Post-discussion task 5
1) What is accrual accounting?
Records the impact of a business transaction as it occurs. When the business
performs a service, makes a sale, or incurs an expense, the accountant records
the transaction even if the business receives
Closing the book: prepare accounts for the next periods transactions, closing entries, set the revenue, expense
and dividends back to zero at the end of the period.
Temporary accounts, revenues and expenses because they relate to
Learning goals accounting task 6
o The unit cost of a product or service is obtained by assigning total costs to many
identical or similar units.
o Separate costs into cost categories according to the timing of when costs are
Learning goals Task 7
1. What are the three ways to determine the service department costs.
o Direct allocation method
Most widely used method, allocates each support
departments costs directly to the operating departments.
o Step-down allocation method
Task 9: Learning Goals
1. What is absorption costing and variable costing?
a. Variable costing
i. A method of stock costing in which all variable
manufacturing costs are included as inventoriable costs, all
fixed manufacturing costs are excluded from inve
A budget is a detailed plan, expressed in quantitative terms that specify how an organization will
acquire and use resources during a particular period of time. The two main purposes of budgets are
planning and controlling.
2. What types of budgets exist?
Minutes Session 8
1: Why is it important to have cost behavior informa5on?
it is frequently the key to making considered management decisions; for planning and
2: Which techniques are available t
30 for 8 euro
10 for 10 eur
5 for 11 euro
10 for 12 eur
10 for 11 eur
10 for 10 eur
15 for 8 euro
Ending Inventory 5 for 11 euro
Sept 17, 2011 Investment in Alpha
Nov 15, 2011 Cash
Nov 30, 2011 Cash
Gain on Investment
Investment in Alpha
Nov 30, 2011 Investment in Beta
Dec 31, 2011 Unrealized Loss o
Accounting Tutorial 11
What is the high-low method?
a. Uses highest and lowest observed values of the cost driver within the relevant
range to estimate the cost function.
Why is it important to have cost behaviour information?
Learning goals Task 1:
Scorekeeping: refers to the accumulation of data and the reporting of reliable results to all levels of
Attention directing: Attempts to make visible both opportunities and problems on which managers
need to focus
Discussion leader: Nicholas
Post-discussion task 6
What's the FIFO method and weighted average?
Calculates the equivalent-unit cost of the work done to date (regardless of the period) and
assigns this cost to e
Post-discussion task 7
1. What are the purposes of cost allocation? P.138
To provide information for economic decisions
-decide whether to add a new airline flight
-decide whether to make a component part of a television set or purchase fr
Post-discussion task 10
High-low method - P.275-.
Entails using only the highest and lowest observed values of the cost driver
within the relevant range. The line connecting these two points becomes the
estimated cost function.
How to choose the right cos
Post-discussion task 12
1. Which costs should you include or exclude?
Exclude: variable marketing costs, fixed manufacturing costs, fixed marketing
Total variable costs
Post-discussion task 14
1. What is a static vs. a flexible budget?
A static budget is a budget that is based on one level of output; it is not adjusted or
altered after it is set, regardless of ensuing changes in actual output. Developed at the
start of t
1) What are different business forms and how are they different?
Most common forms of organizations are:
-Proprietorship: has a single owner who is called the proprietor. Normally small businesses.
The owner is personally liable for
What are double entry system, journal entries and T-accounts?
Double entry system: Records dual effects on the entity. Each transaction affects at
least two accounts
Journal entries: Accountants use a chronological record of transact
Task 3: Learning Goals
1) How can we account for the fact that not everyone will be able to
repay the debt? Should we write this amount off to accounts
receivable or should we also take into account that other accounts
are probably also uncollectible?
Task 6 learning goals:
1) Determine the acquisition cost and record the purchase of the machine.
The cost that a company recognizes on its books for property or equipment.
2) What is the purpose of depreciation?
Depreciation is the systematic allocation o
a) Give a detailed.
The source of all inflation episodes is a high growth rate of the money supply: simply by reducing the growth rate of the
money supply to low levels, inflation can be prevented.
Persistent high inflation only occurs with a high
Minutes session 2 task 3
Discussion leader: Bas G
Secretary: Bas B
- General ledger; book for record transaction
- How do companies record of transactions?
o Transaction is any event that has a financial impact on the busi
Total balance1-30 days
31-60 days Over 60 days