Manager and Management Accounting Flashcards
(243 cards)
1
Q
Measures, analyzes, and reports financial and nonfinancial information that helps managers make decisions to fulfill organizations goals.
A
Management Accounting
2
Q
Need not to be GAAP compliant.
A
Management Accounting
3
Q
Managers use this to develop, communicate, and implement strategies, coordinate product design, production, and marketing decisions and evaluate a company’s performance.
A
Management Accounting Information
4
Q
It focuses on reporting financial information to external parties such as investors, government agencies, banks, and suppliers, based on GAAP.
A
Financial Accounting
5
Q
Measures, analyzes and reports financial and nonfinancial information related to the costs of acquiring or using resources in an organization.
A
Cost Accounting
6
Q
It part of the information collected to make management decisions.
A
Cost Information
7
Q
The purpose of information is to help managers make decisions to fulfill an organization’s goals.
A
Management Accounting
8
Q
The primary users of management accounting are:
A
Managers of the organization
9
Q
The focus and emphasis of management accounting is..
A
It is future-oriented.
10
Q
The rules and measurement of reporting for management accounting is..
A
Internal measures and reports do not have to follow GAAP.e
11
Q
The internal measures and reports of management accounting are based on..
A
Cost-benefit analyses
12
Q
The time span of reports management accounting use…
A
Varies from hourly information to 15 to 20 years.
13
Q
The type of reports management accounting use
A
Financial and nonfinancial reports on products, departments, territories, and strategies.
14
Q
The behavioral implications of management accounting is..
A
Designed to influence the behavior of managers and employees
15
Q
Its purpose is to communicate an organization’s financial position to investors, banks, regulators, and other external parties.
A
Financial accounting
16
Q
Its external users are investors, banks, regulators, and suppliers.
A
Financial Accounting
17
Q
It is past-oriented. Reports on 2016 performance prepared in 2017.
A
Financial Accounting
18
Q
It must be prepared in accordance with GAAP.
A
Financial AccountingF
19
Q
Financial accounting reporting must be certified by?
A
External, independent auditors
20
Q
How are the financial reports of financial accounting are prepared?
A
Annually and quarterly reports, primarily on the company as a whole.
21
Q
It primarily reports economic events but also influences behavior because manager’s compensation is often based on reported financial results.
A
Financial Accounting
22
Q
It specifies how an organization matches its own capabilities with the opportunities in the marketplace
A
Strategy
23
Q
What are the two broad strategies?
A
Cost leadership and product differentiation
24
Q
It describes cost management that specifically focuses on strategic issues
A
Strategic Cost Management
25
It helps managers formulate strategy by answering questions like who are the company's most important customers, what is the bargaining power of both supplier and customers, what substitute products exist and how do they differ, and if how the strategy is to be funded.
Management accounting information
26
Creating _______ is an important part of planning and implementing strategy.
Value
27
It is the usefulness a customer gains from a company's product or service.
Value
28
It determines the value a customer derives from a product.
Customer experience
29
It is the sequence of business functions by which a product is made progressively more useful to customers.
Value Chain
30
Which of the following is consist the value chain?
i. Research and Development
ii. Design of Products and Processes
iii. Marketing
iv. Distribution
v. Customer Service
All of the above
31
It deals with generating and experimenting with ideas related to new products, services, or processes.
Research and Development
32
It is the detailed planning, engineering, and testing of products and processes.
Design of products and processes
33
It is the procuring, transporting and storing and coordinating and assembling resources to produce a product or deliver a service.
Production
34
It is a term for the procuring, transporting, and storing resources.
Inbound Logistics
35
It is the coordinating and assembling of resources to produce a product or deliver a service.
Operations
36
It includes promoting and selling products or services to customers or prospective customers.
Marketing
37
It is providing after-sales services to customers
Customer Service
38
The processing of orders and shipping products or services to customers.
Distribution
39
The processing of orders and shipping products or services to customers in the distribution function of the business is also called?
Outbound Logistics
40
It is a strategy that integrates people and technology in all business functions to deepen relationships with customers, partners, and distributors.
Customer Relationship Management
41
It is a strategy that profit and grow by providing quality products or services at low prices and by judiciously managing their costs.
Cost Leadership Strategy
42
It is a strategy that generate profits and growth by offering differentiated or unique products or services that appeal to their customers and are often priced higher than competitors.
Product Differentiation Strategy
43
CRM initiatives use of __________ to coordinate all customer-facing activities and design and production activities necessary to get products to customers.
Technology
44
Parts of the value chain associated with producing and delivering a product or service.
Production and Distribution
45
Production and distribution function together are known as the...
Supply Chain
46
It describes the flow of goods, services, and information from the initial source to their delivery regardless of whether the activities occur in one or multiple organizations.
Supply Chain
47
What are the five key success factors?
Cost and efficiency, quality, time, innovation, and sustainability
48
To achieve _______ managers eliminate some activities and reduce costs of performing other activities in all value-chain functions.
Target cost
49
It is the reduction of overall costs and improving efficiency to generate more income.
Cost and efficiency
50
An integrative philosophy of management for continuously improving the quality of products and processes.
Total Quality Management
51
It has many dimensions.
Time
52
The time it takes for companies to create new products or services and bring them to the market.
New-product Development Time
53
It describes the speed at which an organization respond to customer requests.
Customer-response Time
54
It is the primary cause of delays.
Bottlenecks
55
A point of congestion in a production system that prevents it from functioning at full speed.
Bottleneck
56
It when the work to be performed on a machine or facility exceeds its available capacity.
Bottleneck
57
Its constant flow is the basis for the ongoing success of a company.
Innovation
58
It is applying the key success factors of cost and efficiency, quality, time and innovation to promote ___________.
Sustainability
59
The development and implementations of strategies to achieve long-term financial, social, and environmental goals.
Sustainability
60
It serves as a benchmark managers use to continuously improve their operations.
Competitive Information
61
The Five-Step Decision-Making Process.
A. Identify the problem and uncertainties
B. Obtain Information
C. Make predictions of the future
D. Make decisions by choosing among the alternatives
E. Implement the decision, evaluate performance, and learn
62
It consists of selecting an organization's goals and strategies.
Planning
63
It predicting results under various alternative ways of achieving those goals.
Planning
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It is communicating the goals and how to achieve them to the entire organization.
Planning
65
They serve as business partners in these planning activities because they understand key success factors and what creates value.
Management Accountant
66
What is the role of the five-step decision-making process?
Planning and control of operations and activities
67
How do management accountants help firms make strategic decisions?
By providing information about the sources of competitive advantage
68
The quantitative expression of a proposed plan of action by the management and is an aid to coordinating what needs to be done to execute the plan.
Budget
69
The most important planning tool when implementing strategies.
Budget
70
It comprises taking actions that implement the planning decision, evaluating past performance, and providing feedback and learning.
Control
71
Helps management accountants provide the most value to the strategic and operational decision making of their companies.
Management Accounting Guidelines
72
Compares the benefits of an action/purchase to the costs. The benefits should exceed the costs.
Cost-benefit Approach
73
Recognizes that management is primarily a human activity that should focus on encouraging individuals to do their jobs better.
Behavioral and technical considerations
74
Managers use alternative ways to compare costs in different decision-making situations because there are ________.
Different costs for different purposes
75
Helps managers make wise economic decisions by providing desired information in an appropriate format and at a preferred frequency.
Technical considerations
76
Are directly responsible for achieving the goals of the organization.
Line Management
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Provides advice, support, and assistance to line management.
Staff Management
78
Includes production, marketing and distribution management.
Line Management
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Includes management accountants, information technology, and human resource management.
Staff Management
80
The chief financial officer is also called the _______.
Finance Director
81
He is responsible for overseeing the financial operations of an organization.
Chief Financial Officer
82
What are the six responsibilities of a CFO?
Controllership
Tax
Treasury
Risk Management
Investor Relations
Strategic Planning
83
Provides financial information for reports to managers and shareholders and oversees the overall operations of the accounting system.
Controllership
84
Plans income taxes, sales taxes, and international taxes.
Taxes
85
Oversees banking and short and long-term financing, investments, and cash management.
Treasury
86
Manages the financial risk of interest and exchange rate changes and derivatives management.
Risk Management
87
Communicates with, responds to, and interacts with shareholders.
Investor Relation
88
Defines strategy and allocates resources to implement strategy.
Strategic Planning
89
The controller is also known as?
Chief Accounting Officer
90
The financial executive primarily responsible for management accounting and financial accounting.
Controller
91
The controller exercises control by?
By reporting and interpreting relevant data
92
A staff manager that reports to the CEO
CFO
93
Value is quickly destroyed by?
Unethical behavior
94
True or False. The statement of ethical professional practice
stipulates that members of IMA shall behave ethically. A commitment to the ethical professional practice includes overarching principles that express our values, and standards that guide our conduct.
True
95
It was passed in the United States as a response to a series of corporate scandals.
Sarbanes-Oxley legislation 2002
96
The Sarbanes-Oxley legislation authorizes this to oversee, review, and investigate the work of auditors.
Public Company Accounting Board
97
Employees that report violations of illegal and unethical acts are called?
Whistleblowers
98
The four overarching principles are?
Honesty, Fairness, Objectivity, and Responsiblity
99
The Standards of Ethical Behavior are?
Competence, Credibility, Confidentiality, and Integrity
100
The act Sarbanes-Oaxley focuses on improving?
Internal Controls
Corporate Governance
Monitoring of Managers
Disclosure Practices of Public Companies
101
A single database that collects data and feeds them into applications that support a company's business activities.
ERP System
102
All businesses are concerned about?
Cost and revenues
103
A resource sacrificed to achieve a specific objective.
Cost
104
Usually measures as a monetary amount that must be paid to acquire cost of goods sold.
Cost
105
Cost incurred that is considered historical or past cost.
Actual Cost
106
A predicted, forecasted cost.
Budgeted Cost
107
Anything for which a measurement is desired.
Cost Object
108
A cost system determine the costs of various cost objects in two stages:
Accumulation followed by Assignment
109
The collection of cost data in some organized way by mean of an accounting system
Cost Accumulation
110
Favorable means?
Not exceeding the budget.
111
Unfavorable means?
Exceeding the budget.
112
Related to the particular cost object and can be traced to it.
Direct Costs
113
Used to describe the assignment of direct costs to a particular cost object.
Cost Tracing
114
Related to the particular cost object but cannot be traced to it.
Indirect Costs
115
Used to describe the assignment of indirect costs to a cost object.
Cost Allocation
116
General term that encompasses both tracing and allocation of direct and indirect costs.
Cost Assignment
117
What are the factors affecting direct and indirect costs?
Materiality of the cost
Available information-gathering technology
Design of Operations
118
The smaller the amount of the cost, the less likely it is cost-effective to trace it.
Materiality Of the Cost
119
Improvements in information-gathering technology make it possible to consider more and more costs as ___________.
Direct costs, availability of information-gathering technology
120
Classifying a cost as direct is easier if the facility is used exclusively for a specific cost object.
Design of Operations
121
Can maybe both direct cost of one cost object and indirect cost to another.
Specific Cost
122
The classification depends on the?
Choice of cost object.
123
Records the cost of resources acquires and track how those resources are used to produce and sell products/services.
Costing System
124
Changes in total proportion and is constant in a per unit basis.
Variable Costs
125
Two ways which costs behave:
Variable and Fixed
126
It is used to describe the variable cost behavior.
Strictly variable or Proportionately variable
127
Always focus on the _________ when considering both variable and fixed costs.
Total Costs
128
Reducing fixed costs requires __________ on the part of managers.
Active Intervention
129
Cost that has both variable and fixed elements.
Mixed or Semivariable Costs
130
A variable, such that level of activity or volume, that casually affects costs over a given time span.
Cost Driver
131
An event, task, unit of work with a specified purpose - designing, testing, setup.
Activity
132
There is a cost driver in variable costs and only in the long run for fixed costs. True or False.
True
133
Activity-based Costing Systems
Costing systems that identify the cost of each activity.
134
The band or range of normal activity or volume in which there is a specific relationship between level of activity and the cost in question.
Relevant Range
135
Variable costs only change proportionately with changes in volume outside the relevant range. True or False?
False
136
Also called an average cost.
Unit Cost
137
Three types of manufacturing inventories.
Direct Materials Inventory
WIP inventory
Finished-Goods Inventory
138
The merchandising only holds on type of inventory which is?
Merchandise Inventory
139
What are the three manufacturing costs?
Direct Materials
Direct Labor
Manufacturing Overhead or Indirect Manufacturing Overhead Costs
140
What are considered prime costs?
Direct Materials and Direct Labor
141
What are considered conversion costs?
Direct Labor
Factory Overhead Costs
142
All costs of the product that are considered assets in a company's balance sheet when costs are incurred and expensed as COGS when product is sold.
Inventoriable Costs
143
Inflows of assets received for products customers purchase.
Revenue
144
Includes all manufacturing costs to produce them.
Cost of Goods Sold
145
All costs in the income statement other than the cost of goods sold.
Period Costs
146
Refers to the cost that are treated as expenses of the accntng period in which they are incurred. E.g. Design, marketing, and customer service cost.
Period Costs
147
In manufacturing companies, what is considered period costs?
All nonmanufacturing costs
148
In merchandising sectors, what is considered period costs?
All costs not related to Cost of Goods Purchased for Sale
149
It is a key driver of success.
Innovation
150
Are research and development costs inventoriable or period costs?
Period cost
151
What are the four steps for the flow and of revenue and costs for a manufacturing company?
1. Cost of Direct Materials Used
2. Total Manufacturing Costs Incurred
3. Cost of Goods Manufactured
4. Cost of Goods Sold
152
Refers to the cost of goods brought to completion, whether they were started before or during the period.
Cost of Goods Manufactured
153
It is the cost of finished-goods inventory sold to customers during the current period.
Cost of Goods Sold
154
The equation Revenues - Cost of COGS give rise to?
Gross Margin or Gross Profit
155
What is the equation for Operating Income?
Total Rev - COGS - Operating Expenses = Operating Income
156
All direct manufacturing costs are called?
Prime Costs
157
It represents all manufacturing costs incurred to convert direct materials into finished goods.
Conversion Costs
158
Measuring costs require?
Judgment
159
Overtime and Idle time pay are considered manufacturing overhead or manufacturing labor?
Manufacturing Overhead
160
It is the wage rate paid to workers in excess of their straight-time wage rates.
Overtime Premium
161
Refers to the wages paid for unproductive time caused by lack of orders, machine or computer breakdowns, work delays, and the like.
Idle Time
162
It includes employer payments for employee benefits.
Payroll Fringe Costs
163
Is payroll fringe cost a direct or indirect labor?
Direct Labor
164
It is the time spent by direct laborers for correcting errors.
Rework Labor
165
It is the sum of the costs assigned to a product for a specific purpose.
Product Cost
166
For the purpose of making decisions about pricing and promoting products that generate the most profits.
Product and product-mix decisions
167
A contract such as this is referred to as a cost-plus agreement.
Reimbursement under government contracts
168
Are typically used for services and development contracts.
Cost-plus agreement.
169
What are the three framework for cost accounting and cost management?
1. Calculating cost of products, services, and other cost objects.
2. Obtaining information for planning and control and performance evaluation.
3. Analyzing relevant information for making decisions.
170
Is the most commonly used tool for planning and control.
Budgeting
171
It forces managers to look ahead, to translate a company's strategy into plans.
Budget
172
An analysis used to study the behavior and relationship among these elements as changes occur.
Cost-Volume-Profit Analysis
173
The difference between total revenues and total variable costs.
Contribution Margin
174
A useful tool for calculating contribution margin and operating income.
Contribution Margin Per Unit
175
The quotient between contribution margin and revenues.
Contribution margin percentage
176
A useful tool for calculating how a change in revenues changes contribution margin.
Contribution margin percentage
177
A widely used technique to evaluate how sales fluctuations affect profitability.
Contribution Margin Analysis
178
Three ways to express CVP relationships.
Equation method, contribution margin method, and graph method
179
The number of units sold is the only cost driver in CVP relationship. True or False
True
180
Total costs can be separated into two components, what are these two?
Fixed and variable component
181
A variable, such as volume, that casually affects revenues.
Revenue Driver
182
The quantity of outputs sold at which total revenue equal total cost - 0 result of operating income.
Breakeven Point
183
A graph that shows how changes in quantity of units sold affect operating income.
PV graph
184
Is operating income plus nonoperating income minus nonoperating costs minus income taxes.
Net Income
185
Three ways to use CVP Analysis in decision making includes decision to advertise, decision to reduce selling price, and determining target price.
True or False?
True
186
Decisions that entail risk.
Strategic decisions
187
A what-if technique managers use to examine how an outcome will change if the original predicted data are not achieved.
Sensitivity Analysis
188
Answers the what-if question and an important aspect of sensitivity analysis.
Margin of Safety
189
It gives managers a good feel for a decision's risk.
Sensitivity Analysis
190
The possibility that an actual amount will deviate from an expected from an expected amount.
Uncertainty
191
Use CVP analysis to plan variable and fixed costs to compare risk of losses versus higher returns. True or False
True
192
Operating leverage is the measure of ___________ across alternative cost structures.
Risk-return tradeoff
193
Describes the effects that fixed costs have on changes in operating income.
Operating Leverage
194
The quantities of various products that constitutes a company's total unit sales.
Sales Mix
195
Sales mix of products remains constant as total units sold changes. True or False?
True
196
When applying CVP in service and not-for-profit orgs one should define appropriate?
Cost measures
197
What is the difference between contribution margin and gross margin?
CM provides data for CVP and risk analysis while GM is a measure of competitiveness.
198
It includes all variable manufacturing costs and all fixed costs.
Cost of Goods Sold
199
In merchandising, gross margin is equal to contribution margin. True or False
True
200
It measures how much a company can charge for its products over and above cost of acquiring/producing them.
Gross Margin
201
It indicates how much of a country's revenues are available to cover fixed costs.
Contribution Margin
202
In case of manufacturing, cost of goods sold is equal to the variable cost of goods purchased making both gross margin and contribution margin identical.
False. Its only in the merchandising sector that that is the case.
203
The possibility that an actual amount will deviate from an expected amount.
Uncertainty
204
A possible relevant occurrence.
Event
204
An objective that can be quantified, such as maximize income or minimize costs. Also used by managers to choose the best alternative action.
Choice Criterion
205
It is the likelihood or chance that an event will occur.
Probability
206
Describes the likelihood, or the probability, that each of the mutually exclusive and collectively exhaustive set of events will occur.
Probability Distribution
207
In terms of the choice criterion, it is the predicted economic results of the various possible combinations of actions and events.
Outcomes
208
A summary of the alternative actions, events, outcomes, and probability.
Decision Table
209
Weighted average of the outcomes, with the probability of each outcome serving as the weight.
Expected Value
210
It means that the event becomes known.
Uncertainty Resolved
211
Good decisions and good outcome can exist without the other one. True or False?
True
212
Decisions could only be made based on the information that is only available at the time of evaluating and making decision. True or False?
True
213
It is anything for which a measurement of costs is desired.
Cost Object
214
A grouping of individual indirect cost items.
Cost Pool
215
A systematic way to link an indirect cost or group of indirect costs to cost objects.
Cost-allocation base
216
Two criterions for allocating costs:
Benefits Received
Ability to Bear Costs Allocated
217
The cost object is a unit or multiple units of a distinct product or service is called a?
Job
218
The cost objects are heterogenous and the cost objects are distinct.
Job-Costing System
219
The cost object is masses of identical or homogenous products.
Process-Costing System
220
It is used to cost a distinct product.
Job-Costing System
221
It is used to cost masses of similar or identical units.
Process-Costing System
222
A costing system that traces direct costs to a cost object based on actual direct-cost rates times the actual quantities of direct-cost inputs.
Actual Costing
223
What are the two time periods used to compute indirect cost rates?
Numerator Reason
Denominator Reason
224
A costing system that traces direct costs to a cost object by using actual direct-cost rate times the actual quantities of direct-cost inputs and allocates indirect costs based on the budgeted indirect-cost rates times the actual quantities of cost-allocation bases.
Normal Costing
225
An original record that supports journal entries in an accounting system.
Source Document
226
It is used to record and accumulate all costs assigned to a specific job, starting when work begins.
Job-Cost Sheet or Job-Cost Record
227
It contains information about the cost of direct materials used on a specific job and department.
Materials-requisition record
228
A source document that contains the amount of labor time used for a specific job and department.
Labor-time Sheet
229
It presents the total of separate jobs-cost records pertaining to all unfinished jobs.
Work-in-Process Control
230
When jobs are completed or sold they are recorded in?
Finished-Goods Control
231
Under normal costing, it is the amount of manufacturing overhead costs allocated to individual jobs based on the budgeted rate.
Manufacturing Overhead Allocated or Manufacturing Overhead Applied
232
It is the contra account of manufacturing overhead control account.
Manufacturing Overhead Applied
233
It gives the birds eye view of the costing system.
General Ledger
234
It gives the worm's eye view of the costing costing system and contains the underlying details.
Subsidiary Ledgers
235
This subsidiary ledger is used to continuously record the quantity of materials received.
Materials Records by Type of Material
236
This subsidiary ledger is used to trace costs of direct manufacturing labor to individual jobs and to accumulate costs of indirect manufacturing labor.
Labor Records by Employee
237
It makes up the subsidiary ledger for the Manufacturing Overhead Control account and shows details of different categories of overhead costs.
Manufacturing Department Overhead Records by Month
238
It occurs when the allocated amount of indirect costs in an accounting period is less than the actual amount
Underallocated Indirect Costs
239
Occurs when the allocated amount of indirect costs in an accounting period is greater than the actual amount.
Overallocated Indirect Costs
240
This approach restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates.
Adjusted Allocation-rate Approach
241
This approach spreads under or overallocated amounts among ending WIP inventory, Finished Goods Inventory and Cost of Goods Sold.
Proration Approach
242
In this approach, the total under or overallocated manufacturing overhead is included in the COGS.
Write-off to COGS Approach
