Chapter One

1
Class Exercise 1-1 Accounting Information

• Company XYZ is a retail clothing store with
  locations throughout the country. The store
  specializes in mens clothing. Assume a store in
  Decatur, Georgia makes a sale of a 500 suit to a
  customer.
• Required For the sale above, list different
  types of accounting information that the company
  may want to capture in the accounting information
  system.

2
Class Exercise 1-1 Accounting Information

• Record Sales Revenue
• Record Payment Cash or Credit
• Record Sales Tax Liability
• Update Inventory account
• Record Cost of Goods Sold (Inc/State)
• Update Gross Profit and (Inc/State)

3
Class Exercise 1-1 Accounting Information

• Sales by product line (mens suits)
• Sales by specific store
• Sales by geographic region
• Sales by salesperson
• Sales commissions

4
Class Exercise 1-1 Accounting Information

• Customer satisfaction information
• Re-order point for new inventory
• Sales return information
• Customer survey information (zip code, telephone
  , advertising, etc.)

5
Class Exercise 1-2 Planning, Operating or
Controlling Activity?

• Preparing sales projections for the next twelve
  months
• Planning
• Buying supplies to be used in the warehouse
• Operating

6
Class Exercise 1-2 Planning, Operating or
Controlling Activity?

• Deciding whether to open a new production
  facility
• Planning (long-term)
• Deciding to have a 50 percent off sale for next
  weekend
• Operating (day to day type decision)
  

7
Class Exercise 1-2 Planning, Operating or
Controlling Activity?

• Preparing a budget of expected revenue and
  expenses for next year
• Planning
• Identifying differences between actual and
  budgeted expenses
• Controlling (were goals met)

8
Class Exercise 1-2 Planning, Operating or
Controlling Activity?

• Providing feedback to management regarding the
  results of the business
• Controlling (monitor performance)
• Deciding whether to open a new retail store
  location
• Planning (long-term)

9
Class Exercises Summary

• The main role of the managerial accountant is to
  prepare, analyze, and interpret information,
  both (1) financial and (2) non-financial, to
  support the decision-making process in a business
  organization.

10
Value-Added or Non-Value-Added?

• Engineer designs product improvement
• Value-Added

11
Value-Added or Non-Value-Added?

• Storage of completed product
• Non-Value-Added
• (Company should identify and try to minimize
  these costs)

12
Value-Added or Non-Value-Added?

• Assembling the product
• Value-Added

13
Value-Added or Non-Value-Added?

• Delivery of product to customer
• Value-Added

14
Value-Added or Non-Value-Added?

• Idle Time of Employees between work processes
• Non-Value-Added