ACCT 2301 Study Guide - Midterm Guide: Financial Accounting, Management Accounting, Net Income
Document Summary
Chapter 1 - management accounting and corporate governance. Continuous (past, present, and future) promotes relevance + timelessness. Product cost: related to manufacturing of product (inventory on bs cogs on is) Period cost: not directly related to production (not on bs sg&a expenses on is) Overhead: provides capacity to produce, indirect must be applied (2113/ # units) Cost of supplies in the doctor"s office. Upstream cost: before production (r&d, design, supply chain, procurement ) Downstream: after manufacturing (marketing, customer service, storage, warranty ) Cost flow: from raw materials (inventory on bs) to cogs (on is) Conversion process: from raw wip finished goods. Service industries: no wip and finished goods. Avoid statement manipulation (used to get financing, lower taxes, or motivation) Control by statement of ethical professional practice . Internally controlled by work division, clear rules and consequences, physical controls, and lines of authority. Raw materials economy assembly economy service economy. Changing economy = change in information needed = change in accounting.
