Accounting Index Card

acc

Managers perform 3 broad functions w/in organization:

Planning requires managers to look ahead & establish objectives (add value: trading&selling price)

Directing involves coordinating a company’s diverse activities & human resources. Implementing planned objectives&incentive to motivate employees; involves selecting executives, hiring, ,etc

controlling keeps activities on track; determine whether goals are met; changes to get back on track

Organization Charts show interrelationships of activities & delegation of authority/responsibility

Stockholders BODCEOCFOTreasurer/Controller

Sarbanes-Oxley Act (2002): CEO/CFOs must certify fairness of financial statements & internal controls;

Manufacturing (costs): activities & processes that convert raw materials (steel) into finished goods (car)

Direct materials = raw materials physically assoc. w/finished product.

Indirect materials = not part of finished product; can’t be traced bc physical assoc. is too small ($) [MO]

Direct labor: work of fact. Employees physically assoc w/ converting raw to finished

Indirect labor: wages of maintenance ppl, timekeepers, supervisors (MO)

Manufacturing overhead: costs indir. Assoc w/ finished product. (depreciation on factory buildings/machines, insurance, taxes, maintenance on factory facilities)

Product (inventoriable) costs: necessary&integral part of producing finished product (Manufacturing costs)

Period costs: matched w/revenue of a specific time period rather than included as part of cost of a salable product (include selling and administrative expenses, commission) Nonmanufacturing costs

Cost of Goods sold =Beginning FG inventory + cost of goods manufactured – ending FG inventory

Beginning Work in Process Inventory + Ttl Current Manufacturing Costs = Ttl Cost of WiP

Ttl Cost of WiP – Ending WiP Inventory = Cost of Goods Manufactured

beg. WIP inventory = manufacturing costs incurred in prior per.

Cost of Goods Manufactured...