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Chapter 16: 16-1SE_a (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):

  1. Helps investors make investment decisions

Short Answer

Expert verified

Investment is something acquired with the motive of generating income and a financial statement is a correct option for this.

Step by step solution

01

Definition of Investment

The Investment is defined as the asset or any other item which is acquired with the purpose of generating some revenue in the future

02

Indication of accounting

The correct answer for this statement is financial accounting.

Explanation:

Financial accounting is used in this statement. This is because the investors will require a financial statement to assess the company whether the company is good for investing or not.

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Most popular questions from this chapter

Computing manufacturing overhead

Sunglasses Unlimited Company manufactures sunglasses. Following is a list of costs the company incurred during May. Use the list to calculate the total manufacturing overhead costs for the month.

Glue for frames $ 250

Depreciation on company cars used by sales force 4,000

Plant depreciation 7,500

Interest Expense 1,500

Lenses 52,000

Company president’s salary 24,500

Plant foreman’s salary 3,500

Plant janitor’s wages 1,300

Oil for manufacturing equipment 150

In 100 words or fewer, explain the difference between product costs and period costs. In your explanation, explain the inventory accounts of a manufacturer.

Selected data for three companies are given below. All inventory amounts are ending balances and all amounts are in millions.

Company A Company B Company C

Cash 6WagesExpense 12 Administrative Expenses $ 4

Net Sales Revenue 48 Equipment 32 Cash 25

Finished Goods Inventory 10 Accounts Receivable 8 Net Sales Revenue 75

Cost of Goods Sold 23 Service Revenue 65 Selling Expenses 8

Selling Expenses 4 Cash 34 Merchandise Inventory 12

Equipment 67 Rent Expense 12 Equipment 55

Work-in-Process Inventory 9 Accounts Receivable 19

Accounts Receivable 14 Cost of Goods Sold 25

Cost of Goods Manufactured 23

Administrative Expenses 7

Raw Materials Inventory 6

Using the data on the previous page, calculate total current assets for each company

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 1. What should Sue Peters do?

Identify each cost as a period cost or a product cost. If it is a product cost, further indicate if the cost is direct materials, direct labor, or manufacturing overhead. Then determine if the product cost is a prime cost and/or a conversion cost.

7. Wages of the office receptionist in an administrative office
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