ACCY201 Final Exam Core Concepts / Objectives Guide

A set of vocabulary flashcards encapsulating key accounting concepts and terms for ACCY201 exam preparation.

Absorption Costing

A costing method that includes all manufacturing costs (fixed and variable) in the cost of a product.

Variable Costing

A costing method that includes only variable costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of a product.

Relevant Cost

Costs that should be considered when making decisions because they will change depending on the decision.

Incremental Cost

The additional cost incurred when producing one more unit.

Opportunity Cost

The potential benefit that is given up when a choice is made.

Sunk Cost

A cost that has already been incurred and cannot be recovered.

Master Budget

A comprehensive financial plan for the entire organization over a specific time period.

Flexible Budget

A budget that adjusts to changes in activity levels.

Standard Cost

A predetermined cost that is used as a benchmark for measuring performance.

Contribution Margin

Sales revenue minus variable costs; used to cover fixed costs and generate profit.

Break-even Point (BEP)

The level of sales at which total revenues equal total costs, resulting in neither profit nor loss.

GAAP

Generally Accepted Accounting Principles, standards for financial reporting and accounting in the U.S.

Financial Accounting

The field of accounting concerned with the summary, analysis, and reporting of financial transactions.

Managerial Accounting

The field of accounting focused on providing information to managers for decision-making purposes.

Accrual Accounting

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash is exchanged.

Debits and Credits

The two fundamental aspects of double-entry bookkeeping where debits must equal credits.

T-Accounts

A graphical representation of individual accounts used in accounting to show the effects of transactions on accounts.