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Credit Assignment

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• First Online: 01 January 2017
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• Claude Sammut 3  

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Structural credit assignment ; Temporal credit assignment

When a learning system employs a complex decision process, it must assign credit or blame for the outcomes to each of its decisions. Where it is not possible to directly attribute an individual outcome to each decision, it is necessary to apportion credit and blame between each of the combinations of decisions that contributed to the outcome. We distinguish two cases in the credit assignment problem. Temporal credit assignment refers to the assignment of credit for outcomes to actions. Structural credit assignment refers to the assignment of credit for actions to internal decisions. The first subproblem involves determining when the actions that deserve credit were taken and the second involves assigning credit to the internal structure of actions (Sutton  1984 ).

Consider the problem of learning to balance a pole that is hinged on a cart (Michie and Chambers  1968 ; Anderson and Miller  1991 ). The cart...

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Claude Sammut

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Sammut, C. (2017). Credit Assignment. In: Sammut, C., Webb, G.I. (eds) Encyclopedia of Machine Learning and Data Mining. Springer, Boston, MA. https://doi.org/10.1007/978-1-4899-7687-1_185

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Module 5: Job Order Costing

Introduction to accumulating and assigning costs, what you will learn to do: assign costs to jobs.

Financial and managerial accountants record costs of production in an account called Work in Process. The total of these direct materials, direct labor, and factory overhead costs equal the cost of producing the item.

In order to understand the accounting process, here is a quick review of how financial accountants record transactions:

Let’s take as simple an example as possible. Jackie Ma has decided to make high-end custom skateboards. She starts her business on July 1 by filing the proper forms with the state and then opening a checking account in the name of her new business, MaBoards. She transfers $150,000 from her retirement account into the business account and records it in a journal as follows:

For purposes of this ongoing example, we’ll ignore pennies and dollar signs, and we’ll also ignore selling, general, and administrative costs.

After Jackie writes the journal entry, she posts it to a ledger that currently has only two accounts: Checking Account, and Owner’s Capital.

Debits are entries on the left side of the account, and credits are entries on the right side.

Here is a quick review of debits and credits:

You can view the transcript for “Colin Dodds – Debit Credit Theory (Accounting Rap Song)” here (opens in new window) .

Also, this system of debits and credits is based on the following accounting equation:

Assets = Liabilities + Equity.

• Assets are resources that the company owns
• Liabilities are debts
• Equity is the amount of assets left over after all debts are paid

Let’s look at one more initial transaction before we dive into recording and accumulating direct costs such as materials and labor.

Jackie finds the perfect building for her new business; an old woodworking shop that has most of the equipment she will need. She writes a check from her new business account in the amount of $2,500 for July rent. Because she took managerial accounting in college, she determines this to be an indirect product expense, so she records it as Factory Overhead following a three-step process:

• Analyze transaction

Because her entire facility is devoted to production, she determines that the rent expense is factory overhead.

2. Journalize transaction using debits and credits

If she is using QuickBooks ® or other accounting software, when she enters the transaction into the system, the software will create the journal entry. In any case, whether she does it by hand or computer, the entry will look much like this:

3. Post to the ledger

Again, her computer software will post the journal entry to the ledger, but we will follow this example using a visual system accountants call T-accounts. The T-account is an abbreviated ledger. Click here to view a more detailed example of a ledger .

Jackie posts her journal entry to the ledger (T-accounts here).

She now has three accounts: Checking Account, Owner’s Capital, and Factory Overhead, and the company ledger looks like this:

In a retail business, rent, salaries, insurance, and other operating costs are categorized into accounts classified as expenses. In a manufacturing business, some costs are classified as product costs while others are classified as period costs (selling, general, and administrative).

We’ll treat factory overhead as an expense for now, which is ultimately a sub-category of Owner’s Equity, so our accounting equation now looks like this:

Assets = Liabilities + Owner’s Equity

147,500 = 150,000 – 2,500

Notice that debits offset credits and vice versa. The balance in the checking account is the original deposit of $150,000, less the check written for $2,500. Once the check clears, if Jackie checks her account online, she’ll see that her ledger balance and the balance the bank reports will be the same.

Here is a summary of the rules of debits and credits:

Assets = increased by a debit, decreased by a credit

Liabilities = increased by a credit, decreased by a debit

Owner’s Equity = increased by a credit, decreased by a debit

Revenues increase owner’s equity, therefore an individual revenue account is increased by a credit, decreased by a debit

Expenses decrease owner’s equity, therefore an individual expense account is increased by a debit, decreased by a credit

Here’s Colin Dodds’s Accounting Rap Song again to help you remember the rules of debits and credits:

Let’s continue to explore job costing now by using this accounting system to assign and accumulate direct and indirect costs for each project.

When you are done with this section, you will be able to:

• Record direct materials and direct labor for a job
• Record allocated manufacturing overhead
• Prepare a job cost record

Learning Activities

The learning activities for this section include the following:

• Reading: Direct Costs
• Self Check: Direct Costs
• Reading: Allocated Overhead
• Self Check: Allocated Overhead
• Reading: Subsidiary Ledgers and Records
• Self Check: Subsidiary Ledgers and Records
• Introduction to Accumulating and Assigning Costs. Authored by : Joseph Cooke. Provided by : Lumen Learning. License : CC BY: Attribution
• Colin Dodds - Debit Credit Theory (Accounting Rap Song). Authored by : Mr. Colin Dodds. Located at : https://youtu.be/j71Kmxv7smk . License : All Rights Reserved . License Terms : Standard YouTube License
• What the General Ledger Can Tell You About Your Business. Authored by : Mary Girsch-Bock. Located at : https://www.fool.com/the-blueprint/general-ledger/ . License : All Rights Reserved . License Terms : Standard YouTube License

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Credit Cost Calculator

Credit Cost:

About Credit Cost Calculator (Formula)

The Credit Cost Calculator is a tool designed to calculate the cost of credit based on the total credit amount and the credit rate. The credit cost represents the amount of money paid as interest or fees for borrowing a certain sum of money.

The formula used to calculate the credit cost is as follows:

Credit Cost = (Total Credit Amount * Credit Rate) / 100

In this formula, the total credit amount is measured in a specific currency (e.g., dollars, pounds), representing the total borrowed amount. The credit rate is expressed as a percentage and represents the interest rate or fee applied to the borrowed amount.

By inputting the total credit amount and the credit rate into the Credit Cost Calculator, the formula is applied to determine the cost of credit. The credit cost provides an estimate of the additional expense incurred due to borrowing funds.

The Credit Cost Calculator enables users to quickly compute the credit cost, providing valuable insights into the financial implications of borrowing. It can be useful for individuals and businesses to evaluate the affordability and suitability of credit options. Additionally, it can aid in comparing different credit offers from lenders to make informed decisions.

By utilising the Credit Cost Calculator, users can easily assess the financial impact of borrowing and make more informed choices regarding credit transactions.

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Cost of Credit

Jul 11, 2014

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Cost of Credit. Ch. 18-2 PoB 2011. Finding Interest. Interest – is the cost of using some one else’s money It is the amount of interest paid on a loan or charge account that should be clearly understood Principal (P) – amount of the loan

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• installment interest
• credit history
• finance charge
• payment table
• total dollar cost

Presentation Transcript

Cost of Credit Ch. 18-2 PoB 2011

Finding Interest • Interest – is the cost of using some one else’s money • It is the amount of interest paid on a loan or charge account that should be clearly understood • Principal (P) – amount of the loan • Interest Rate (R) - percent of interest charged or earned • Time (T) - length of time for which interest will be charged

Simple Interest • Simple Interest – usually occurs on single-payment loans • Interest = Principal x Rate x Time • I = P x R x • Time can occur in days and months

Maturity Dates • Maturity Date - the date on which the loan must be paid • When the time of the loan is stated in months, the date of maturity is the same day of the month on which the loan was made • When the time of the loan is stated in days, you must count the exact number of days to find the date of maturity

Installment Interest • Installment Loan – a loan that you repay in partial payments • Where each payment is an Installment • Gives the borrower a schedule of payments • You sign a promissory note for the total amount • Amortization Schedule – the payment table of principal and interest over time

Finance Charges • Annual Percentage Rate (APR) – is a disclosure required by law • States the percentage cost of credit on a yearly basis • Includes other charges that may be made • Service Fees – involve the time and money it takes a creditor to investigate your credit history, process your loan or charge account applications, and keep records of your payments and balances • Uncollectible Accounts - the cost of collecting from those who do not pay their accounts • May be passed on to other borrowers

Finance Charges • Total Dollar Charge – to make you aware of the total cost of credit • Federal law requires that the lender must tell you the finance charge • Finance Charge – is the total dollar cost of the credit, including interest and all other charges • Compare Credit Costs • Be sure to compare the total cost of credit among alternative sources • Check with several lenders and compare APRs • Shop around when getting a loan • Remember you are using future income when using credit

Review What three things are necessary to calculate interest? What does APR represent?

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Quizlet: How To Teach With It

Quizlet is a study set creation tool for students and teachers that gives lots of freedom to create

Recent updates

This article was updated in December 2023

Quizlet is part gaming platform, part quiz, and part teaching tool. Crucially, it's built with all three in mind and, as such, offers a superb balance that makes it a valuable tool to use in education.

This will adaptively learn and change to suit the student, making it a teaching assistant that can help instruct, but also assess the areas in which students may need help.

Quizlet offers visual materials, fill-in-the-blank-style games, and more. Importantly, the company points out that 90 percent of students who use it end up getting higher grades -- so it appears to work.

While this used to offer a lot of free materials, the pay structure has tightened up. But with the use of AI tools it also offers more resources than ever before.

Read on to find out everything you need to know about Quizlet for teachers.

• Best Tools for Teachers
• What is Google Classroom?

What is Quizlet?

At its most basic, Quizlet is a digital pop-quiz database. It features more than 300 million study sets, each one being like a deck of flash cards. It's also interactive, with the ability to create your own study set, or clone and edit those of others.

Verified Creators, as they're called, also create and share study sets. These come from curriculum publishers and educational institutions so you know they will be of a high caliber.

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Quizlet is sectionalized by subject so it can easily be navigated to find a specific study target. Lots of these use flashcard-style layouts that offer a prompt or question that the student can select to flip over to get the answer.

But there are various options that let you learn more from the same data in different ways. So you could select "learn" instead of "flashcards," and then the question would be given only with multiple choice answers, for a more active learning approach. 

What's new in Quizlet?

Quizlet is often updating what it has to offer and it now has a new design overhaul with the idea of making everything more engaging for students and teachers alike.

Some previously free-to-access sections are no longer there since both the Learn and the Test Modes requires you to have a Quizlet Plus account to get access.

The use of AI-powered tools has resulted in a huge amount of new materials available in recent months, and the company says that's only going to continue to grow.

How does Quizlet work?

Quizlet is broken down into several styles, including:

Flashcards are pretty self explanatory, like real ones, with a question on one side and the answer on the other.

Learn puts questions and answers into multiple choice-style quizzes that can be completed to get an overall result. This applies to images, too.

Spell will speak aloud a word and the student is then required to type out the spelling of it.

Test is an auto-generated mix of questions with written, multiple choice, and true-or-false answer options. 

Match has you pairing up correct words or a mix of words and images.

Gravity is a game that has asteroids with words coming at a planet you need to protect by typing out the words before they hit.

Live is a game mode that allows for multiple students to work collaboratively.

What are the best Quizlet features?

Quizlet has all those excellent modes that allow for a variety of ways to get information across for learning across a broad range of subjects. 

The smart adaptive nature of Quizlet is a really powerful feature. The Learn mode uses data from millions of anonymous sessions and then generates adaptive study plans designed to improve learning. 

Quizlet offers a lot of support for English language learners and students with learning differences. Select a word or definition, and it will be read aloud. Or, in the case of teacher accounts, attach your own audio recording. It's also possible to add visual learning aids to cards with specific images or custom diagrams. 

Quizlet has a plethora of media that can be used, including a huge pool of licensed Flickr photography. Music can also be added, allowing for very targeted learning. Or teachers may find something ideal that has already been created and is available in the selection of shared online quizzes.

Quizlet Live is superb as students are given codes and once they sign in they're randomly grouped for a game to start. For each question, a selection of possible answers appear on teammates' screens, but only one of them has the right answer. Students must work together to determine which is the correct one. At the end, a snapshot is provided for teachers to see how well the students have understood the material.

How much does Quizlet cost?

Quizlet is free to sign-up to and start using. 

For teachers, it's charged at $34 per year to get extra features, such as the ability to upload your own images and to record you own voice – both powerful options if you want the freedom to create your own study sets from scratch. 

Teachers can also track learner activity with formative assessments and homework as well. Teachers can also adapt Quizlet Live, organize classes, use the app, and have no ads.

Quizlet best tips and tricks

Play a game Use a game such as Gravity to help students learn the nature of this digital tool while learning and gaming at the same time.

Star terms Have students star terms so they can revisit them later, or star them yourself to draw attention to areas that need covering.

Use test mode Have students use test mode first so you can assess where they are on the subject before deciding what extra help may be necessary.

Luke Edwards is a freelance writer and editor with more than two decades of experience covering tech, science, and health. He writes for many publications covering health tech, software and apps, digital teaching tools, VPNs, TV, audio, smart home, antivirus, broadband, smartphones, cars and much more.

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4.7: Prepare Journal Entries for a Job Order Cost System

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Although you have seen the job order costing system using both T-accounts and job cost sheets, it is necessary to understand how these transactions are recorded in the company’s general ledger.

Journal Entries to Move Direct Materials, Direct Labor, and Overhead into Work in Process

Dinosaur Vinyl keeps track of its inventory and orders additional inventory to have on hand when the production department requests it. This inventory is not associated with any particular job, and the purchases stay in raw materials inventory until assigned to a specific job. For example, Dinosaur Vinyl purchased an additional \(\$10,000\) of vinyl and \(\$500\) of black ink to complete Macs & Cheese’s billboard. If the purchase is made on account, the entry is as shown:

As shown in Figure 4.5.2 , for the production process for job MAC001, the job supervisor submitted a materials requisition form for \(\$300\) in vinyl, \(\$100\) in black ink, \(\$60\) in red ink, and \(\$60\) in gold ink. For the finishing process for Job MAC001, \(\$120\) in grommets and \(\$60\) in finishing wood were requisitioned. The entry to reflect these actions is:

The production department employees work on the sign and send it over to the finishing/assembly department when they have completed their portion of the job.

The direct cost of factory labor includes the direct wages paid to the employees and all other payroll costs associated with that labor. Typically, this includes wages and the payroll taxes and fringe benefits directly tied to those wages. The accounting system needs to keep track of the labor and the other related expenses assigned to a particular job. These records are typically kept in a time ticket submitted by employees daily.

On April 10, the labor time sheet totaling \(\$30\) is recorded for Job MAC001 through this entry:

The assembly personnel in the finishing/assembly department complete Job MAC001 in two hours. The labor is recorded as shown:

Indirect materials also have a materials requisition form, but the costs are recorded differently. They are first transferred into manufacturing overhead and then allocated to work in process. The entry to record the indirect material is to debit manufacturing overhead and credit raw materials inventory.

Indirect labor records are also maintained through time tickets, although such work is not directly traceable to a specific job. The difference between direct labor and indirect labor is that the indirect labor records the debit to manufacturing overhead while the credit is to factory wages payable.

Dinosaur Vinyl’s time tickets indicate that \(\$4,000\) in indirect labor costs were incurred during the period. The entry is:

Dinosaur Vinyl also records the actual overhead incurred. As shown in Figure 4.4.3 , manufacturing overhead costs of \(\$21,000\) were incurred. The entry to record these expenses increases the amount of overhead in the manufacturing overhead account. The entry is:

The amount of overhead applied to Job MAC001 is \(\$165\). The process of determining the manufacturing overhead calculation rate was explained and demonstrated in Accounting for Manufacturing Overhead . The journal entry to record the manufacturing overhead for Job MAC001 is:

Journal Entry to Move Work in Process Costs into Finished Goods

When each job and job order cost sheet have been completed, an entry is made to transfer the total cost from the work in process inventory to the finished goods inventory. The total cost of the product for Job MAC001 is \(\$931\) and the entry is:

Journal Entries to Move Finished Goods into Cost of Goods Sold

When the sale has occurred, the goods are transferred to the buyer. The product is transferred from the finished goods inventory to cost of goods sold. A corresponding entry is also made to record the sale. The sign for Job MAC001 had a sales price of \(\$2,000\) and a cost of \(\$931\). These are the entries to record the transfer of goods and sale to the buyer:

The resulting accounting is shown on the company’s income statement:

Think It Through: Ongoing Overapplied Overhead

At the end of each year, manufacturing overhead is analyzed, and an adjusting entry is made to dispose of the under- or overapplied overhead. How would you advise a company that has had overapplied overhead for each of the last five years?

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