Question

Each of the following is primarily either financial accounting or managerial accounting in nature.
i. Preparing an income statement for use in filing the company’s annual corporate tax return with the Canada Revenue Agency.
ii. Preparing an analysis of the profitability of each of the company’s three major product lines for the past three months. The analysis will be used to make decisions related to resource allocation, potential changes in marketing strategy, and production scheduling.
iii. Preparing a detailed schedule of accounts receivables balances that are more than 120 days past due to determine the allowance for doubtful accounts to be used in the year-end financial statements.
iv. Estimating customer satisfaction by calculating the dollar value of all products returned in the past month and comparing it to returns in the same month last year.
v. Preparing a detailed schedule of accounts receivables balances that are more than 120 days past due for only those customers who regularly purchase the company’s products. The purpose of the analysis is to identify potential changes to the credit terms offered to regular customers (e.g., payment due dates, interest on overdue balances).
Required:
For each item above, briefly explain whether it is primarily financial accounting or primarily managerial accounting in nature.


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  • CreatedJuly 08, 2015
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