Management Accounting
Gross Profit Analysis Based on Budgets and Standard Costs: As the basis for illustrating the analysis of gross profit using budgets and standard costs, three financial statements for a company are presented: The budgeted income statement prepared at the beginning of the period The
Accounting For Ventures / Joint Venture Accounts Learning Objectives: Define and explain the terms consignment, consignor and consignee. What is the difference between consignment and sale? Make journal entries in the books of consignor and that of consignee. Prepare consignment account and consignee’s account
Definition and Explanation of Bookkeeping: Learning Objectives: Define and explain the term bookkeeping. The work book or books mean books of accounts and keeping implies maintaining in proper form and order. Thus bookkeeping may be defined as the art of recording business transactions in
Generally Accepted Accounting Principles (GAAP): Generally accepted accounting principles (GAAP) are those principles that have substantial authoritative support. The AICPA’s code of professional conduct requires that members prepare financial statements in accordance with generally accepted accounting principles (GAAP). Specifically rule 203 of this code
Definition and Explanation of Ledger: Learning Objectives: Define and explain the term “ledger” What are the features or characteristics of ledger? When all the transactions of a given period have been journalised, the next thing is to classify them according to the accounts affected.
Controlling Definition: Ensuring that the plan is actually carried out and is appropriately modified as circumstances change.
Controlling and Costing Materials – Questions and Answers: Questions: List the forms more frequently used in the procurement and use of materials. Should formal purchase requisitions and purchase orders be prepared for the purchase of incidental supplies, services, and repairs? Explain. How is an
General Environment Definition: Broad external conditions that may affect the organization.
Controlling and Costing Materials: After studying this chapter you should be able to: Effective materials management is essential in order to (1) provide the best service to customers, (2) produce at maximum efficiency, and (3) manage inventories at predetermined levels to stabilize investments in
Joint Venture Accounting Questions and Answers: Learning Objectives: Answers of some important joint venture questions. Theoretical Questions: Define a “joint venture”. What are the different methods of recording transactions relating to joint venture? Differentiate between “joint venture” and “consignment”. What is memorandum joint venture
Definition and Explanation of Activity Based Costing System: Learning Objectives: Understand activity based costing system. How it differs from a traditional costing system? Activity based costing (ABC) is a costing method that is designed to provide managers with cost information for strategic and other
Budgeting and Planning: After studying this chapter you should be able to: Understand why organizations budget and the processes they use to create budgets. Prepare a sales budget, including a schedule of expected cash receipts. Prepare a production budget. Prepare a direct materials budget,
Accounting For Depreciation Learning Objectives: Define and explain the term “depreciation”. Why does depreciation calculated and charged? What are the different methods for providing depreciation? Definition and Explanation of Depreciation: The value of assets gradually reduces on account of use. Such reduction in value
Budgeted Income Statement: Definition and Explanation: A budgeted income statement can be prepared from the data developed in: Sales budget Ending finished goods inventory budget Selling and administrative expense budget Cash budget The budgeted income statement is one of the key schedules in the
Controller Definition: Controller is defined as the manager in charge of the accounting department in an organization.
Future Value and Present Value Tables Future Value Tables: Table 1: Future Value of $1 Table 2: Future Value of Ordinary Annuity (Annuity in Arrear – End of Period Payments) Present Value Tables: Table 3: Present Value of $1 Table 4: Present Value of
Budgeted Balance Sheet: Definition and Explanation: The budgeted balance sheet is developed by beginning with the current balance sheet and adjusting it for the data contained in other budgets. Example | Sample of Budgeted Balance Sheet: Following is the budgeted balance sheet of Hampton
Further Classification of Labor Costs: Learning Objective of the Article: Properly classify labor costs associated with idle time, overtime and fringe benefits. Idle time, overtime, and fringe benefits associated with direct labor workers pose particular problems in accounting for labor costs. Are these costs