Accounting CHP 18 – Flashcards
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Financial
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1. Accounting systems that must follow GAAP 2. Accounting systems that provides information on a company's past performance
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Creditors and Stockholders
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External parties for whom financial accounting reports are prepared
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Controlling
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The role managers play when they are comparing the company's actual results with the planned results
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Managers
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Internal Decision makers
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Managerial
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Accounting system not restricted by GAAP but chosen by comparing the costs versus the benefits of the system
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Planning
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management function that involves choosing goals and the means to achieve them
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Planning
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choosing goals and deciding how to achieve them
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Budget
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a financial plan that managers use to coordinate a businesses activities
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Controlling
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implementing plans and evaluating the results of business operations by comparing the actual results to the budget
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Cost/Benefit Analysis
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weighing costs against benefits to help make decisions
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Management Accountability
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the managers responsibility to wisely manage the resources of an organization
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Stakeholder
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an individual or group that has an interest in a business, including customers, creditors, suppliers, and investors
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Enterprise Resource Planning (ERP)
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software system that can integrate all of a company's functions, departments, and data into a single system
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Just-In-Time (JIT) Management
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Process of acquiring or producing inventory only when needed.
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Total Quality Management (TQM)
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(TQM) is an approach to quality that aims to involve all employees in the quality improvement process
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Value Chain
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A network of value-creating activities
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Product Cost
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The cost of purchasing or making a product. The cost is recorded as an asset and then expensed when the product is sold
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Service Company
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a company that sells intangible services rather than tangible products
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Period Cost
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Costs that are expensed in the period in which they are incurred; often called Operating Expenses, or Selling General, and Administrative Expenses.
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Merchandising Company
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a company that resells tangible products previously bought from suppliers
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Manufacturing Company
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a company that uses labor, plant, and equipment to convert raw materials into new finished products.
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Raw Materials Inventory (RM)
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Goods a company acquires to use in making products.
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Work-In-Process Inventory (WIP)
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goods partially worked on but not yet completed
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Finished Goods Inventory (FG)
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Completed goods that have not yet been sold
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Direct Cost
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Costs that can be specifically identified with a particular project or activity.
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Cost Object
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Anything for which a measurement of costs is desired
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Indirect Cost
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Business acquisition labor costs not associated with specifically selling work and usually in support of it
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Direct Materials (DM)
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the cost of raw materials that will become part of the finished product
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Direct Labor (DL)
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The cost for the labor that is used to directly manufacture the product
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Manufacturing Overhead (MOH)
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All manufacturing costs other than direct materials and direct labor; also called factory overhead and indirect manufacturing cost.
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Indirect Materials
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Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it
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Indirect Labor
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labor costs that are difficult to trace to specific products
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Prime Costs
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Sum of direct materials and direct labor
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Conversion Costs
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The combination of direct labor and manufacturing overhead costs.
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Cost of Goods Manufactured
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The cost of manufacturing the goods that were finished during the period; Beginning WIP + Direct Materials Used + Direct Labor + Manfacturing Overhead - Ending WIP = COGM
