1. Introduction to Managerial Accounting – Flashcards

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AUDIT COMMITTEE {8}
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A subcommittee of the board of directors that is responsible for overseeing both the internal audit function and the annual financial statement audit by independent CPA's.
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American Institute of Certified Public Accountants
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the worlds largest association representing the accounting profession; together with the chartered institute of management accountants (cima) offers the chartered global management accountant (cgma) designation.
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BOARD OF DIRECTORS {7}
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The body elected by shareholders to oversee the company.
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BUDGET {4}
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Quantitative expression of a plan that helps managers coordinate and implement the plan.
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CERTIFIED MANAGEMENT ACCOUNTANT (CMA) {11}
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A professional certification issued by the IMA to designate expertise in the areas of managerial accounting, economics, and business finance.
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CHIEF EXECUTIVE OFFICER (CEO) {7}
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The position hired by the board of directors to oversee the company on a daily basis.
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CHIEF FINANCIAL OFFICER (CFO) {7}
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The position responsible for all of the company's financial concerns.
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CHIEF OPERATING OFFICER (COO) {7}
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The position responsible for overseeing the company's operations.
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CONTROLLER {8}
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The position responsible for general financial accounting, managerial accounting, and tax reporting.
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CONTROLLING {5}
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One of management's primary responsibilities; evaluating the results of business operations against the plan and making adjustments to keep the company pressing towards its goals.
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COST-BENEFIT ANALYSIS {21}
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Weighing costs against benefits to help make decisions.
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CROSS-FUNCTIONAL TEAMS {8}
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Corporate teams whose members represent carious functions of the organization, such as R&D, Design, Production, Marketing, Distribution, and Customer Service.
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DECISION MAKING {4}
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Identifying possible courses of action and choosing among them.
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DIRECTING {4}
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One of management's primary responsibilities; running the company on a day-to-day basis.
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ENTERPRISE RESOURCE PLANNING (ERP) {20}
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Software systems that can integrate all of a company's worldwide functions, departments, and data into a single system.
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EXTENSIBLE BUSINESS REPORTING LANGUAGE (XBRL) {18}
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A data tagging system that enables companies to release financial and business information in a format that can be quickly, efficiently. and cost-effectively accessed, sorted, and analyzed over the internet.
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INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) {18}
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The SEC has recently moved to adopt the IFRS for all publicly traded companies within the next few years. In many instances, IFRS vary from GAAP.
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INSTITUTE OF MANAGEMENT ACCOUNTANTS {11}
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The professional organization that promotes advancement of the management accounting profession.
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integrated reporting
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a process resulting in a report that describes how a company is creating value over time using financial, manufactured, intellectual, human, social, and natural capital
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INTERNAL AUDIT FUNCTION {8}
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The corporate function charged with assessing the effectiveness of the company's internal controls and risk management polices.
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ISO 9001:2008 {22}
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A quality-related certification issued by the Internal Organization for Standardization (ISO). Firms may become ISO 9001:2008 certified b y complying with the quality management standards set forth by the ISO and undergoing extensive audits of their quality management processes.
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JUST-IN-TIME (JIT) {21}
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An inventory philosophy first pioneered by Toyota in which a product is manufactured just in time to fill customer orders. Companies adopting JIT are able to substantially reduce the quantity of raw materials and finished product kept on hand.
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LEAN THINKING {21}
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A philosophy and business strategy of operating without waste.
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PLANNING {4}
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One of management's primary responsibilities; setting goals and objectives for the company and deciding how to achieve them.
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SARBANES-OXLEY ACT OF 2002 (SOX) {17}
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A congressional act that enhances internal control and financial reporting requirements and establishes new regulatory requirements for publicly traded companies and their independent auditors.
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SUSTAINABILITY {19}
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The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.
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THROUGHPUT TIME {21}
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The time between buying raw materials and selling finished products.
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TREASURER {8}
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The position responsible for raising the firm's capital and investing funds.
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TRIPLE BOTTOM LINE {19}
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Evaluating a company's performance not only by its ability to generate economic profits, but also by its impact on people and the planet.
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TOTAL QUALITY MANAGEMENT {22}
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A management philosophy of delighting customers with superior products and services by continually setting higher goals and improving the performance of every business function.
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[LEARNING OBJECTIVE] 1. Identify Managers three primary responsibilities.
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1. Planning 2. Directing 3. Controlling
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[LEARNING OBJECTIVE] 2. Distinguish financial accounting from managerial accounting.
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Financial focuses on providing stockholders and creditors with the info they need to make investment and lending decisions. Managerial focuses on providing internal management with the info it needs to run the company efficiently and effectively
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[LEARNING OBJECTIVE] 3. Describe organization structure and the roles and skills required of management accountants within the organization.
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skills: solid knowledge of both financial and managerial accounting, analytical skills, knowledge of how a business functions, ability to work on a team, oral and written communications, strong Microsoft excel skills
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[LEARNING OBJECTIVE] 4. Describe the role of the Institute of Management Accountants (IMA) and use its ethical standards to make reasonable ethical judgments.
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is the professional association for management accountants in the us. The mission is to provide a forum for research, practice development, education, knowledge sharing and advocacy of the highest ethical and best practices in accounting
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[LEARNING OBJECTIVE] 5. Discuss and analyze the implications of regulatory and business trends.
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sustainability, social responsibility and the triple bottom line
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Which of the following is not one of the three primary responsibilities of management? a. Controlling b. Costing c. Directing d. Planning
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b. Costing
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Which of the following about managerial accounting is true? a. GAAP requires managerial accounting. b. Internal decision makers use managerial accounting. c. CPA's audit managerial accounting reports. d. Managerial accounting reports are usually prepared on an annual basis.
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b. Internal decision makers use managerial accounting.
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Which of the following is not a characteristic of managerial accounting information? a. Emphasizes relevance b. Focuses on the future more than the past c. Provides detailed information about parts of the company, not just the company as a whole d. Emphasizes reliability
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d. Emphasizes reliability
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What company position is in charge of raising the firm's capital? a. Director of internal audit b. Controller c. COO d. Treasurer
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d. Treasurer
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Which of the following statements is true? a. The COO reports to the CFO. b. The treasurer reports to the CEO. c. The Internal Audit Department reports to the audit committee. d. The controller reports to the internal auditor.
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c. The Internal Audit Department reports to the audit committee.
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To get a job as a management accountant in most companies, you must: a. join the IMA. b. be certified as a CMA. c. be certified as a CPA. d. None of the above.
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d. None of the above.
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In addition to accounting knowledge, management accountants must possess all of the following skills except a. written communication skills. b. knowledge of how a business functions. c. computer programming skills. d. analytical skills.
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c. computer programming skills.
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A management accountant who refuses an expensive gift from a software salesperson meets the ethical standard of a. credibility. b. confidentiality. c. integrity. d. competence.
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c. integrity.
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Which of the following is not one of the provisions of the Sarbanes-Oxley Act of 2002? a. The company's auditors assume responsibility for the financial statements. b. The penalties (i.e., prison time and fines) for corporate fraud were increased. c. At least one audit committee member should be a financial expert. d. The CEO and CFO must certify that the financial statements fairly present the company's operations and financial condition.
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a. The company's auditors assume responsibility for the financial statements
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All of the following tools help companies compete in today's market except a. JIT. b. KJD. c. ERP. d. TQM.
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b. KJD.
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Managerial accounting differs from financial accounting in several areas. Specify whether each of the following characteristics relates to managerial accounting or financial accounting. a. Focused on the future b. Reporting is based mainly on the company as a whole c. Reports are prepared usually quarterly and annually d. Information is verified by external auditors e. Focused on the past f. Main characteristic of data is that it must be relevant g. Reports tend to be prepared for the parts of the organization rather than the whole organization h. Primary users are internal (for example, company managers) i. Governed by Generally Accepted Accounting Principles (GAAP) j. Main characteristic of data is that it must be reliable and objective k. Reports are prepared as needed l. Not governed by legal requirements m. Primary users are external (i.e., creditors, investors)
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a. Managerial Accounting b. Financial Accounting c. Financial Accounting d. Financial Accounting e. Financial Accounting f. Managerial Accounting g. Managerial Accounting h. Managerial Accounting i. Financial Accounting j. Financial Accounting k. Managerial Accounting l. Managerial Accounting m. Financial Accounting
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The following is a list of job duties or descriptions. For each item, specify whether it would be most likely to describe the duties or responsibilities of someone working for the treasurer, the controller, or in the Internal Auditing Department. a. Calculate the cost of a product b. Issuing company bonds c. Check to make sure that company risk management procedures are being followed d. Work with various departments in preparing operating budgets for the upcoming year e. Oversee accounts payable activities f. Invests company funds g. Report to the audit committee of the board of directors and to a senior executive, such as the CFO or CEO h. Prepares company tax returns i. Performing cash counts at branch offices j. Preparing journal entries for month-end closing k. Issuing company stock l. Ensuring that the company's internal controls are functioning properly m. Creating an analysis about whether to lease or buy a delivery truck
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a. b. c. d. e. f. g. h. i. j. k. l. m.
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