sheet presentation of an unrealized loss on an available for sale is similar to the statement presentation of :	Treasury stock.
Dobson earns 450,000 and pays cash dividend of 150,000. Corwell Corp. owns 70,000 of the 210,000 outstanding shares of Dobson. What amount show Cornwell show in the investment account at Dec 31, 2010 if the beginning of the year balance was 40,000	140,000. ??
For accounting purposes, the method used to account for long term investment in common stock is determined by:	the extent of an investor influence on the operating and financial affairs of the investee.
On January 1 2010, Milton purchased at face value a $1,000, 6% bond that pays interest on January and July1. Milton company has a calendar year end. The adjusting entry on December 31, 2010 is:	Debit Receivable 30, credit Interest revenue
Cost and fair value data for the trading securities of Cliford Company at Dec 31 2010 are 100,000 and 74,000 respectively. Which of the following correctly represents the adjusting journal entry to record the securities at fair value?	Dec 31, Unrealized loss-income 26,000, Credit market adjustment 26,000
Corporations invest in other companies for all of the following reasons except to	Increase trading of the other companies stock.
When a company own more than 50% of the common stock of another company:	Consolidated financial statements are prepared.
Which of the following would not be considered a motive for making a stock investment in another corporation?	An increase in the amount of interest revenue from the stock investment.
In the balance sheet, the account, Premium on Bonds payable is:	Added to bond payable.
The party who has the right to exercise a call option on bonds is the :	issuer
Bonds that may be exchanged for common stock at the options of the bondholders are	Convertible bonds
If bonds are originally sold at a discount using the straight line amortization method:	amortized discount is subtracted from the face value of the bond to determine its carrying value.
The statement that "Bond prices vary inversely with changes in the market rate"	Market interest rate decreases, then bond prices will go up.
Gomez corporation issues 1,000, 10 year, 10%, 1000 bond dated January 1 2010, at 97%. The journal entry to record the issuance will show a	Debit to cash for 970,000. 1000x1,0000=1,000,000 x97%=970,000, therefore debit cash 970,000, debit discount 30,000, credit Bond payables for 1,000,000
The times interest earned ratio is computed by dividing:	Income before income taxes and interest expenses by interest expense
The present value of a bond is also known as its	Market price
If the present value of lease payments equals or exceeds 90% of the fair market value of the leased property, the	Conditions are met for the lease to be considered a capital lease.
Which of the following is not a conditions under which the lessee must record the lease of an asset.	The lease term is equal to 60% of the economic life of the lease property.
The lessee has substantially all of the benefits and risks of ownership in a	capital lease.(A capital lease is a lease in which the lessor only finances the leased asset, and all other rights of ownership transfer to the lessee.)
The market value(present value) of a bond is a function of all of the following except	A market rate of interest
a mortgage n/p with a fix % requires the borrower to male inst. pymt over the term of the loan. Each installment pymt incl. % of the unpd. bal. of the loan and pymt on pricipal. indicate effect on portion allocated to % & portion allocated to principal.	Portion allocated to interest DECREASES Portion allocated to payment INCREASES
A corp.issues 200,000,8%,5 yr bond for 181,200. Interest is paid semiannually. Using straight-line method of amortization on bond discount, the amount of bond % expense to be recognized.	9,880(200,000-181,200=18,800. 18,800. 18,800/60= 313.33. 313.346= 1880. 200,0008%/2 = 8000+1880 =9880
**14- the effect of the declaration of a cash dividend by the board of directors is to	increase liabilities and decrease stock equity.
Which of the following show the proper effect of a stock split and a stock dividend?	Item/Par value. Stock Split/decrease Stock dividend/ no change
which one of the following is not necessary in order for a corporation to pay a cash dividend?	Approval of stockholders
When stock dividends are distributed	Common Stock dividends distributed is decreased.
Outstanding stock of the Abel corp. included 22,000 shares of $3 par common stock and 8000 shares of 7%, $20 par noncumulative pref/stock. 2009,Abel pd dividends of $8,000. 2010 dividend was distributed to preferred shareholders.	11,200 (2007%=1.40. 1,408000=11200.
on the dividend record date,	no entry is required.
Sun inc, has 6,000 shares of 4%, $80 par value,cumulative preferred stock and 40,000 shares $4 par value common stock outstanding dec 31 2008. what is the annual dividend on the preferred stock?	19,200 (6000.04%=240. 24080= 19,200
Lopez has 4000 share of 3% $100 p. value, cum. pref. stock and 60,000 shares $4 p.common stock outstanding. The board of directors declared and pd 7,200 dividend 2009, in 2010, $42,000 of div. declared & pd. What are the div. recd. by the pref&com sho
A prior period adjustment that corrects income of a prior period requires that an entry be made to	retained earnings account
The date on which a cash dividend becomes a binding legal obligation is on the	Declaration date.
which of the following statements about dividends is not accurate?	The board of directors is obligated to declare dividends
if a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is	Retained earnings.
Indicate the respective effects of the declaration of a cash dividend on the following balance sheet sections:	total assets/ no change. total liabilities/increase total stockholders equity/decrease
Identify the effect the declaration and distribution of a stock dividend has on the par value per share.	No effect
A stockholder who receives a stock dividend would	own more shares of stock.
****Significant noncash transactions would not include	Treasury stock acquisition
the statement of cash flows will not provide insight into	The exact proceeds of a future bond issue
Bongo Company reports a 25,000 increase in inventory and a 10,000 decrease in a/p during the year. COGS for the year was 180,000. Using the direct method of reporting cash flows from operating activities, cash payment made to suppliers were	215,000(25,000+10,000+180,000= 215,000) decrease in a/r +increase in inventory +
if COGS for the year is 210,000, the amount of cash paid to suppliers is	175,000(EOF inventory 27,000 BOY 42,000 -15,000 A/P EOY 32,000, BOY 12,000 +20,000 inv decrease 15,000 =- a/p increase=- 210,000-15,000-20,000=175,000
Free cash flows equals cash provided by	Operations less capital expenditures and cash dividends
the statement of cash flow	Is prepared from a comparative statement
The acquisitions of land by issuing common stock is	a noncash transactions and would be reported inthe body of a statement of cash flows.
Dino company reported net income of 72,000 for the year. During the year, a/r increased by $7000, a/p decreased by 3000 and depreciation expense of 5000. Net provided by operating activities for the year is	67,000 (a/r increase=decrease, depreciation gets +, a/p decrease= stays decrease. 72,000+5000-7000-3000=67000
Financing activities involve	issuing a debt
The primary purpose of the statement of cash flow is to	provide information about cash receipts and cash payments during a period.
the following data are available for Nemo corporation Sale of land 250,000, sale of equipment 125,000, issuance of common stock 140,000, purchase of equipment 60,000,payment of cash dividend 120,000. Provide net cash provided by investing activities	315,000 250,000+125,000+60,000
Indicate where the event paid income taxes would appear, if at all on the statement of cash flow	Operating activities section.
Investing activities include	collecting cash made on loans
*19- managerial accounting reports can be described as	special purpose
Manufacturing cost that cant not be classified as neither direct materials or direct labor are known as	manufacturing overhead
A manufacturing process requires small amount of glue. The glue used in the production process is classified as an	indirect materials
Which one of the following represents a period cost?	The VP of sales salary and benefits
The sum of the direct materials cost, direct labor cost and manufacturing overhead incurred is the	total manufacturing cost
the major reporting standard for presenting managerial accounting information is	relevance
the principle difference between a merchandising and manufacturing income statement is the	COGS section
Property taxes on a manufacturing plant are an element of a	Product cost/yes period cost/no
Product cost consist of	direct materials, direct labor only
Planning is a function that involves	Setting goals and objectives for an entity
Barton com has beginning work in process inventory of 144,000 and total manufacturing cost of 636,000. If cost of goods is 640,000, what is the cost of the ending working process inventory	cog manufacturing 640,000-total cost goods manufactured 636,000=4000-wip 144,000=140,000
which of the following is not manufacturing cost category	COGS
12Partnership agreement	A written contract expressing the voluntary agreement of two or more individuals in a partnership.
Capital deficiency	A debit balance in a partner's capital account after allocation of gain or loss.
General partners	Partners who have unlimited liability for the debts of the firm.
Partnership	An association of two or more persons to carry on as co-owners of a business for profit.
Partners' capital statement	The owners' equity statement for a partnership which shows the changes in each partner's capital account and in total partnership capital during the year.
Limited liability partnership	A partnership of professionals in which partners are given limited liability and the public is protected from malpractice by insurance carried by the partnership.
No capital deficiency	All partners have credit balances after allocation of gain or loss.
Limited partners	Partners whose liability for the debts of the firm is limited to their investment in the firm.
Limited liability company (LLC)	Organization form that combines select features of a corporation and a limited partnership; provides limited liability to its members (owners), is free of business tax, and allows members to actively participate in management
Limited partnership	A partnership in which one or more general partners have unlimited liability and one or more partners have limited liability for the obligations of the firm.
Partnership dissolution	A change in partners due to withdrawal or admission, which does not necessarily terminate the business.
Partnership liquidation	An event that ends both the legal and economic life of a partnership.
Schedule of cash payments	A schedule showing the distribution of cash to the partners in a partnership liquidation.
C corporation	Corporation that does not qualify for nor elect to be treated as a proprietorship or partnership for income tax purposes and therefore is subject to income taxes.
General partner	Partner who assumes unlimited liability for the debts of the partnership; responsible for partnership management.
Mutual agency	Legal relationship among partners whereby each partner is an agent of the partnership and is able to bind the partnership to contracts within the scope of the partnership's business.
Partner return on equity	Partner net income divided by average partner equity for the period.
Accrued Expenses	_________ _________ are costs incurred in a period that are both unpaid and unrecorded.
Useful Life	Straight - line depreciation is figured by subtracting the salvage value from the cost of the asset, and dividing it by its _________ _________.
Place these entries in the correct order for closing entries.	Revenue Accounts - Expense Accounts - Income Summary - Dividends Account
Adjusted Trial Balance	y making adjustments to the trial balance, you then create a(n) _________ _________ _________.
Debit; Credit	To close a revenue account, you _________ the account, and _________ Income Summary.
Retained Earnings	When closing Income Summary, you debit Income Summary, and credit _________ _________.
After	The post-closing trial balance is prepared _________ the closing entries have been posted.
Accruals;	recognize transactions when cash has not been received or paid.
Defferals	recognize transactions after the cash has been received or paid.
Revenues; Expenses	Accounts Receivables are accrued _________.
Unlimited liability	Legal relationship among general partners that makes each of them responsible for partnership debts if the other partners are unable to pay their shares.
Interim	financial statements report activity covering one, three, or six months of activity.
Temporary	A _________ account accumulates data related to one accounting period.
corporation	a business organization authorized by the state and considered a separate legal entity from those who own or run it
par value	an arbitrary amount assigned as a baseline value to each share of stock; legal capital equals the number or shares issued times this.
in excess of par	any additional value (which there always is) above the par value that is assigned to a share of stock
underwriters	people who, during the IPO issue the stock and determine its par value
dividends	selling of a companies assets in order to pay (larger) dividends to shareholders; usually occurs when a company is going out of business
declaration date	the date a company declares that it will be paying dividends and how much it will be paying
record date	the date when whoever is the legal owner of the stock is considered the party to whom dividends are due.
date of payment	the date the the dividend is actually paid out on (dividends payable debited, cash credited)
ex-dividend	stock sold after the record date, and does not come with the promise of that quarters dividends
dividend yield	DY = (total dividends/# of shares issued) /market price per share
return on equity	net income (earnings) compared to stockholder equity
price earnings ratio	P.E.= market price per share/earnings per share
return on equity	he most important ratio; this is net income vs. average stockholders equity (as a percent)
stock option plan	a plan that allows employees to purchase stock at a set price (the fair market value, determined when the option is issued) at any future point within a given period of time (when the actual market value may be much higher)
articles of incorporation	an application required to be filled out with the started to form a corporation, which becomes a contract and allows the corporation to legally do business
share of stock	a unit of ownership in a corporation
dividends	distributions of resources (cash, sometimes stock) to stockholders, as declared by the board of directors of that company
retained earnings	the earnings of the corporation since it began, less it's losses, dividends, and transfers to contributed capital. The money in this account isn't distributed as dividends, but is reinvested in the business
treasury stock	shares that a corporation has issued to the public in the past and has since bought back either to keep, reissue, use for stock option plans, or retire. this is not considered an investment, but reduction in stockholder equity
common stock	the basic form of stock issued (sometimes the only type issued) which carry voting rights. this type of stock has residual equity (they get paid last)
preferred stock	a form of stock that acts more like a bond, is not likely to experience dramatic shifts in price, gives holders of it preference of payment (they are more likely to receive dividends) but does not carry voting rights
authorized shares	the maximum # of shares that a company can issue
issued shares	shares that a company has issued to the public and collected contributed capital (and att'l paid in earnings) on (this includes treasuring stock)
outstanding shares	shared that have been issued and are in circulation
noncumulative preferred stock	stock that carries no obligation to pay dividends missed in previous years
cumulative preferred stock	tock that carried an obligation to pay dividends missed in one year the following year (the debt accrues)
dividends in arrears	dividends that are not paid in the year that they are due, which are not considered a liability, but should be disclosed in the note of the financial statements
convertible preferred stock	stock that can be exchanged for shares of common stock at a ration given in the preferred stock contract (which is often taken advantage of if the market value of common stock increases dramatically)
callable preferred stock	prefer stock that the corporation can redeem or retire at a price stated in the preferred stock contract at any time. as happens, the stockholder recieves a call price (the par value/ call premium) as well as any div. in arrears and the proportion of the
no par stock	capital stock that has no par value (which is arbitrary, anyway)
*15Bond indenture	A legal document that sets forth the terms of the bond issue.
Bond certificate	A legal document that indicates the name of the issuer, the face value of the bonds, the contractual interest rate, and maturity date of the bonds.
Bond	A form of interest-bearing notes payable issued by corporations, universities, and governmental entities.
Callable bonds	Bonds that are subject to redemption (buy back) at a stated dollar amount prior to maturity at the option of the issuer.
Capital lease	A contractual arrangement that transfers substantially all the benefits and risks of ownership to the lessee so that the lease is in effect a purchase of the property.
Contractual interest rate	Rate used to determine the amount of cash interest the borrower pays and the investor receives.
Convertible bonds	Bonds that permit bondholders to convert them into common stock at the bondholders' option.
Unsecured bonds	Bonds issued against the general credit of the borrower. Also called debenture bonds.
Debt to assets ratio	A solvency measure that indicates the percentage of total assets provided by creditors; computed as total liabilities divided by total assets.
Discount (on a bond)	The difference between the face value of a bond and its selling price, when the bond is sold for less than its face value.
Face value	Amount of principal due at the maturity date of the bond.
Long-term liabilities	Obligations expected to be paid more than one year in the future
Market interest rate	The rate investors demand for loaning funds to the corporation.
Maturity date	The date on which the final payment on the bond is due from the bond issuer to the investor.
Mortgage bond	A bond secured by real estate.
Mortgage notes payable	A long-term note secured by a mortgage that pledges title to specific assets as security for a loan.
Operating lease	A contractual arrangement giving the lessee temporary use of the property, with continued ownership of the property by the lessor.
Premium (on a bond)	"The difference between the selling price and the face value of a bond, when the bond is sold for more than its face value. "
Secured bonds	Bonds that have specific assets of the issuer pledged as collateral.
Sinking fund bonds	Bonds secured by specific assets set aside to redeem them.
Time value of money	The relationship between time and money. A dollar received today is worth more than a dollar promised at some time in the future.
The market price of a bond is the	present value of its principal amount at maturity plus the present value of all future interest payments
credit to Interest Payable.	Four-Nine Corporation issued bonds that pay interest every July 1 and January 1. The entry to accrue bond interest at December 31 includes a
Corn Flake Corporation reported net income of $300,000. Interest expense was $40,000 and income taxes were $100,000. Times interest earned was	11 times.times interest earned=Net income+interest expense+income tax expense=300,000+40,000+100,000=440,000/40,000=11 times
16 Which of the following is not a primary reason why corporations invest in debt and equity securities,	Corporations are not required to by law to invest in debt and equity securities.
Debt investments are initially recorder at :	when the debt investment are purchased, they are recorded at cost XX
Hanes Company sells debt investments costing $26,000 for $28,000. In journalizing the sale, credits are to:	ans-Credits are made to debt investments $26,000 and gain on sale of Debt investment $2,000(28,000-2,6000)
Prior Company receives net proceeds of $42,000 on the sale of stock investment net cost $39,500.This transaction will result in reporting in the income statement a:	ans- Because the cash received (42,000) is greater then the cost (39,500), this sale results in a gain not a loss, which will be reported under "other revenues and gains" in the income statement.
5- The equity method of accounting for long term investment in stock should be used when the investor has significant influence over an investee and owns.	ans- The equity method is used when the investor can exercise significant influence and owns between 20&50% of the investee common stock.
You have a controlling interest if:	You have a controlling interest if you own 50% of a company's stock.
Available for sale-	Securities that are held with the intent of selling them sometime in the future(700)
Consolidated financial statement-	Financial statements that present the assets and liability controlled by the parent company and the total revenues and expenses of the subsidiary companies
Controlling interest-	Ownership of more than 50% of the common stock of another entity.(698)
Cost method	An accounting method in which the investment in common stock is recorded at cost, and revenue is recognized only when cash dividend are received.
Debt investment-	Investment in government and corporations bonds.
Equity method-	An accounting method in which the investment in common stock is initially recorded at cost and the investment account in then adjusted annually to show the investors equity in the investee
Fair value-	Amount for which a security could be sold in a normal market.
Held to maturity securities-	Debt securities that the investor has the intet and ability to hold to their maturity date.
Investment portfolio-	Agroup of stocks and /or debt securities in different corporations held for investment purposes
Long term investment.	Investment that ae not readily marketable or that management does not intend to -convert into cash within the next year or operating cycle, which ever one is longer
Parent company-	A company that owns more than 50% of the common stock of another entity
Short term investment-	Investment that are readily marketable and intended to be converted into cash within the next year or operating cycle, whichever one is longer
Stock investment-	Investment in the capital stock of another corporations
Subsidiary(affiliated)company	A company in which more than 50% of its stock is owned by another
Trading securities	Securities bought and held primarily for sale in the near term to generate income on short term price differences.
17Profitability ratios	Measures of the income or operating success of a company for a given period of time.
Liquidity ratios	Measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.
Liquidity	Extent assets can be quickly turned into cash.
Current ratio	Whether current assets are enough to meet current liabilities. A higher ratio = a more liquid organization.Current assets/Current liabilities
Acid test ratio	Whether company can convert its current liabilities without selling stock (which are not easy to sell in the short term).(cash, short term investment, net account receivables/current liabilities)
Earnings per share	The net income earned on each share of common stock; computed by dividing net income minus preferred dividends (if any) by the number of weighted-average common shares outstanding.
Horizontal analysis	A technique for evaluating a series of financial statement data over a period of time, to determine the increase (decrease) that has taken place, expressed as either an amount or a%
Inventory turnover	A measure of the liquidity of inventory; by dividing cost of goods sold /by average inventory.
Return on investment	Amount of return of an investment in relation to its cost.
Stock turnover period	The average number of days stock is held on the balance sheet date. It is preferred for stock to be held the shortest time possible.Stock/Cost of sales per day
Account receivable turnover	A measure of the liquidity of accounts receivable, net credit sales/average accounts receivables.(795)
Asset turnover	A measure of how effieciently a company uses it asset to generate sales by net sales/average total assets.
Debt to assets ratio	Measures the %of assets provided by creditors , Total liabilities/ total assets (pg 800)
Discontinued operations	The disposal of a significant component of a business.
Other comprehensive income	Includes all changes in stockholders' equity during a period except those resulting from investments by stockholders and distributions to stockholders.
Payout ratio	Measures the percentage of earnings distributed in the form of cash dividends; by dividing cash dividends declared on common stock/ by net income.
Price-earnings (P-E) ratio	Measures the ratio of the market price of each share of common stock to the earnings per share; by dividing the market price per share/ by earnings per share.
Profit margin	Measures the percentage of each dollar of sales that results in net income; computed by dividing net income by net sales.
Ratio	An expression of the mathematical relationship between one quantity and another. The relationship may be expressed either as %, a rate, or a simple proportion.
Ratio analysis	A technique for evaluating financial statements that expresses the relationship between selected financial statement data.
Return on assets	An overall measure of profitability; computed by dividing net income by average total assets.
Return on common stockholders' equity	Measures the dollars of net income earned for each dollar invested by the owners, dividing net income minus preferred dividends (if any)/ by average common stockholders' equity.
Solvency ratios	Measures of the ability of the company to survive over a long period of time.
Sustainable income	The most likely level of income to be obtained by a company in the future.
Times interest earned	Measures a company's ability to meet interest payments as they come due, dividing the sum of net income, interest expense, and income tax expense /by interest expense.
Trading on the equity	Borrowing money at a lower rate of interest than can be earned by using the borrowed money. Also known as leveraging.
Vertical analysis	A technique for evaluating financial statement data that expresses each item within a financial statement as a percentage of a base amount.
18
19Which one of the following is a trend in industry?	The U.S. economy has shifted toward an emphasis on providing services.
One key difference appears when comparing the income statements of a manufacturing company to a merchandising company. What is that difference?	" Manufacturing companies use work in process, raw materials, and finished goods inventory balances to calculate cost of goods sold, while merchandising companies use only merchandise inventory balances."
Which of the following answer choices lists the three manufacturing costs?	Direct materials, direct labor, and manufacturing overhead
It is highly aggregated.	Which of the following statements is not true about managerial accounting?
Which of the following statements is true about managerial accounting?	It provides more detailed information than financial accounting does.
Direct materials are a Product Manufacturing Period Cost Overhead Cost	product only
Activity-based costing.	Which of the following managerial accounting techniques attempts to allocate manufacturing overhead in a more meaningful fashion?
Value chain	All business processes associated with providing a product or performing a service.
Triple bottom line	The evaluation of a company's social responsibility performance with regard to people, planet, and profit.
Treasurer	Financial officer responsible for custody of a company's funds and for maintaining its cash position.
Total quality management (TQM)	Systems implemented to reduce defects in finished products with the goal of achieving zero defects.
Total manufacturing costs	The sum of direct materials, direct labor, and manufacturing overhead incurred in the current period.
Total cost of work in process	Cost of the beginning work in process plus total manufacturing costs for the current period.
Theory of constraints	A specific approach used to identify and manage constraints in order to achieve the company's goals.
Product costs	Costs that are a necessary and integral part of producing the finished product.
Period costs	Costs that are matched with the revenue of a specific time period and charged to expense as incurred.
Manufacturing overhead	Manufacturing costs that are indirectly associated with the manufacture of the finished product.
Managerial accounting	A field of accounting that provides economic and financial information for managers and other internal users.
Line positions	Jobs that are directly involved in a company's primary revenue-generating operating activities.
Just-in-time (JIT) inventory	Inventory system in which goods are manufactured or purchased just in time for sale.
Raw materials that do not physically become part of the finished product or for which it is impractical to trace to the finished product because their physical association with the finished product is too small.	Indirect materials
Indirect labor	Work of factory employees that has no physical association with the finished product or for which it is impractical to trace the costs to the goods produced.
Enterprise resource planning (ERP) system	Software that provides a comprehensive, centralized, integrated source of information used to manage all major business processes.
Direct materials	Raw materials that can be physically and directly associated with manufacturing the finished product.
Direct labor	The work of factory employees that can be physically and directly associated with converting raw materials into finished goods.
Cost of goods manufactured	Total cost of work in process less the cost of the ending work in process inventory.
Corporate social responsibility	The efforts of a company to employ sustainable business practices with regard to its employees, society, and the environment.
Controller	Financial officer responsible for a company's accounting records, system of internal control, and preparation of financial statements, tax returns, and internal reports.
Chief fFinancial officer (CFO	officer responsible for a company's accounting records, system of internal control, and preparation of financial statements, tax returns, and internal reports.
Chief executive officer (CEO)	Corporate officer who has overall responsibility for managing the business and delegates responsibilities to other corporate officers.
Board of directors	The group of officials elected by the stockholders of a corporation to formulate operating policies and select officers who will manage the company.
Balanced scorecard	A performance-measurement approach that uses both financial and nonfinancialmeasures, tied to company objectives, to evaluate a company's operations in an integrated fashion.
Activity-based costing (ABC )	)A method of allocating overhead based on each product's use of activities in making the product.
Financial statement	The differences between the financial statement occurs in cost of goods section in income statement and current assets in the balance sheet.
Merchandises	beginning inventory+cost of goods purchased-ending inventory=cost of goods sold.
Manufacturer	beginning finished goods inventory+cost of goods manufactured-ending finished goods inventory= cost of goods sold.
Period Cost	cost that are matched with the revenue of a specific period rather then part of cost of a salable product and are nonmanufactiuring cost.
period cost continue	it includes selling and admisnistrative expenses. To determine net income, cost must be deducted from revenue in the period they are incurred.
period cost	non manufacturing cost Selling, administrative expenses.
Product cost	manufacturing cost ex. Direct material, labor manufacturing overhead.
Product cost examples	Company making snowboards examples: Product cost- direct materials: material cost (wood, resins,metal, screw holes,ink,metal edges.)
Product cost:Indirect labor- labor cost.
Product cost examples	Manufacturing overhead- depreciation on factory equipment,property taxes,maintenance salaries,plant manage salary.
Product cost: period	Period cost-Advertising cost, sales commission,cost of shipping
total manufacturing cost is	$846,000/10,000 units = 84.60 to produce.

Created by: Syl593