chapter 1 Flashcards
management accounting
measures, analyses, and reports financial and non-financial information, which is intended primarily to assist managers in fulfilling the goals of an organisation. it is considered an integral part of management.
financial accounting
focuses on external reporting directed by authoritative guidelines. organisations are required to follow these guidelines in their financial reports to outside parties.
cost accounting
measures and reports financial and non-financial information related to the organisation’s acquisition and consumption of resources. it provides information for both management and financial accounting. there’s no clear-cut distinction between management and cost accounting.
cost management
describes the actions managers undertake in the short-run and long-run planning and control of costs that increase value for customers and lower costs of products and services.
strategy
specifies how the organisation matches its capabilities with the opportunities in the marketplace. it describes how an organisation creates value for its customers while distinguishing itself from its competitors.
planning
choosing goals, predicting results for various ways of achieving those goals, and then deciding how to attain the desired goals.
budget
quantitative expression of a plan of action and an aid to the coordination and implementation of the plan.
control
covers both the action that implements the planning decision and deciding on performance evaluation and the related feedback that will help future decision-making.
management by exception
practice of concentrating on areas not operating as expected and placing less attention on areas operating as expected. it’s important to understand the reasons for the difference between actual and budgeted results.
variance
refers to the difference between the actual results and the budgeted amounts.
management control
primarily a human activity that tends to focus on helping individuals do their jobs better.
feedback
involves managers examining past performance and systematically exploring alternative ways to improve future performance. (can be used to track growth, search for alternative means of operating, change methods for making decisions, make predictions, change operations, or change the reward system).
scorekeeping
refers to the accumulation of data and the reporting of reliable results to all levels of management, eg. recording sales, purchases of materials, and payroll payments.
attention directing
attempts to make visible both opportunities and problems on which managers need to focus. should happen regarding all opportunities to add value to an organisation.
problem-solving
refers to the comparative analysis executed to identify the best alternatives in relation to the organisation’s goals.
