Question	Reply	Knotia/text reference
Explain in plain language the difference between recognizing either revenue or expense transactions and realizing them.	Recognizing: Revenue/expense is recorded when the business transaction is complete Realized: Revenue/expense is recorded when cash is received	ASPE 3400 (0.25)
Identify what account always changes when a transaction is realized and recorded		1500 (0.7)
Explain in plain language what distinguishes an expense from any other type of cost.	An expense is an ongoing payment, like utilities, rent, payroll, and marketing. Expenses are charged against the revenue account therefore expenses show up on the income statement. Where as costs is an amount that has to be paid or spent to buy or obtain something. Usually reflected on the balance sheet.
Explain in plain language what cost allocation accomplishes.	Cost allocation process of assigning and categorizing business expenses
Explain what basic arithmetic concept is being applied when costs are allocated.
Explain in plain language why management accountants need to apply either IAS 2 or ASPE 3031 when they allocate costs.
Identify an important internal decision affected by tracing and allocating costs.
Identify the single transaction that triggers the transfer of value from an inventory account on the statement of financial position to an account on the statement of earnings. State what CPAs name both accounts.
Identify the type of transaction that triggers the transfer of value from a raw materials inventory account into a work in process (WIP) or conversion account. State what CPAs name the conversion account.
Identify the type of transaction that triggers the transfer of value from a conversion inventory account into a finished goods account. State what CPAs name the finished goods inventory account.
Identify the type of transaction that transfers value into an inventory account of a retailer who only carries finished goods. State what CPAs name this account.
Identify the single transaction that transfers value from the retailers inventory account on the statement of financial position to the account on the statement of earnings. State what CPAs name this account on the statement of earnings.
Explain in plain language the difference between the account on the statement of earnings for a manufacturer and that of a retailer.
Explain in plain language the difference between the inventory account content on the statement of financial position for a manufacturer and that of a retailer.
State all costs of purchase.
State all costs of conversion.
State the three cost formulas explain in plain language why each is useful to decision makers.
Define replacement cost. Explain in plain language when replacement costs is the most reliable measure of the value of inventory. (hint: search Knotia, current cost in Accounting. Look in Part 1 Conceptual Framework sections 6:40 6:42).	Replacement cost is the price that an entity would pay to replace an existing asset at current market prices with a similar asset.
Define current asset in your own words (hint:search Knotia, Accounting, Part 2, General Accounting Section 1510).	Current asset is cash, investments, AR, notes receivable, inventories and prepaid expenses that are realizable within one year from the date of the balance sheet.	(0.03)
Explain in plain language what carrying value means. Identify specific account we are studying which is a carrying value.	Carrying value is the original cost of an asset, less the accumulated amount of any depreciation or amortization, less the accumulated amount of any asset impairments
Inventoriable costs are supposed to be realized quickly but other accounts capitalize expenses over a longer time period. State from ASPE 3031, an example of an expense with is not inventoried but is capitalized. State what CPAs name the capitalization account.	They capitalize on interest costs. CPAs name the capitalization accounts cost of inventory accounts. Or maybe other costs?	ASPE 3031 (0.18)
State what management accountants call the unit used to allocate all inventoriable costs in process costing.
Name the three cost formulas used to allocate costs in process costing use the text Chapter 17).	Weighted-average First-in, first-out (FIFO) Standard costing	Chpt.17 - 694
Explain in plain language what distinguishes each of the three cost formulas from one another (use the text Chapter 17). Explain the benefit of standard costing (text Chapter 17 see p. 710).	Weighted-average: Calculates the average EU cost of work done to date and assigns it to the units completed and EU WIP. First-in, first-out (FIFO): Assigns the costs of the prior accounting periods EUs that is in the beginning WIP inventory to the first EUs completed and transferred out in the current accounting period. The method then assigns the remaining costs of the current period to the EU added to and converted during that period. Cost of EU completed is kept separate from ending WIP unlike WAC method. Standard costing: Uses the standard input quantity required to produce one standard output unit. They get this from stored information from departments. The standard input cost is then multiplied by the standard input quantity which gives you the standard cost per unit. Benefit of standard costing: Other two methods need initial inventory valuation and impairment testing You use prior production info from engineers to formulate your standard cost per input Do not have to use complex EU calculations	Pg.710
Examine Exhibits 17-13 and 17-14. State which one is of most use to accountants and explain in plain language why.	17-14 would have the most use for accountants because it provides the actual costs acquired through the process instead of quantity.	Pg.715-716