Cost Accounting For Dummies
The world needs accountants. People who know how to do accounting make the business world go round. Accountants analyze and report on every aspect of a business.
Cost accounting can be the most difficult accounting topic to grasp. This area has a unique language — a set of terms that differ quite a bit from other areas of accounting. Students and business owners may find cost accounting more challenging than other areas of accounting.
I wrote Cost Accounting For Dummies because your ability to understand this material has a huge payoff. Every business can be improved using cost accounting. The concepts help you to lower costs and increase profits. I’m passionate about helping you learn more about these critical topics.
About This Book
Some cost accounting books overwhelm you with dozens of complex topics. Not Cost Accounting For Dummies. Here, I focus on the really important topics that are used the most often. Accounting knowledge is meaningful when you can use it to solve a problem.
As a friend of mine once said, “It’s hard to drink out of a fire hose,” so I pres-ent the material in this book in an easy-to-read reference format. The book is logically divided into parts. Each part contains several chapters that are divided into readable “chunks” or sections. This system avoids blasting you with information. Instead, topics are introduced at a steady (but not over-whelming) rate, with concepts building on one another, making the reading (and understanding) easier.
The great thing about the book is that you decide where to start and what to read. It’s a reference book. You can locate a topic in the table of contents or the index, read about it, and move on. Accountants love organization (most accountants place their pencils in order from shortest to longest). This book is organized to be a quick reference.
Conventions Used in This Book
I use the following conventions throughout the text to make information con-sistent and easy to understand:
✓ All web addresses appear in monofont.
✓ New terms appear in italic type and are closely followed by an easy-to-understand definition.
✓ Bold is used to highlight the action parts of numbered steps.
In accounting, sometimes two terms can mean the same thing. Here are some of those terms that you find in this book:
✓ Cost of sales has the same meaning as cost of goods sold.
✓ Sales and revenue mean the same.
✓ Indirect costs has the same meaning as overhead costs.
✓ Predetermined, budgeted, and planned all have the same meaning.
✓ Net income is also profit, for the purposes of this book.
This book discusses three of the four basic financial statements. The fourth statement, statement of retained earnings, isn’t covered. Three components of the statement — retained earnings, dividends, and net income — are addressed using the other three financial statements. So the fourth statement wasn’t needed. I cover financial statements in Chapter 6.
When numbers appear, I use numerals, not words. This is common in accounting books.
Finally, keep in mind that companies sell both products and services. Some companies are manufacturers, and some are retailers. You see examples from both perspectives throughout the book.
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|April 9, 2022|