question

T/F Management accounting is the generation of relevant information and analysis to support managers' decision making activities.

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True

question

T/F The primary users of managerial accounting information are managers and decision makers.

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True

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Managerial accounting is designed to assist managers with four general activities:

answer

planning, controlling, evaluating, and decision making

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T/F Managerial accounting information provides feedback about how well the organization is implementing its strategy and achieving its goals.

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True

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A company that focuses on product differentiation must monitor product costs because if too much money is spent of quality, the sales price will be:

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too high to be competitive.

question

A harvest strategy focuses on ________, even at the expense of market share.

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short-term profits and cash

question

While the balanced scorecard uses some financial performance measures, it places equal emphasis on _____.

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nonfinancial performance measures.

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The supply chain's goal is to

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get the right product to the right location in the right quantities, at the right time, and at the right cost.

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Ethical behavior

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knowing right from wrong and conducting yourself accordingly, so that your decisions are consistent with your own value system and the values of those affected by your decisions.

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A firm's code of conduct

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based on a set of core values that are meant to guide employees' behavior.

question

Managerial accounting is used by managers to

answer

1. Assure appropriate use of an organization's resources. 2. Assure accountability for an organization's resources. 3. Provide information used in planning, evaluation and controlling functions within an organization.

question

The purpose of financial statements contained in annual reports is to

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Communicate information about the financial health of a company to external users.

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An example of an external user is a

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potential investor

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All public companies that are traded on a stock exchange and governed by the Securities and Exchange Commission must prepare financial statements following

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Generally accepted accounting principles.

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Managerial accounting reports

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1. Use historical information. 2. Project the results of certain decisions. 3. Compare actual results to budged results.

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Managerial accounting is designed to assist managers with which of the following activities?

answer

Evaluating Planning Controlling

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One of the primary products of the operations planning stage will likely be a

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budget

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The forefront of managerial activity is

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Decision making.

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Which of the following are managers most likely to monitor whether using product differentiation or low-cost production strategy?

answer

External information such as competitor actions

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Which of the following might be measures of performance for a balanced scorecard?

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Customer satisfaction Stock price Sales revenue

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The goal of an ERP system is to

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To integrate all data from the company's many business processes into a single information system.

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Which of the following statements related to ethical behavior is NOT a correct statement?

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A person is considered to uphold ethical business practices as long as he or she complies with the law.

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Managerial accounting (definition)

answer

"the generation of relevant information to support management's decision-making activities."

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Diff. between managerial and financial accounting

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Managerial accounting's primary users: managers and decision makers within an organization Financial accounting users: external users.

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Managerial accounting reports focus on _____, while financial accounting statements report results for ____.

answer

Managerial accounting reports focus on operating segments, while financial accounting statements report results for the organization as a whole.

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Unlike GAAP that guides financial accounting, there are no ______.

answer

mandated rules in managerial accounting.

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Managerial accounting is concerned more with projecting ___ results than reporting ____ results.

answer

future results, than reporting past results

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Managerial accounting information is prepared to take advantage of a window of opportunity, even if some accuracy must be sacrificed. Financial accounting information is balanced to the penny and is delivered after the ______.

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end of the accounting period.

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List and describe the four functions of managers

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1. Planning 2. Controlling 3. Evaluating 4. Decision making

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planning

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setting a direction for the organization.

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controlling

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monitoring of day-to-day operations to identify any problems that require corrective action. 3

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evaluating

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the process of comparing a particular period's actual results to planned results, for the purpose of assessing managerial performance.

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decision making

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choosing between alternative courses of action.

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Diff. btwn long term and short term planning

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Long-term, or strategic planning provides direction for a five- to ten-year period. Short-term, or operational planning provides more detailed guidance for the coming year; it translates the company's strategy into action steps!

question

Explain how the selection of a particular business strategy determines the information that managers need to run an organization effectively.

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Managers need information that shows how well operations are meeting the organization's strategic goals.

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Ex. of a way manager can run org effectively

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For instance, if the organization's strategy is to be a low-cost producer, information about product costs and cost variances will be more useful to managers than information about research and development.

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importance of ethical behavior in managerial accounting

answer

Ethical behavior means knowing right from wrong and then doing the right thing.Acting unethically can lead to illegal activity and ultimately to the destruction of the firm. Furthermore, research has shown that a public commitment to ethical behavior can lead to superior financial performance.

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Balanced scorecard

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A collection of performance measures that track an organization's progress toward achieving its goals.

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(ERP) enterprise resource planning

answer

A system used by companies to provide information to decision makers on a companywide basis by integrating all data from the company's many business processes into a single information system.

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Generally accepted accounting principles (GAAP)

answer

"Rules" that govern how transactions are valued and recorded and how financial information is presented. (provides a level of protection or assurance that the reports will follow certain standards)

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Just in time inventory (JIT)

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An inventory strategy that focuses on reducing waste and inefficiency by ordering inventory items so that they arrive just when they are needed.

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Long term planning

answer

A management activity that establishes the direction in which an organization wishes to go; often referred to as strategic planning.

question

Operation (short time) planning

answer

A management activity that translates the long-term strategy into a short-term plan to be completed within the next year.

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Supply chain

answer

A network of facilities that procure raw materials, transform them into intermediate goods and then into final products, and deliver the final products to customers through a distribution system.

question

Managerial accounting adds ______ to an organization by helping managers do their jobs more efficiently and effectively

answer

value

question

Who must prepare financial statements following the GAAP guidelines?

answer

All public companies that are traded on a United States stock exchange and governed by the Securities and Exchange Commission (SEC); non public do at the request of CREDITORS

question

Does managerial accounting have a set of rules like financial accounting does?

answer

no

question

Is managerial accounting mandatory?

answer

No, optional

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GAAP-based financial statements presents

answer

a picture of the financial health of the company as a whole

question

The basic financial statements always report

answer

transactions and events that have already occurred (therefore historical in nature)

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Porter developed a strategic framework in which the firm has two ways to develop a competitive advantage

answer

product differentiation and low-cost production

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product differentiation

answer

it will seek ways to set its products apart from those of its competitors in terms of quality, design, or service

question

low-cost production strategy

answer

the company will set itself apart from competitors in terms of a lower sales price.

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For the product differentiation strategy, companies will want information on

answer

quality (such as defect rates, percentage of on-time deliveries, and customer satisfaction)

question

For a low-cost production strategy, managers will be more interested in monitoring the

answer

production process

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supply chain's goal

answer

get the right product to the right location, in the right quantities, at the right time, and at the right cost

question

A simple supply chain may include

answer

one supplier, one company, and one customer

question

This strategy greatly reduces warehousing costs

answer

just in time inventory

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