Question

Chapter 18

This module introduces us to managerial accounting. We discuss its purpose, concepts, and roles in helping managers gather and organize information for decisions. We also explain basic management principles.

Pick two of the three topics and discuss, please use proper grammar

-There are many differences between financial and managerial accounting. Identify and explain at least three of these differences.

-Define and contrast period costs and product costs. How are they reported in the financial statements of a manufacturing company?

-What are the three types of inventories that are carried by manufacturers? Describe each type of inventory.

Answer 1

First one and the last one will be my choices.

Answer for 1)

Diffrerence between financial accounting and managerial accounting:

1)Generally,the financial accounting used in preparing the financial systems which are distributed for both outside and within company where as managerial accounting focused in reporting what are the problems existing and the solution for it for internal use only.

2) Financial accounting is generally concerned in reporting the results that already achieved where as estimations like budgets and so which are expected to be achieved are also part of managerial accounting.

3) Financial accounting issues financial statements only at the end of accounting period where as managerial accounting may issue reports at any time of accounting period top provide necessary guidance for the management.

Answer for 3)

The three types of inventories that are carried by manufacturers are:

1)Raw material inventory.

2)Work in progress inventory.

3)Finished goods inventory.

They can be described as following:

1)Raw material inventory: Raw material inventory as it's named indicates contains the raw material stock which are the inputs used for producing the outputs. Fire example, plastic for manufacture of plastic water bottles.

2) Work in prices inventory: Work in prices inventory means the raw material which have already passed through the manufacturing process yet there complete output is not produced and hence it cannot be considered either as raw material or as finished goods.

3) Finches good inventory: Finished good inventory contains the goods that have been completely manufactured and ready for sale but not yet sold to the customers.