Unit 1 - CHAP 1 - 4 Flashcards

(50 cards)

1
Q

How was management accounting used in history?

A

as a business communication tool, translating raw data into financial results to be assessed and compared

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Pacioli, the father of accounting, in 1949 created….

A

the double entry system/method

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is management accounting?

A

he process of taking financial info and non-financial info from an organization and using it to make short term and strategic long term decisions to help the organization reach its goals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what are the three components of management accounting?

A

-recording and evaluating costs
-developing info to support planning and control systems
-developing, implementing and operating performance measurement and evaluation systems

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is Cost accounting?

A

approaches and methods for developing cost information (such as the cost of a product or a unit of service)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

who is generally the decision maker in the organization?

A

the board of directors, if no board the owners/shareholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

who is in charge of managing the day to day business in an org?

A

the CEO; they manage the organization and its managers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

who are considered line employees?

A

employees directly involved in the revenue-generating activities of the org

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

who are considered administrative employees?

A

back end support staff; admin, cpa’s, etc

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

what is corporate governance?

A

the activities undertaken to control and direct an organization. These are usually divided among the board of directors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

examples of corporate governance

A

-setting the strategic direction
-ensure org is fulfilling its responsibilities to its primary stakeholders
-identify ways to ensure timely and effective decision making
-implement controls to act ethically, legally and transparent with stakeholders in mind
-communication between shareholders, managers and employees

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the role of management accounting?

A

planning, directing and controlling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is involved in the process of planning?

A

identifying the organizations objectives and goals, and then developing and implementing a strategy to achieve them

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

what is the role of directing?

A

keeping the daytoday operations of the organization running effectively and efficiently. This involves hiring employees, providing direction and insuring tasks are done

Directing is focused on measuring results to determine whether the organization was able to implement its strategies.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is the process of controlling?

A

the process of measuring the results of actions associated with the chosen strategy and amending actions to ensure the organization achieves its objectives

Control involves establishing performance standards, measuring actual performance, and taking corrective action as needed to ensure objectives are achieved.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

what does relevance mean?

A

both internal and external sources are used to compile relevant info

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what does timeliness mean?

A

relevant in its timeliness of that information

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

what does faithful representation mean

A

accuracy is key. dollar amount must be accurate to ensure proper control of cash, so the book balances align with the bank balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

what are the key skills required of management accounting

A
  • attention directing
  • problem solving
  • communication
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

what is the triple bottom line?

A

people, planet, profits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What is corporate social responsibility

A

making sure all stakeholders are considered and no personal/professional bias takes place

22
Q

what are the different Bias’s

A
  • management bias
  • income bias
  • management accounting: estimates, pricing, costing, rev, inventory balances, profits
23
Q

describe the key components/steps in the CPA way - “The code”

A
  • assessing the situation
  • analyzing an ethical issue
  • concluding and advising
24
Q

why are ethics important in management accounting

A

To ensure accurate financial reporting and decision-making

25
what are the elements of the value chain?
research development, design. production/purchases, marketing, distribution, customer service (in this order)
26
what is a for profit service business
provides services to customer, no physical product being transferred
27
what is a for profit merchandising business
a business that produces goods (inventory) to resell to a customer
28
what is a fore profit manufacturing business
a business that transforms raw materials into a finished product sold for profit
29
what is a cost object?
anything which a cost can be traced to
30
what is a cost pool
an account that accumulates cost
31
what is a direct cost
a cost that can be directly traced to a cost object
32
what is an indirect cost
any product cost that fails the direct cost test
33
what are considered product costs
direct materials, direct labour, manufacturing overhead
34
what are manufacturing overhead costs?
costs that are not direct materials or direct labour, but are manufacturing costs
35
what are period costs?
all costs that are not considered product costs
36
what is a variable cost
costs that vary in proportion to changes in total activity or quantity/volume
37
how to calculate the variable cost?
Variable cost per unit X number of units of activity
38
what is considered the cost driver when calculating variable costs?
number of units of activity
39
what is a fixed cost
a cost that remain consistent regardless of level in activity
40
what is contribution margin
sales price of a product less all variable costs of product
41
what is cost accumulation
the collection of costs in a cost pool
42
what is a cost pool
contains costs that will be assigned to cost objects in the future
43
what are some examples of cost pools
materials, manufacturing labour, quality control labour
44
what is cost assessment
the allocation of costs from a cost pool to a cost object
45
how to calculate direct materials used
beginning DM used + purchases of DM = Cost of DM available - ending DM inv = Direct Materials used
46
how to calculate manufacturing costs
DM used + direct labour used + manufacturing OH allocated = total manufacturing costs
47
how to calculate Cost of Goods Manufactured
beginning WIP inv + total manufacturing costs incurred = manufacturing costs to account for - ending WIP inv = COG manufactured
48
how to calculate cost of goods sold
beginning finished goods inv + COG manufactured = COGAS - ending finished goods inv = COGS
49
what would appear on both the income statement or balance sheet of a merchandising org?
accounts receivable
50