1. What are the major differences between managerial
accounting and financial accounting?
2. a. Differentiate between a department with line
responsibility and a department with staff responsibility.
b. In an organization that has a Sales Department
and a Personnel Department, among others,
which of the two departments has (1) line responsibility and (2) staff responsibility?
3. What manufacturing cost term is used to describe
the cost of materials that are an integral part of the
manufactured end product?
4. Distinguish between prime costs and conversion
5. What is the difference between a product cost and
a period cost?
6. Name the three inventory accounts for a manufacturing business, and describe what each balance
represents at the end of an accounting period.
7. In what order should the three inventories of a
manufacturing business be presented on the balance sheet?
8. What are the three categories of manufacturing costs
included in the cost of finished goods and the cost
of work in process?
9. For a manufacturer, what is the description of the
account that is comparable to a merchandising business’s cost of merchandise sold?
10. How does the Cost of Goods Sold section of the income statement differ between merchandising and
• Describe materials inventory.
• Describe work in process inventory.
• Describe finished goods inventory.
• Describe the differences between merchandising and
manufacturing company balance sheets.
• Prepare a statement of cost of goods manufactured.
• Prepare an income statement for a manufacturing
• Describe a cost object.
• Classify a cost as a direct or an indirect cost for a cost
• Describe direct materials cost.
• Describe direct labor cost.
• Describe factory overhead cost.
• Describe prime costs and conversion costs.
• Describe product costs and period costs.
• Describe the differences between financial accounting
and managerial accounting.
• Describe the role of the management accountant in the
• Describe the role of managerial accounting in the