Term 1 Accounting and Business Management Concepts, Quizzes of Financial Accounting

Download Term 1 Accounting and Business Management Concepts and more Quizzes Financial Accounting in PDF only on Docsity! TERM 1 How does a purchase discount affect buyers accounts DEFINITION 1 decreases merchandise inventory cost TERM 2 Incremental Budgeting DEFINITION 2 each budget uses last periods expenditures with increase for this period TERM 3 Most business decisions focus on a narrow range of activity DEFINITION 3 Relevant range TERM 4 Businesses cannot use cost-volume-profit analysis for predicting future performance if what occurs DEFINITION 4 costs cannot be properly classified into fixed and variable costs TERM 5 Branch of accounting that deals with the issues of internal business such as cost control, product pricing, and dif analysis DEFINITION 5 Managerial accounting TERM 6 Contribution Margin ratio is DEFINITION 6 the amount of each sales dollar available to cover fixed costs and profit TERM 7 Sales returns and allowances are what kinds of accounts DEFINITION 7 Contra-Revenue TERM 8 Which of the following increases a manufacturer's finished good inventory DEFINITION 8 Cost of goods manufactured TERM 9 Walmart is a merchandiser this means Walmart sells DEFINITION 9 Goods that is purchased TERM 10 costs that are recorded as inventory cost on the balance sheet until the goods are sold are DEFINITION 10 product costs TERM 21 Financial accounting DEFINITION 21 external decision makers or investors who are making financing decisions TERM 22 job order DEFINITION 22 costing for cost accounting purposes requires that manufactures keep track of their manufacturing costs by product TERM 23 Contribution Margin total Formula DEFINITION 23 total sales-total variable costs TERM 24 Unit Contribution Margin DEFINITION 24 sales price per unit-variable costs per unit. TERM 25 Contribution cost def DEFINITION 25 Contributes to covering fixed costs once fixed costs are covered by the contribution margin it is profit. TERM 26 Contribution format Income statement DEFINITION 26 helpful to make predictions on the future revenues, cost, and profit based volume of units produced and sold. Assists the the calculation of break-even sales amount. TERM 27 Cost behavior & its 3 types DEFINITION 27 how cost react in a relevant range of production.it captures how a cost changes as there are changes in activity levelfixed-stay the same on a per unit basisvariable cost- stay the same on a per unit basismixed- have both a fixed and variable component TERM 28 Period cost DEFINITION 28 stuff that does not happen in the factory where products are ma TERM 29 Two types of Period cost DEFINITION 29 Selling expense=marketing and delivering products advertising and sales peoples salariesAdministrative expenses= stuff that happens in the headquarters office not in the factory TERM 30 Product Cost DEFINITION 30 cost associated with the manufacturing of a product. Stuff that happens in the factory. TERM 31 3 types of product cost DEFINITION 31 Direst material=marterials that are used directly in the productDirect labor=people involved in directly marking the product salaries and wages of assembly/manufacturing personnelFactory overhead= the indirect costs needed to make a product. Cost that still happen in the factory but are not direct in nature.Examples: Indirect materialsindirect labor-factory supervisor, janitorother factory overhead-electricity, water, depreciation TERM 32 3 types of inventory that a Manufacture maintains DEFINITION 32 direct marterialwork in processfinished goods TERM 33 1 type of inventory merchandiser maintains DEFINITION 33 finished goods inventory this is not yet sold TERM 34 Mark up Percentage DEFINITION 34 profit divided by total cost TERM 35 Cost Variance DEFINITION 35 the controlling objective of the budgeting process is to compare actual results to the budgeted goals.