Types of adjusting entries and how to make them.

 James R. Martin, Ph.D., CMA Professor Emeritus, University of South Florida

Cost Accounting’s Changing Emphasis

Government and business supported apprenticeship programs are used to insure that the less capable high schoolstudents (academically) become functional members of society. In contrast, public schools are relatively weak in an individualistic system. For example, inthe U.S., the high-school drop out rate is around twenty-nine percent and apprenticeship programs are much less common. Although colleges arerelatively strong in the American individualistic system, many non-college bound students (the "neglected majority") do not receive a marketableeducation. Although a discussion of the reasons for these differences is not within the scope of this textbook, the skill levels ofindividuals entering the workforce is an important determinant of competitiveness for the organizations who rely upon their skills. It is alsoimportant for any organization contemplating a change from an individualistic to a team oriented system.


In a communitarian system, skills and training prior to employment are primarily viewed as the responsibility ofsociety. For example, strong high schools with very low drop out rates of six or seven percent are typical in Japan and West Germany.

In a communitarian system such as Japan, government policy is designed to increase investment and savings (through tightcredit controls) to generate long term growth in supply. However, in an individualistic system such as the United States, government policy is designedto promote as much competition as possible. Cooperation is viewed as detrimental to the economy because it leads to monopoly power. Thus, cooperation betweencompanies and industry groups is to a large extent illegal in the American individualistic system. U.S. government policy is also used to promote growth indemand through easy credit, as opposed to promoting substantive growth and improvement in the infrastructure.


5 points
1. Figure 2-1.
Concam Inc. manufactures television sets. Last month direct materials (electronic components, etc.) costing

How to Optimize the Performance of a System

5 points
1. Figure 2-1.
Concam Inc. manufactures television sets. Last month direct materials (electronic components, etc.) costing

The Key Driving Force in the Economy

Today there are few, if any pure systems. Although some have argued that by the year 2000 all workers would be part of ateam, it is likely that there will always be a mixture of cooperation and competition within any system. Until recently most Americancompanies have emphasized individual skills and performance. However, since 1980 many American organizations have redesigned their systems to emphasizecooperation and teamwork and to de-emphasize competition between individuals and segments within an organization.Currently the World Economic Forum ranks countries on the basis of 12 pillars of competitiveness. The 11th pillar is businesssophistication defined as follows: "Business sophistication concerns two elements that are intricately linked: the quality of a country’s overallbusiness networks and the quality of individual firms’ operations and strategies."

The Motivation for Work or Work Ethic

sales revenue
3 points
1. Figure 2-1.
Concam Inc. manufactures television sets. Last month direct materials (electronic components, etc.) costing

The Responsibility for Training Prior to Employment

Part 1 covers Financial Planning, Performance and Control:
Planning, budgeting, and forecasting
Performance management
Cost management
Internal controls