MA INTRO Flashcards
(27 cards)
What is the primary purpose of financial accounting?
To create financial statements for external users like investors, banks, and the government.
What is the primary purpose of managerial accounting?
To provide internal data to help managers make informed decisions.
Who uses financial accounting information?
Outsiders like investors, bankers, and the government.
Who uses managerial accounting information?
Insiders like employees and managers.
What type of information does financial accounting provide?
Consolidated, macro-level, historical financial data.
What type of information does managerial accounting provide?
Detailed, segmented, micro-level, real-time and future-oriented data.
Is financial accounting future-oriented?
No, it focuses on past performance.
Is managerial accounting future-oriented?
Yes, it includes budgeting and forecasting.
Does financial accounting need to be verifiable? Why?
Yes, to protect external users like investors from false or misleading information.
Does managerial accounting need to be verifiable?
No, it’s used for internal planning and projections, which can’t always be verified immediately.
What rules govern financial accounting?
GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards).
Is managerial accounting governed by external rules?
No, it’s flexible and tailored to internal decision-making needs.
Why might budgeting be considered optional in managerial accounting?
There’s no legal requirement, but it’s a sensible and beneficial business practice.
What are the three key functions of managers discussed?
Planning, Directing, and Controlling.
What does the ‘Planning’ function involve?
Setting objectives and deciding how to achieve them, like designing a new ride at a theme park.
What does the ‘Directing’ function involve?
Implementing plans and managing daily operations to stay on course.
What does the ‘Controlling’ function involve?
Monitoring results and making adjustments if plans are off track.
How is technology affecting management accounting?
Machine learning and data analytics are improving decision-making and efficiency.
Why are tech skills valuable for accountants today?
Big firms increasingly hire software engineers alongside accounting grads due to growing tech needs.
How is globalization impacting business competition?
Companies now compete globally, even small local businesses must operate efficiently.
How does globalization increase the importance of managerial accounting?
It helps businesses remain competitive through efficiency and strategic planning.
Why is ethics critical in accounting?
Accountants often handle sensitive, complex information and must be trustworthy.
What are the four ethical principles outlined?
Competence, Confidentiality, Integrity, and Credibility.
What does ‘Competence’ mean in accounting ethics?
Only do work you’re qualified to perform; ensure accurate and skilled delivery.
