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D196 |Questions with 100% Correct
Answers | Updated & Verified |
2025 \ 2026
Absolute Cell Reference - ✔✔A cell reference that remains constant when a formula is pasted into a new cell.
Account - ✔✔An accounting record in which the results of transactions are accumulated; shows increases, decreases, and a balance.
Accounting - ✔✔A system for providing quantitative, financial information about economic entities that is useful for making sound economic decisions. Accounting provides the means of recording and communicating business activities and the results of those activities.
Accounting Cycle - ✔✔The procedure for analyzing, recording, summarizing, and reporting the transactions of a business.
Accounting Equation - ✔✔An algebraic equation that expresses the relationship between assets (resources), liabilities (obligations), and owner's equity (net assets, or the residual interest in a business after all liabilities have been met): Assets = Liabilities + Owners' Equity.
Accounting System - ✔✔The procedures and processes used by a business to analyze transactions, handle routine bookkeeping tasks, and structure information so it can be used to evaluate the performance and health of the business.
Activity-based Costing (ABC) - ✔✔A method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs.
Actual Manufacturing Overhead - ✔✔Manufacturing costs other than direct materials and direct labor.
American Institute of Certified Public Accountants (AICPA) - ✔✔A professional organization for CPAs in which membership is voluntary.
Annual Report - ✔✔A document that summarizes the results of operations and financial status of a company for the past year and outlines future plans.
Applied Manufacturing Overhead - ✔✔The amount of the manufacturing overhead that is assigned to the goods produced. This is usually done by using a predetermined annual overhead rate.
Arm's-length Transaction - ✔✔A transaction in which a buyer and seller act independently to get the best possible deal.
Articulation - ✔✔The interrelationships among the financial statements.
Assets - ✔✔Economic resources that are owned or controlled by a company.
Balance Sheet - ✔✔A summary of the financial position of a company at a particular date.
Batch-level Activities - ✔✔Activities that take place in order to support a batch or production run, regardless of the size of the batch.
Certified Public Accountant (CPA) - ✔✔An accountant who has met specified professional requirements established by the AICPA and local and state societies. A key service provided by CPAs is the performance of independent audits of financial statements.
Classified Balance Sheet - ✔✔A balance sheet that distinguishes between current and long-term assets.
Comparative Financial Statements - ✔✔Financial statements that include information for both the current year and preceding year(s) that are prepared for users to identify any significant changes in particular items.
Contribution Margin - ✔✔The difference between total sales and variable costs; the portion of sales revenue available to cover fixed costs and provide a profit.
Contribution Margin Ratio - ✔✔The percentage of net sales revenue left after variable costs are deducted; the contribution margin divided by net sales revenue.
Controllable Costs - ✔✔Costs over which a manager has direct authority and can change.
Controlling - ✔✔Tracking the actual performance of a company.
Cost Accountant - ✔✔An accountant who is specially trained to prepare and analyze accounting information for internal decision-making.
Cost Behavior - ✔✔The way a cost is affected by changes in activity levels.
Cost Center - ✔✔An organizational unit in which a manager has control over and is held accountable for cost performance.
Cost Drivers - ✔✔A numerical measure used to reflect the amount of a specific cost that is associated with a particular activity.
Cost Objects - ✔✔An output of a business, such as a product, service, or division.
Cost Pool - ✔✔Total cost being generated by a specific overhead cost activity.
Cost Variance - ✔✔A difference between the actual cost and the budgeted cost.
Cost of Goods Manufactured Statement - ✔✔A schedule supporting the income statement that summarizes the total cost of goods manufactured and transferred out of the work-inprocess inventory account during a period. These costs include direct materials, direct labor, and applied manufacturing overhead.
Cost of Goods Sold Statement - ✔✔A statement that sums the cost of goods sold for an accounting period based on the cost of goods sold formula.
Cost-volume-profit (C-V-P) Analysis - ✔✔Techniques for determining how changes in revenues, costs, and level of activity affect the profitability of an organization.
Earnings (Loss) Per Share (EPS) - ✔✔The amount of net income (earnings) related to each share of stock; computed by dividing net income by the number of shares of stock outstanding during this period.
Economy of Scale - ✔✔A pattern of decreasing costs per unit as unit volume increases.
Estimated Manufacturing Overhead - ✔✔Budgeted manufacturing overhead costs that are used to establish the predetermined overhead rate.
Ethics - ✔✔The basic moral principles that govern an individual's behavior.
Evaluating - ✔✔Analyzing results, rewarding performance, and identifying problems.
Expenses - ✔✔The amount of assets consumed through business operations; the costs incurred in normal business operations to generate revenues.
External Transaction - ✔✔An exchange that occurs between a company and an external party and that is recorded in the financial records of the company.
Financial Accounting - ✔✔The area of accounting concerned with reporting financial information to interested external parties.
Financial Accounting Standards Board (FASB) - ✔✔The organization responsible for studying accounting issues and establishing accounting standards to govern financial reporting in the United States.
Financial Statement Analysis - ✔✔The examination of both the relationships among financial statement numbers and the trends in those numbers over time.
Financial Statements - ✔✔Reports such as the balance sheet, income statement, and statement of cash flows, which summarize the financial status and results of operations of a business entity.
Financing Activities - ✔✔Activities whereby cash is obtained from or repaid to owners and creditors.
Finished Goods Inventory - ✔✔Inventory that has completed the production process and is ready for sale to customers.
Fixed Costs - ✔✔Costs that remain constant in total, regardless of activity level, over a certain range of activity.
Form 10-K - ✔✔A form required by the SEC for businesses to report a comprehensive summary of financial perfomance, including the three primary financial statements.
Form 10-Q - ✔✔Quarterly financial reports that publicly traded companies must file with the SEC.
Gains - ✔✔Money made on activities outside the normal business of a company.
Generally Accepted Accounting Principles (GAAP) - ✔✔Authoritative guidelines that define accounting practice at a particular time in the United States.
Internal Revenue Service (IRS) - ✔✔A government agency that prescribes the rules and regulations that govern the collection of tax revenues in the United States.
Internal Transaction - ✔✔A transaction that occurs within a company, does not involve an external party, and is not recorded in the company's financial records.
International Accounting Standards Board (IASB) - ✔✔A committee formed to develop international accounting standards.
Investing Activities - ✔✔Activities associated with buying and selling long-term assets.
Investment Center - ✔✔An organizational unit in which a manager has control over and is held accountable for cost, revenue, and asset performance.
Job - ✔✔An individual product produced or service rendered in a job order costing system.
Job Order Costing - ✔✔A method of product costing whereby each job, product, or batch of products is costed separately.
Liabilities - ✔✔Obligations to pay cash, transfer other assets, or provide services to someone else.
Liquid - ✔✔Assets that are in the form of cash or can be easily converted into cash.
Long-term Assets - ✔✔Assets that are illiquid and that are needed to operate a business over an extended period of time.
Long-term Liabilities - ✔✔Liabilities that are not expected to be satisfied within a year.
Losses - ✔✔Money lost on activities outside the normal business of a company.
Management Accounting - ✔✔The area of accounting concerned with providing internal financial reports to assist management in making decisions.
Manufacturing Business - ✔✔Any organization whose main economic activity involves using components or raw materials to make finished goods for sale to customers.
Manufacturing Overhead - ✔✔All costs incurred in the manufacturing process other than direct materials and direct labor.
Manufacturing Overhead Budget - ✔✔A schedule of production costs other than those for direct labor and direct materials.
Market Value - ✔✔The value of a company as measured by the number of shares of stock outstanding multiplied by the current market price of the stock; the current value of a business.
Master Budget - ✔✔A network of many separate schedules and budgets that together constitute the overall operating and financing plan for the coming operating period.
Opportunity Costs - ✔✔The benefits lost or forfeited as a result of selecting one alternative course of action over another.
Out-of-pocket Costs - ✔✔Costs that require an outlay of cash or other resources.
Overapplied Manufacturing Overhead - ✔✔The excess of applied manufacturing overhead (based on a predetermined application rate) over the actual manufacturing overhead costs for a period.
Owners' Equity - ✔✔The remaining claim against the assets of a business after the liabilities have been deducted.
Per-unit Contribution Margin - ✔✔The excess of the sales price of one unit over its variable costs.
Period Costs - ✔✔Costs not directly related to a product, service, or asset. They are charged as expenses to the income statement in the period in which they are incurred.
Planning - ✔✔Outlining the activities that need to be performed for an organization to achieve its objectives.
Primary Financial Statements - ✔✔The balance sheet, income statement, and statement of cash flows, which are used by external groups to assess a company's economic standing.
Pro Forma Financial Statements - ✔✔Financial statements that show a forecast of a company's future performance based on certain assumptions rather than historical data.
Process Costing - ✔✔A method of product costing whereby costs are accumulated by process or work centers and averaged over all products manufactured in a center or department during a production period.
Product Costs - ✔✔Costs associated with products or services offered.
Product-line Activities - ✔✔Activities that take place in order to support a product line, regardless of the number of batches or individual units produced.
Production Budget - ✔✔A schedule of production requirements for the budget period.
Production Prioritizing - ✔✔Management's continual evaluation of various product lines and division profitability in order to analyze and identify opportunities to improve profits.
Profit Center - ✔✔An organizational unit in which a manager has control over and is held accountable for both cost and revenue performance.
Raw Materials Inventory - ✔✔Inventory of raw materials that have not yet begun the production process.
Relative Cell References - ✔✔A cell reference that automatically updates when a formula is pasted into a new cell.
Sales Budget - ✔✔A schedule of projected sales over the budget period, which often includes a measure of revenue earned and cash collected from customers.
Securities and Exchange Commission (SEC) - ✔✔The government body responsible for regulating the financial reporting practices of most publicly owned corporations in connection with the buying and selling of stocks and bonds.
Segment - ✔✔A subsection of a company that is distinct from the whole of the company based on its operational activities, customers, or geographic location.
Segment Margin Statement - ✔✔A profit and loss statement that identifies costs directly chargeable to a segment and further divides them into variable and fixed cost behavior patterns.
Segment Margins - ✔✔The difference between segment revenue and direct segment costs; a measure of the segment's contribution to cover indirect fixed costs and provide costs; in effect, the operating profit created by the segment.
Segment-margin Ratios - ✔✔The segment margin divided by the segment's net sales revenue; a measure of the efficiency of the segment's operating performance and, therefore, its profitability.
Segments - ✔✔Parts of an organization requiring separate reports for evaluation by management.
Selling and Administrative Expense Budget - ✔✔A schedule of all nonproduction spending expected to occur during the budget period.
Service Business - ✔✔Any organization whose main economic activity involves producing a nonphysical product that provides value to a customer.
Shareholders - ✔✔Those who own a corporation by owning shares of stock in that corporation; also called stockholders.
Statement of Cash Flows - ✔✔The financial statement that reports the amount of cash collected and paid out by a company during a period of time.
Statement of Retained Earnings - ✔✔A financial statement that identifies the changes in accumulated investments by owners and earnings or profits since day one.
Stepped Costs - ✔✔Costs that change in total in a stair-step fashion (in large amounts) with changes in volume of activity.
Stockholders - ✔✔Those who own a corporation by owning shares of stock in that corporation; also called shareholders.
Stockholders' Equity - ✔✔The owners' equity section of a corporate balance sheet.
Sunk Costs - ✔✔Costs that are past costs and do not change as a result of a future decision.
Target Income - ✔✔A profit level desired by management.
