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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

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

b. Provides detailed reports on parts of the company.

What are the three manufacturing costs for a manufacturing company? Describe each.

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.

6. Wages of assembly line workers for a factory

Becky Knauer recently resigned from her position as controller for Shamalay Automotive, a small, struggling foreign car dealer in Upper Saddle River, New Jersey. Becky has just started a new job as controller for Mueller Imports, a much larger dealer for the same car manufacturer. Demand for this particular make of car is exploding, and the manufacturer cannot produce enough to satisfy demand. The manufacturerโ€™s regional sales managers are each given a certain number of cars. Each sales manager then decides how to divide the cars among the independently owned dealerships in the region. Because of high demand for these cars, dealerships all want to receive as many cars as they can from the regional sales manager.

Beckyโ€™s former employer, Shamalay Automotive, receives only about 25 cars each month. Consequently, Shamalay is not very profitable.

Becky is surprised to learn that her new employer, Mueller Imports, receives more than 200 cars each month. Becky soon gets another surprise. Every couple of months, a local jeweler bills the dealer $5,000 for โ€œmiscellaneous services.โ€ Franz Mueller, the owner of the dealership, personally approves payment of these invoices, noting that each invoice is a โ€œselling expense.โ€ From casual conversations with a salesperson, Becky learns that Mueller frequently gives Rolex watches to the manufacturerโ€™s regional sales manager and other sales executives. Before talking to anyone about this, Becky decides to work through her ethical dilemma. Put yourself in Beckyโ€™s place.

Requirements

1. What is the ethical issue?

2. What are your options?

3. What are the possible consequences?

4. What should you do?

ABC Manufacturing Company has the following data for 2019 (amounts in millions):

Direct Materials, January 1 $ 5

Direct Materials, December 31 7

Work-in-Process Inventory, January 1 12

Work-in-Process Inventory, December 31 16

Finished Goods Inventory, January 1 8

Finished Goods Inventory, December 31 6

Direct Materials Purchased, including Freight In 25

Direct Labor 36

Manufacturing Overhead 17

Prepare the schedule of cost of goods manufactured and the cost of goods sold section of the income statement for the year ended December 31, 2019.

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