Insurance and taxes on selling and a Direct materials purchased and used Based o

Question

Insurance and taxes on selling and a Direct materials purchased and used Based on the above information, the amount of period costs shows on Suben's incon A)S180,0 00S 13) Assuming a company's inventory increased during the period, which of the may increase net income? 13) 0,000 C) $150,000 D)5430,000 tatement is 12, A) Recording depreciation on production equipenent as an expense including them in inventory B) Expensing raw material costs instead of inchading them in inventory C) Recording depreciation on production equipesent as an expense D) Recording administrative salaries as a product cost and Expensing raw material costs insscad of 14) Costs such as transportation-out, sales commissions, uncollectible accounts are sometimes called: 14) roceivable, and advertising co A) direct costs C) indirect costs. D) downstream costs B) upstream costs. 15) Costs associated with holding inventory often include: A) financing 15) B) warehouse space. C) theft, damage, and obsolescence D) supervision. E) All of these. ESSAY. Write your answer in the space provided or on a separate sheet of paper 16) Complete the following table to compare and contrast f and managerial accounting Financial Accounting Managerial Accounting haracteristic of information the following information regarding itsfist year of operations: s 60,000 16,000 4,000 40,000 28,000 17) Administrative salaries Depreciation on factory equipment Indirect materials Marketing costs Salaries for factory supervisors

Explanation / Answer

Ques 13
D)Recording administrative salaries as a product cost

Explanation:
Product costs associated with goods that have not been sold are recorded in the account called inventory. Inventory cost is shown on the balance sheet as an asset. The amount of total assets and net income will be higher if a product cost is classified as an asset. Product cost associated with goods that have been sold should be recorded in the account called cost of goods sold. Cost of goods sold is an expense shown on the income statement. The amount of total assets and net income will be lower if a product cost is classified as an expense as opposed to being classified as an asset

Ques 14
D)Downstream Costs

Explanation:Post-production costs incurred to make a sale or keep customers satisfied.
costs like advertising,sales commission , advertising that occur after the manufacturing process is complete are all downstream costs

Ques 15
E)All of these

Explanation:An entity might require to hold inventory due to : Transaction motives , Precautionary motives , speculative motives keeping in mind the fluctuations expected to future
Therefore , there a costs associated with holding inventory such costs include cost of financing , storage space , breakages , obsolescence , deterioration , insurance , etc. there are motives for holdin inventory and these motives are often traded off.

Ques 16:

Characteristics Financial Accounting Managerial Accounting Users Outside/ external. like the governement agencies , investors , suppliers , Finanacial Institution Internal/Inside As these are prepared for internal descision making by managers Level of aggregation Global(Entire company) Detailed or sub units Regulation FASB, GAAP , SEC Value-Added Characteristic of Information Ojective , reliable , consistent , historical Estimates and projections Time Horizon Historical Present & Future Reporting frequency Periodic(Yearly/quarterly ) Continuous

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