ACCT 526 Midterm Exam Questions with 100% Correct Answers

Describe a financial accountant. Correct Answer provides historical information to external users in accordance with GAAP Describe a managerial accountant. Correct Answer - provides detailed financial information and nonfinancial information to internal users for decision making, planning, and control purposes - planning, directing, controlling ___ establishes goal Correct Answer Planning ___ assesses whether goals were achieved. Correct Answer Control Describe the hierarchy of typical organization. Correct Answer Board of directors CEO VP and CFO Controller, treasurer, and internal auditor Managerial accountant, financial accountant, and tax accountant Describe IMA and ethical decision making. Correct Answer Use resources provided by internal company policies Four standards: competence, confidentiality, integrity, credibility Yes, consult an attorney regarding your rights! Describe ERP systems. Correct Answer - benefits must outweigh cost of implement - recording, sorting, analyzing, and reporting financial information for internal users - instant worldwide updates Describe manufacturing costs Correct Answer costs (product costs) are classified as DM, DL or MFOH and expensed when sold Describe nonmanufacturing costs. Correct Answer costs (period costs) are not related to production and are classified as selling costs or general and administrative costs and expensed in the period in which it was incurred Describe inventory accounts. Correct Answer - raw material inventory account - work-in-process inventory account - finished goods inventory account - ALL asset accounts on the balance sheet - COGS is recorded as an expense when inventory is sold and appears on the income statement, NOT balance sheet! F. Describe income statement of merchandising company. Correct Answer - merchandise inventory account - use term net purchases - include schedule of COGS in income statement