Fabm Key Points - Nella. Thanks Sram

FABM KEY POINTS – nella.
+ Direct labor
THANKS SRAM + Direct expenses

+ Beginning WIP inventory
KEY POINTS: – Ending WIP inventory
+ Manufacturing overhead (factory
1. What is manufacturing. overhead)
- Manufacturing means to make a product, = Cost of goods manufactured

whether by hand or by machine or both.
2. Difference of manufacturing and
merchandising business
Cost of Goods Sold (Manufacturing)
3. 3 Types of product costs Formula
- direct material costs, direct labor costs, Cost of goods manufactured
and manufacturing overhead costs.
+ Beginning WIP (work in process)
4. Classification cost inventory
 Uncontrollable- – Ending WIP inventory
Controllable- costs and expenses that
can be controlled by the management = Cost of goods sold manufactured
through decision making 6. Total net income formula
 Direct- see through the naked eye;
woods Sales
Indirect- Can’t easily see; glue nails
Less: Sales Returns and Allowances
 fixed- monthly rent and salary
Net Sales
Variable- varies; sales commission, hourly
workers. Less: Cost of Goods Sold
 Sunk Cost - walang effect kahit idagdag Gross Profit

Opportunity cost- relevant in decision
Less: Operating Expenses
making
Selling Expenses
Administrative Expenses
5. Formula of COGS & COGSM
Earnings Before Interest and Taxes
Cost of goods manufactured formula
Less: Income tax expense
Raw material purchases
Net Income
+ Beginning raw material inventory
– Ending raw material inventory
7. Basic Accounting recap
= Raw materials consumed
-What is accounting helps businesses make decisions about
costing.
Accounting is the process of recording
financial transactions pertaining to a Government accounting
business. The accounting
Government accounting refers to the
process includes summarizing, analyzing, policies and regulations imposed by
and reporting these transactions to government. It is usually related
oversight agencies, regulators, and
to tax accounting where the government’s
tax collection entities. The financial main source of funds come from.
statements used in accounting are a
- forms of organization
concise summary of financial
Sole Proprietorship;
transactions over an accounting period,
summarizing a company’s operations, Partnerships;
financial position, and cash flows.
Corporations
- branches of accounting
- types of organization
Financial Accounting
Financial accounting refers to the processes
used to generate interim and annual - accounting equation
financial statements. ASSETS= LIABILITIES + EQUITY
The results of all financial transactions that - GAAP
occur during an accounting period are
summarized into the balance GAAP (Generally Accepted Accounting
Principles) helps in understanding the
sheet, income statement, and cash flow standard rules and concept of
statement.
the accounting world. It is important to learn
Managerial Accounting and understand the concepts to use them in
Managerial accounting uses much of the real life.
same data as financial accounting, but it 1. Economic entity assumption
organizes and utilizes
2. Monetary unit assumption
information in different ways. Namely, in
managerial accounting, an accountant 3. Full disclosure principle
generates monthly or quarterly
4. Time period assumption
reports that a business's management
5. Accrual basis accounting
team can use to make decisions about how
the business operates. 6. Revenue recognition principle
Cost Accounting 7. Matching principle
Just as managerial accounting helps 8. Cost Principle
businesses make decisions about
management, cost accounting 9. Going concern principle
10. Relevance, reliability, and consistency
11. Principle of conservatism
12. Materiality principle
-components of financial statement
Income Statement, a Statement of Changes
in Equity, a Balance Sheet, a Statement of
Cash Flows, and Notes to Financial
Statements.
-forms of presenting balance sheet
Report form and Account Form
-parts of cash flow
 Cash from operating activities.

 Cash from investing activities.
 Cash from financing activities.
 Disclosure of
noncash activities is sometimes
8. Bank Reconciliation
included when prepared under
the generally accepted Bank Reconciling Items:
accounting principles (GAAP).
+ Deposit in Transit
-accounting cycle - Outstanding Checks
1. Analyzing and recording Bank Errors (will adjust)
transactions via journal entries
2. Posting journal entries to ledger Add: Deposit in transit
accounts
Less: OC
3. Preparing unadjusted trial balance
4. Preparing adjusting entries at the Add/Less: Bank Errors
end of the period
5. Preparing adjusted trial balance
6. Preparing financial statements Book Reconciling Items:
7. Closing temporary accounts via
closing entries Debit Memos or SC
8. Preparing post-closing trial balance
Credit Memos or Interest
9. Reversing entries
Book Errors
Less: DM
Add: CM
Add/Less: Book errors

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FABM KEY POINTS – nella.

THANKS SRAM + Direct expenses

- Manufacturing means to make a product, = Cost of goods manufactured

 Sunk Cost - walang effect kahit idagdag Gross Profit

 Cash from operating activities.

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