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Chapter 16: Q1SE_e (page 885)

Comparing managerial accounting and financial accounting

For each of the following, indicate whether the statement relates to managerial accounting (MA) or financial accounting (FA):

e. Reports audited annually by independent certified public accountants.

Short Answer

Expert verified

Financial accounting is involved in the audit of reports annually.

Step by step solution

01

Definition of Audit

An audit is defined as an official inspection of the financial accounts of a business organization, by an independent body.

02

Identification of accounting

The correct option is financial accounting

The audit is done of the financial statement of the company to check the reliability of the financial statements. Financial accounting helps in the preparation of financial statements.

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Most popular questions from this chapter

How is cost of goods manufactured calculated?

Distinguishing between direct and indirect costs Granger Cards is a manufacturer of greeting cards. Classify its costs by matching the costs to the terms.

  1. Direct materials
  2. Direct labor
  3. Indirect materials
  4. Indirect labor
  5. Other manufacturing overhead

a. Artists’ wages

b. Wages of materials warehouse workers

c. Paper

d. Depreciation on manufacturing equipment

e. Manufacturing plant manager’s salary

f. Property taxes on manufacturing plant

g. Glue for envelopes

Making ethical decisions

Sue Peters is the controller at Vroom, a car dealership. Dale Miller recently has been hired as the bookkeeper. Dale wanted to attend a class in Excel spreadsheets, so Sue temporarily took over Dale’s duties, including overseeing a fund used for gas purchases before test drives. Sue found a shortage in the fund and confronted Dale when he returned to work. Dale admitted that he occasionally uses the fund to pay for his own gas. Sue estimated the shortage at $450.

Requirements 2. Would you change your answer if Sue Peters was the one recently hired as controller and Dale Miller was a well-liked, long time employee who indicated he always eventually repaid the fund?

Question:Calculating cost of goods sold for merchandising and manufacturing companies

Below are data for two companies:

Company A Company B

Beginning balances:

Merchandise Inventory \( 10,600

Finished Goods Inventory \) 15,000

Ending balances:

Merchandise Inventory 13,100

Finished Goods Inventory 11,700

Net Purchases 154,500

Cost of Goods Manufactured 214,500

Requirements

1. Define the three business types: service, merchandising, and manufacturing.

2. Based on the data given for the two companies, determine the business type of each one.

3. Calculate the cost of goods sold for each company

Identifying product costs and period costs Classify each cost of a paper manufacturer as either a product cost or a period cost:

i. Life insurance on the CEO.
See all solutions

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