ACC210 Ch1 Set 1

Question 1

Management Accounting

Answer 1

the processes and techniques that focus on the effective use of organisational resources, to support managers in their tasks of enhancing both customer value and shareholder value

Question 2

Customer Value

Answer 2

the value that a customer places on particular features of a product

Question 3

Shareholder value

Answer 3

the value that shareholders, or owners, place on a business

Question 4

Management accounting system

Answer 4

an information system that produces the information required by managers to manage resources and to create value

Question 5

Operational managers

Answer 5

managers who have responsibility for manufacturing activities in manufacturing firms, or for service delivery areas in service firms

Question 6

Management accounting - Users of information?

Answer 6

Internal: managers and employees at all levels

Question 7

Management accounting - Regulations?

Answer 7

• No accounting standards or external rules are imposed - Information is generated to satisfy managers’ information needs

Question 8

Management accounting - Source of data?

Answer 8

both financial and non-financial data drawn from many sources - the core accounting system; physical and operational data from production systems; and market, consumer and economic data from databases external to the organisation

Question 9

Management accounting - Nature of the information?

Answer 9

past, current and future-orientated; subjective; relevant; timely; and supplied at various levels of detail to suit managers’ specific needs

Question 10

Financial accounting- Users of information?

Answer 10

external; shareholders, creditors, banks, stock exchange, trade unions and government agencies

Question 11

Financial accounting- Regulations?

Answer 11

accounting standards and corporations law regulate the content of external financial reports

Question 12

Financial accounting- Source of data?

Answer 12

financial data almost exclusively drawn from the organisation’s core transaction-based accounting system

Question 13

Financial accounting- Nature of the information?

Answer 13

past; reliable; verifiable; not timely; not always relevant; and highly aggregated

Question 14

Financial accounting

Answer 14

the practice of preparing and reporting accounting information for parties outside the organisation

Question 15

Costing system (cost accounting system)

Answer 15

a system that estimates the cost of goods and services, as well as the cost of organisational units, such as departments

Question 16

Strategy concepts?

Answer 16

• vision - mission statement - objectives - strategies

Question 17

Vision

Answer 17

the desired future state or aspiration of an organisation

Question 18

Mission statement

Answer 18

a statement that defines the purpose and boundaries of the organisation

Question 19

Objectives (goals)

Answer 19

specific statement of what the organisation aims to achieve, often quantified and relating to a specific period of time

Question 20

Objectives that businesses use?

Answer 20

• profitability - growth - cost minimisation - product leadership - innovation - product quality - quality of service - community service - employee welfare - environmental responsibility