Management Accounting

question 1

Multiple Choice

Management accounting:

• A) must comply with Australian accounting standards.
• B) focuses primarily on the needs of managers internal to the organisation.
• C) provides information for parties external to the organisation.
• D) involves reports focusing on the enterprise in its entirety.

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Definitions:

Periodic Inventory System

An inventory system in which ending inventory and cost of goods sold are determined at the end of the accounting period based on a physical inventory count.

Physical Inventory

Physical inventory refers to the process of counting and verifying the physical stock of goods a company holds in its possession.

Net Income

The net income of a business following the deduction of all costs, such as operational expenses and taxes, from its overall revenue.

Ending Inventory

The total value of a company’s inventory at the end of an accounting period, calculated before the new fiscal period begins.