Questions and Answers of Financial And Management Accounting

[S] Analyse the debit and credit aspect of each transaction listed at (a), (b) and (c) of question B3.2.
Prepare a spreadsheet similar to that presented in Table 3.10, setting out on the first line the items contained in the list of assets and liabilities of question B3.2 and then on lines 2, 3 and 4
Is it a good idea for the Financial Reporting Review Panel to focus on particular industry sectors in monitoring the quality of financial reporting?
Why is it more likely that the industries listed for attention could face more ‘challenges’ in recognising revenues and in expensing costs?
List and explain the qualitative characteristics desirable in financial statements.
Explain the approach to measurement used in financial statements.
Explain why there is more than one view on the role of prudence in accounting.
Understand and explain how and why financial reporting is regulated or influenced by external authorities.
Be aware of the process by which financial statements are reviewed by an investor.
Explain what is meant by each of the following: (Section 4.2)(a) relevance;(b) reliability;(c) faithful representation;(d) neutrality;(e) prudence;(f) completeness;(g) comparability;(h)
Explain the accounting measurement principles of each of the following: (Section 4.3)(a) going concern;(b) accruals;(c) consistency;(d) the concept of prudence.
Explain why companies should avoid overstatement of assets or understatement of liabilities. (Section 4.4)
Explain the responsibilities of directors of a company towards shareholders in relation to the financial statements of a company. (Section 4.5.2)
Explain the impact on financial statements of each of the following: (Section 4.5)(a) company law;(b) the International Accounting Standards Board; and(c) the UK tax law.
Explain how the monitoring of financial statements is carried out by each of the following: (Section 4.5)(a) the auditors; and(b) the Financial Reporting Review Panel.
Explain any two accounting measurement principles, explaining how each affects current accounting practice.
How does the company describe its trading performance?
How does the company measure trends in operating performance?
Explain the application of the accounting equation to transactions involving the buying and selling of inventory (trading stock).
Explain the application of the accounting equation to transactions involving the manufacture and sale of products.
Analyse transactions of a trading or manufacturing business during a specific period of time, using the accounting equation.
Prepare a spreadsheet analysing the transactions, and show that the results of the spreadsheet analysis are consistent with financial statements provided by the organisation.
Explain the main aspects of the statement of cash flows, profit and loss account and statement of financial position (balance sheet) of a trading or a manufacturing business.
Analyse the transactions of a trading or a manufacturing business using the rules of debit and credit bookkeeping.
Prepare, from a list of transactions of an organisation, ledger accounts and a trial balance which could be used to confirm the financial statements provided by the organisation.
Summarise the transactions of question A6.1 in a spreadsheet and show that the totals of the spreadsheet satisfy the accounting equation.
(a) Using the list of transactions at question A6.4 above, prepare a spreadsheet similar to that presented in Table 6.8.(b) Show the resulting impact on the accounting equation and demonstrate that
Using the total from the columns of the spreadsheet of question B6.1(a), prepare for the business in the month of April:(a) a statement of cash flows;(b) a statement of financial position (balance
Prepare ledger accounts for the transactions of Peter Gold, furniture supplier, listed in question A6.4.
Prepare ledger accounts for the transactions of Jane Gate’s dental practice, listed in question A5.5.
Using the totals from the columns of the spreadsheet of question B5.1, prepare for the dental practice in the month of April:(a) a statement of cash flows;(b) a statement of financial position
Analyse each of the following transactions to show the two aspects of the transaction: (Section 5.3)Apr. 1 Jane Gate commenced her dental practice on 1 April by depositing £60,000 in a business bank
Which of the items in the list of transactions in question A5.1 will have an effect on a statement of financial position (balance sheet)?
Which of the items in the list of transactions in question A5.1 will have an effect on a statement of cash flows?
Which of the items in the list of transactions in question A5.1 will have an effect on an income statement (profit and loss account)?
The following list of transactions relates to a television repair business during the first month of business. Explain how each transaction affects the accounting equation:(Section 5.2)(a) Owner puts
Prepare, from a list of transactions of an organisation, ledger accounts and a trial balance which could be used to prepare the financial statements provided by the organisation..
Analyse the transactions of a service business using the rules of debit and credit bookkeeping.
Explain the main aspects of the statement of cash flows, income statement (profit and loss account) and statement of financial position (balance sheet) of a service business.
Prepare a spreadsheet analysing the transactions and show that the results of the spreadsheet are consistent with the financial statements provided by the organisation.
Analyse the transactions of a service business during a specific period of time, using the accounting equation.
Explain how the accounting equation is applied to transactions of a service business.
What are the risks to a service business of strong reliance on its ‘people’ resource?
What are the costs to each company of maintaining the ‘people’ assets that will not appear in the statement of financial position (balance sheet)?
Mid Range, Inc., is considering entering the potato chips market with its new product, Tasty Chips, which in taste tests has beaten the competition available in the U.S. The potato chip market is a
Describe the five basic components of ISCM and how they respond to a shift between a responsiveness and an efficiency focus in the firm.
What are some of the reasons value migrates in an industry value chain?
Absorbent Paper Towels is a producer of paper towels that are sold through three channels: direct to large grocery chains; through wholesalers to small convenience stores; and direct to large
You are given the following information about Huston, Inc. Based on the numbers given, in your opinion, is the company following a responsiveness or efficiency strategy? Use the industry norm as an
What are the four value chain migration patterns and what does it mean to say value migrates within the value chain?
Touhy Tires makes a broad range of tires for the automotive and truck markets. It sells its products directly to the original equipment manufacturers (OEMs; like Ford Motors), to wholesalers for
You are given the following information about Tele Corp. Based on the numbers given, in your opinion, is the company following a responsiveness or efficiency strategy? Use the industry norm as an
Identify the six elements of a company’s channel costs.
Standish, Inc., serves the following three channels with its products. It only collects a limited amount of data on these channels, but wants you to calculate its profitability given what is known.
Sydney’s Pizza is a national brand that sells frozen pizzas in grocery stores and convenience stores. Last year, it sold 2,000,000 pizzas at an average price of $6.25. The income statement and
High Five Industries serves the following three channels with its products. It only collects a limited amount of data on these channels, but wants you to calculate its profitability given what is
What are the components of a firm’s economic structure?
Angie’s Pies is a producer of a wide variety of pies that sell in the Midwest in grocery stores and convenience stores. Each pie retails for $8.79. Angie’s sold 1 million pies in the last year.
What are the five basic financial tools we can use to analyze performance of a value chain?
Italian Favorites is the producer of an entire line of canned tomato products. It sells in two segments: retail grocery chains in a 28-ounce can, and a wholesale segment that sells #10 cans of
NuCastle Industries gives you the following information from its last year of performance.REQUIRED:a. Calculate profit margin, asset intensity, and leverage for Nu Castle Industries.b. Calculate the
Define the three different types of cost drivers and give examples of each.
Yankee Spices is a medium- sized manufacturer of a wide variety of spices sold into two main segments of the market : direct to grocery store chains and to restaurants through a wholesaler network.
Falsta, Inc., gives you the following information from its last year of performance.REQUIRED:a. Calculate profit margin, asset intensity, and leverage for Falsta, Inc.b. Calculate the return on
Describe the three key steps that make up SCM analyses.
Brighton Papers is a producer of a variety of papers. One of its biggest markets is for plain white 8½ x 11 paper used in printers and copiers. It sells the paper in cases of 10 reams of 500 sheets.
What is the key difference between a divergent and a convergent value chain?
Anskar Industries makes computer modems that are used in a broad range of channels. Its three largest customer segments are large businesses, small businesses, and retail stores. The costs and
Fancy Clip is a producer of hair clips and related types of hair accessories. Its value chain partners and information as it relates to the hair clips market is contained in the following
Simpson Enterprises provides computer maintenance services to a broad range of customers, from local schools to small businesses to residential customers. It obtains the following information about
Describe the key differences between SCM and ISCM.
Novelty, Inc., makes several lines of customized novelty items, including T-shirts and sweatshirts that are made in two facilities. One facility makes the large runs of T-shirts and sweatshirts
You will be using the Database Problem 14.2 Template and the same contribution margin worksheets (New Cars Contribution-10 years, Used Cars Contribution-10 Years, and Repairs Contribution 10 years)
Good Grains is a producer of breakfast cereals. There are 2.8 billion boxes of breakfast cereal sold each year in the United States at an average retail price of $3 per box. The company is trying to
Smith Industries produces bicycle tires. It has just been approached by a major producer of bicycles to have a new type of tire produced that would be branded by the customer, who would sole source
What are the five forces in a market and how do they affect how a firm competes in the marketplace?
TruGreen Products is looking at developing a new product: plastic pill bottles for use by pharmacies. There is a huge market for both custom and generic- topped bottles. TruGreen estimates it could
In this exercise, you are going to calculate the following ratios for the three segments of Prestige Auto’s business—New Cars, Used Cars, and Service—on the DB Problem 14.1 Template:Net profit
Still Waters, Inc., is a producer of plastic bottles for various beverages. Recently, it was approached by a customer who wanted a quote on a new type of beverage bottle that would be much more
What is an industry value chain?
For each of the following value attributes for a car, the revenue it earned for the company is stated alongside the cost to provide that attribute. For each attribute, determine its leverage or
What is the difference between basic features of a firm’s value proposition and its differentiators? Please give examples of each.
What are some of the variances we can run on customer profitability?
Describe a customer profitability report.
What is customer retention and why is it important to a firm?
What are the three basic traits of an ideal customer?
Fresh Scents makes a variety of candles that it sells to retailers across the Western part of the country. It sells scented candles in a jar and tapers of various colors to one of its major
Identify the four basic types of customers and describe how each affects the costs of a firm trying to serve them.
Susie Goodman’s Products makes several lines of women’s handbags. While it sells to many customers, it has recently become concerned over the performance of one specific customer, Neon Lights.
For each of the following value attributes, the revenue it earned for the company is stated alongside the cost to provide that attribute. For each attribute, determine its leverage or multiplier
What are the three ways a company can earn greater profits from customers?
Lucky Foods produces a variety of dog treats that it sells through three major wholesalers, BJ’s Pet Foods, Anderson Pet Products, and Nielsen, Inc. There has been some debate over the last few
Calculate the following variances for Customer Z of Tom’s Limo Services. Mark each variance as favorable or unfavorable. Remember that if the variance of actual minus budget is negative for
What is value-based customer segmentation? Why is it used?
Safe at Home produces several lines of ant traps for commercial and domestic use. It sells its products to three major wholesalers, which then distribute them to the retail market. Recently new
Calculate the following variances for Customer X of Easy Speed Printing Services. Mark each variance as favorable or unfavorable. Remember that if the variance of actual minus budget is negative for
Describe the economics of the market in terms of what each ring in Figure 13.2 represents.Figure 13.2: The Economics of the Market Proft Non-Value-Added Activities and Cast (Waste) Market forces
Using the following information, determine which customer is more profitable to serve. Calculate both total profit and profit percentage (of revenue) for each customer. Line Item Customer A Customer
Outdoor Life makes three different product lines of outdoor furniture: recliners, chairs, and table sets. The company is known for its distinctive materials, so all three product lines offer the same
What is a customer value proposition?

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