BSNS 115: Cost and Formulas
Accounting Questions With Complete
Answers.
What is accounting? - Answer Accounting provides a method of systematically recording and
evaluating business activities
Stewardship - Answer The more traditional role of providing accountability reports of
transactions for a given period
Decision Usefulness - Answer The more recent role of assisting users with making informed
choices about the allocation of scarce resources
What is the difference between Internal and External Users - Answer Internal users work
within the company and have access to business records whereas External are those who are
not apart of the business but may still be affected by decisions made.
Name the 9 users of accounting information - Answer Lenders
Suppliers
Competitors
Customers
Managers
Government
Community reps
Employees and their reps
Investment analyst
Accounting information system - Answer Identify-Record-analyse-Report
List the limitations of accounting information - Answer Time Lag
Historical information
Subjectivity of info
Cost of providing info
, Financial Accounting - Answer External oriented and concerned with historical results of an
entity performance
Management Accounting - Answer Internal
Plan and contrrol
Support management decision-making process
Total cost - Answer Total Variable Cost + Total Fixed Cost
Total Variable Cost (TVC) - Answer Variable cost per unit x Units sold
Variable rate (VC per unit) - Answer TVC / Units
Selling Price (SP) - Answer Sales / Units
Units sold - Answer CM / UCM
OR
CM / (SP - VC per unit)
Sales - Answer Selling price x Units sold
Contribution Margin (CM) - Answer Sales - Variable Costs
Profit / Loss - Answer Sales - Total Cost
OR
Sales - VC = CM - FC
Alternative way of finding profit - Answer (CM% x Sales) - FC
Contribution Margin per unit (UCM) - Answer SP - VC per unit
OR
CM / units sold
Contribution Margin Ratio (CM%) - Answer CM / Sales
OR
CM per unit / SP
Accounting Questions With Complete
Answers.
What is accounting? - Answer Accounting provides a method of systematically recording and
evaluating business activities
Stewardship - Answer The more traditional role of providing accountability reports of
transactions for a given period
Decision Usefulness - Answer The more recent role of assisting users with making informed
choices about the allocation of scarce resources
What is the difference between Internal and External Users - Answer Internal users work
within the company and have access to business records whereas External are those who are
not apart of the business but may still be affected by decisions made.
Name the 9 users of accounting information - Answer Lenders
Suppliers
Competitors
Customers
Managers
Government
Community reps
Employees and their reps
Investment analyst
Accounting information system - Answer Identify-Record-analyse-Report
List the limitations of accounting information - Answer Time Lag
Historical information
Subjectivity of info
Cost of providing info
, Financial Accounting - Answer External oriented and concerned with historical results of an
entity performance
Management Accounting - Answer Internal
Plan and contrrol
Support management decision-making process
Total cost - Answer Total Variable Cost + Total Fixed Cost
Total Variable Cost (TVC) - Answer Variable cost per unit x Units sold
Variable rate (VC per unit) - Answer TVC / Units
Selling Price (SP) - Answer Sales / Units
Units sold - Answer CM / UCM
OR
CM / (SP - VC per unit)
Sales - Answer Selling price x Units sold
Contribution Margin (CM) - Answer Sales - Variable Costs
Profit / Loss - Answer Sales - Total Cost
OR
Sales - VC = CM - FC
Alternative way of finding profit - Answer (CM% x Sales) - FC
Contribution Margin per unit (UCM) - Answer SP - VC per unit
OR
CM / units sold
Contribution Margin Ratio (CM%) - Answer CM / Sales
OR
CM per unit / SP
