Management Accounting Flashcards
(24 cards)
What is accounting
Accounting is the process of identifying, measuring and communicating economic information
What is management accounting like
Management accounting is forward-looking, flexible, and internal
What is Financial Accounting like
Financial accounting is historical, regulated, and external
What are different cost allocation techniques
Different cost allocation techniques are:
- Absorption costing
- Marginal costing
What are the different decision-making tools
The different decision making tools are:
- Break-even analysis
- Relevant costing
- Make-or-buy decisions
- Investment appraisal
Who are the users of accounting information
Users of accounting information are:
- Internal
- External
Who are internal users
Internal users are parties within the organisation, mainly managers
Who are external users
External users are parties such as shareholders, creditors and regulatory agencies, tax officials, governments
Who does financial accounting serve
Financial accounting serves external users
Who does management accounting serve
Management accounting serves internal users, such as top executives, management, and administrators within organisations
Which accounts are companies required to produce
Companies are required to produce financial accounts
What do financial accounting reports describe
Financial accounting reports describe the whole of the organisation
What do management accounting reports focus on
Management accounting reports focus on reporting information for different parts of the business
How must financial accounting reports be prepared
Financial accounting reports must be prepared in accordance with generally accepted accounting principles
What do companies need to do to compete successfully in the business environment
To compete successfully businesses need to:
- Make customer satisfaction an overriding priority
- Adopting new management approaches
- Changing manufacturing systems
- Investing in AMT’s
What are the key success factors for customer satisfaction
Key success factors for customer satisfaction are:
- Cost efficiency
- High quality products and services
- Speedy response to customer requests
- Innovation
What is cost efficiency
Cost efficiency is reducing costs without reducing quality to gain a competitive edge
What is TQM
TQM is a term used to describe a situation where all business functions are involved in a process of continuous quality improvement
What does a speedy response time increase
A speedy response time increases customer satisfaction
What are the new approaches to management accounting
New approaches to management accounting are:
- Continuous improvement & benchmarking
- Employee empowerment
- Value chain analysis
What does continuous improvement aim to reduce
Continuous improvement aims to reduce costs, eliminate waste, and improve the quality and performance of activities that increase customer satisfaction
What is benchmarking
Benchmarking is a technique that is increasingly being adopted as a mechanism for achieving continuous improvement
What does empowering employees and giving them relevant information allow employees to do
By empowering employees and giving them relevant information they will be able to respond faster to customers and improve morale
What is value chain analysis
Value chain analysis is a means of increasing customer satisfaction and managing costs more effectively
