CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 4-1 Responsibility Accounting for a Merchandising Business

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Chapter 4 Objectives Financial Reporting for a Departmentalized Business After studying Chapter 4, you will be able to: Define accounting terms related to cost accounting and financial reporting for a departmentalized merchandising business. Identify accounting concepts and practices related to cost accounting and financial reporting for a departmentalized merchandising business. Distinguish between direct and indirect expenses. Prepare an interim departmental statement of gross profit. Prepare a work sheet for a departmentalized merchandising business. Prepare financial statements for a departmentalized merchandising business. Analyze financial statements using selected component percentages. Complete end-of-period work for a departmentalized merchandising business. 2 LESSON 4-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 4-1 fiscal period: the length of time for which a business summarizes and reports financial information responsibility accounting: assigning control of business revenues, costs, and expenses as a responsibility of a specific manager direct expense: an operating expense identifiable with and chargeable to the operation of a specific department indirect expense: an operating expense chargeable to overall business operations and not identifiable with a specific department 3 LESSON 4-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Lesson 4-1 fiscal period: the length of time for which a business summarizes and reports financial information departmental margin: the revenue earned by a department less its cost of merchandise sold and less its direct expenses departmental margin statement: a statement that reports departmental margin for a specific department 4 LESSON 4-1

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON 4-1 RECORDING A DIRECT EXPENSE page 90

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 4-1 RECORDING AN INDIRECT EXPENSE page 90

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 4-1 DEFINE TERMS REVIEW In Quizlet fiscal period responsibility accounting direct expense indirect expense departmental margin departmental margin statement page 91 Create: Chapter 4 AdvAcc (then SAVE)

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Exit Ticket for today: Audit Your Understanding What two features are required if responsibility accounting is to be successful? 2.For what type of accounts does Zytech have separate departmental accounts in the general ledger? 3.In order to ensure the features of a responsibility accounting system, what should be done if a direct expense used by different departments is documented by a single invoice? 8 LESSON 4-1 In a Word Document, SaveAS: Chapter4-1AYUYourName And drop in my Inbox today!

CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Complete the following assignments for Chapter 4-1 today Define Terms Review on page 91. Answer Audit Your Understanding questions on page 91. Complete Work Together 4-1 on Aplia – page 91. Complete On Your Own 4-1 on Aplia – page 92. Complete Application Problem 4-1 on Aplia – page LESSON 4-1