ATC Accounting test paper

Time: 3/ h
Q1: Define bank Reconciliation procedure?

Q2: define the CGS with step by steps?

01. Solving the following Example of (COGM).

A Company that manufactures furniture incurs the following costs:

Direct Materials: $100,000 client

Direct Labor: $50,000

Manufacturing Overhead: $60,000

Beginning WIP Inventory: $10,000

Ending WIP Inventory: $30,000

Q3: Describe limited forum, co-operation forum, non-profitable forum, private

forum?

Q4: define the account cycle with help of hierarchy?

Illustration.

1-Rent Received from kamran for six months while two months’ discount allowed
on dt.12.08.2017.

2- Aslam merchandise sale on Account 2000$.

3- Rent Revenue Received from service 300$.

4-salam paid 1500$ on his payable Account.

Prepared the journal l Entry with narration.

Q 5: Define the following?

1- Define Revenue with help of revenue equation.

Hint- total Revenue is 10000$.Expenditure is 3575$.
2- Differentiate between sundry credit and sundry debit Accounts?
3- Different between Account payable and accrued expense?
4- What is Per capita?
 5- What is the suspense account in trail balance?
6- Type of accounting Errors and omission?

What is Cost of Goods Manufactured (COGM)?

Cost of Goods Manufactured, also known to as COGM, is a term used in
managerial accounting that refers to a schedule or statement that shows the
total production costs for the company during a specific period of time.

Just like the name implies, COGM is the total costs incurred to manufacture
products and transfer them into finished goods inventory for actual retail.

The formula to calculate the COGM is:

Add: Direct Materials Used

Add: Direct Labor Used

Add: Manufacturing Overhead

Add: Beginning Work in Process (WIP) Inventory

Deduct: Ending Work in Process (WIP) Inventory

= COGM

Example calculation of Cost of Goods Manufactured (COGM)

This can be more clearly seen in a T-account. For example, let’s say that a
company that manufactures furniture incurs the following costs:

Direct Materials: $100,000

Direct Labor: $50,000

Manufacturing Overhead: $60,000

Beginning WIP Inventory: $10,000

Ending WIP Inventory: $30,000

Work in Process (WIP) Inventory

Beginning Balance 10,000 190,000*

Direct Materials 100,000

Direct Labor 50,000

Manufacturing Overhead 60,000

Ending Balance 30,000

With this information, we can solve for COGM, which is on the credit side of
the WIP Inventory T-Account.

COGM = 10,000 + 100,000 + 50,000 + 60,000 – 30,000 = $190,000*

Beginning Inventory + Inventory Purchases – End Inventory = Cost of Goods Sold

Final Cost of Goods Manufactured (COGM) formula

Schedule of Cost of Goods Manufactured

For the Year Ended December 31, 2017

Direct Materials

Beginning Raw Materials Inventory a

Add: Purchases of raw materials b

Deduct: Ending Raw Materials Inventory c

Direct Materials used in production d=a+b–c

Direct Labor e
Manufacturing Overhead f

Total Manufacturing costs g=d+e+f

Add: Beginning WIP Inventory h

Deduct: Ending WIP Inventory i

Cost of Goods Manufactured for the Year j=g+h–i

Add: Beginning Finished Goods Inventory k

Deduct: Ending Finished Goods Inventory l

Cost of Goods Sold m=j+k–l