Financial accounting theory chapter 4 answers

During the period, the Company: A backflush system compatible with full absorption costing appears in Exhibit Note that the direct materials purchases and conversion costs are charged directly to Cost of Goods Sold.

Financial accounting theory chapter 4 answers

Roles and Responsibilities of the Financial Manager This information will assist in understanding the roles and responsibilities of construction financial managers.

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Specifically, this information is designed to assist: Construction financial managers sometimes wonder how their duties, responsibilities and relations with others within the organization compare to other construction financial managers. Similarly, construction company owners sometimes wonder what skills are needed and what expectations should be held of their construction financial manager.

This information will help provide the answers to such questions. That may sound extreme, but in many circumstances, competition is so fierce and margins are so thin, reliable financial information and analysis certainly can make the difference between success and failure.

The role also varies depending on the size of the company. For example, a construction financial manager whose background is in construction operations estimating and project management initially will concentrate on the proper recording of job costs.

A construction financial manager whose background is in public accounting probably will initially emphasize financial reporting and income tax planning. The financial manager should recognize these influencing factors and make efforts to compensate for any deficiencies. The skills and personalities of the other members of the management team also affect the role of the construction financial manager.

For example, most construction financial managers feel that cash management is their responsibility.

Financial Management and Accounting for the Construction Industry

If the other management team members share this feeling, responsibility for cash management probably will be assigned to the finance department. However, if another management team member feels that responsibility for cash management should be shared, some compromise will be made.

To a great extent, sharing of responsibilities depends on the skills and personalities of the management team members. Successful financial managers respect the need for compromise in sharing responsibilities.

As already mentioned, the size of the company frequently affects the role of the financial manager, because roles and responsibilities are more specialized in larger companies than in smaller companies.

In small companies, responsibilities are assigned to a smaller group of managers and, accordingly, each manager must handle a wider range of responsibilities. For example, the financial manager in a small company with three senior managers owner, operations manager and finance manager will typically be responsible for all administrative and financial tasks.

The other two senior managers will typically concentrate on marketing, estimating and project management. In larger companies, with responsibilities assigned to a larger group of managers, each manager will be assigned more specialized responsibilities. For example, the financial manager of a large company with several senior managers often has limited responsibility for administrative tasks involving contact with customers and subcontractors.

The department with primary responsibility for customer and subcontractor relations usually the construction operations department will prefer to be the primary contact in order to minimize the possibility of misunderstandings between the parties.

Because there is no one standard set of construction financial manager responsibilities, each financial manager should be alert for areas of responsibility that are not clearly defined in the organization.

The financial manager should take the initiative in assuring that all significant responsibilities are assigned. To assist the other managers in achieving their goals, the financial manager should first consider what the other team members need from the financial management function in order to achieve their objectives.

For example, the financial manager should understand that the manager of the estimating department relies on the accounting department to maintain accurate historical job cost records.

The estimating department uses these records to prepare estimates of future jobs. When the financial manager prepares these accrual entries, the manager should consider the impact these accruals have on job cost records.

If accrual entries impact the usefulness of the job cost records to the estimating department, the financial manager should implement procedures to ensure that the accruing of job cost expenses does not interfere with the use of the records by the estimating department.

Management Accounting: Chapter 8

Beyond simply showing consideration for the other members of the management team, previewing information regarding various departments with the managers of those departments will help ensure the accuracy and reliability of information.

The financial manager should ensure that internal financial reports are a resource to all members of the management team. While it is incumbent upon the financial manager to be an effective member of the management team, it is equally incumbent upon the financial manager to ensure the integrity and reliability of the financial information.

Profitability The financial manager is responsible for monitoring and accurately reporting company profitability. This task may be divided into four components: Job Profitability The financial manager should ensure that margins on jobs are maximized through cost recovery.

The clearest example is time and material contracts, under which the contractor bills allowable costs to the customer, with a percentage or stipulated amount added for overhead and profit.

Financial accounting theory chapter 4 answers

For these contracts, neglecting to record an allowable job cost has the same effect as neglecting to bill for the costs, overhead and profit involved.This is Chapter 9 of Management Accounting: Concepts, Techniques, and Controversial Issues. test bank chapter 4 financial accounting theory an For Later.

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Job Profitability

Solution Manual for Financial Accounting Theory and Analysis Text and Cases, 11th Edition. test bank chapter 6-financial accounting theory and analysis. Documents Similar To test bank chapter 4 financial 1/5(1). January 22, | Hudson Admin. January 22, | Hudson Admin.

January 22, | Hudson Admin. A firm's capital structure is the composition or 'structure' of its liabilities. For example, a firm that has $20 billion in equity and $80 billion in debt is said to be 20% equity-financed and 80% debt-financed.

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Updated and revised, this tenth edition helps accountants build strong critical thinking skills and a sound theoretical background. This enables them to evaluate accounting practice in today's increasingly global world economy.

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