A New Company
Christopher Smith
ACC/220
November 30th, 2012
Simone Williams

A New Company
In being hired into a new company to oversee the accounting department an individual would expect to see various types of financial reports. These various reports allow the individual to identify areas in need of improvement along with many other business decisions. The primary focus will be on the preparation of reports of managers and officers in the company. This will provide tools to assist in making business decisions and evaluating the effectiveness of the decisions being made (Kimmel, Weygandt, & Kieso, 2003). Among the reports in a financial department are the income statement, balance sheet, cost-volume-profit income statement, statement of cash flows, and a retained earnings statement. These types of financial reports are among the essential tools that are necessary in managerial accounting for business decision making.
The income statement can be a very useful tool to illustrate the company’s expenses such manufacturing costs. Here, three basic functions are illustrated as direct materials, direct labor, and manufacturing overhead. Beginning work in progress plus total current manufacturing costs gives the manger a distinct view of the total cost of work in progress. In addition to this, the manager can evaluate the cost of manufacturing goods by subtracting the ending work in process from the total work in progress. This and other types of financial statements such as a balance sheet provide managers with data on the efficient use of the company’s manufacturing and service resources.
The balance sheet can be utilized to examine assets and account for inventory. Raw materials inventory will, work in progress inventory, and finished goods inventory can provide useful information. Showing costs of raw materials, costs applicable to partially completed