_____focuses on an organization's internal financial processes

Primary users are Internal—the company’s managers and employees

Primary users are External—investors, creditors, and government authorities

Help investors and creditors make investment and credit decisions

Help managers and employees plan and control operations

Concern about how reports will affect employee behavior

Concern about adequacy of disclosures; behavioral implications are secondary

A company that sells —time, skills, and/or knowledge—instead of products.

A company that resells products previously bought from suppliers

A company that uses labor, equipment, supplies, and facilities to convert raw materials into finished products.

They carry no inventories of products for sale and all of their costs are period costs

Cost of Goods Sold

Service companies’ product costs include the cost to purchase the merchandise inventory (product cost) + incoming freight costs

Prime costs combine the direct costs of

Conversion costs combine the direct costs of

The cost of goods sold is subtracted from net sales revenue to determine

subtracting the period costs, the selling and administrative expenses from gross profit to determine

For a manufacturing company, if the rent is for the corporate office, it is still a period cost. However, if the rent is for the factory, then it is a product cost because it is a cost incurred in the manufacturing process.

Property taxes and insurance on office is