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Chapter 1 -108 – Flashcards

Ann Ricker

7 July 2022

question

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

answer

True

question

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

answer

True

question

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

answer

planning, controlling, evaluating, and decision making

question

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

answer

True

question

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:

answer

too high to be competitive.

question

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

answer

short-term profits and cash

question

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

answer

nonfinancial performance measures.

question

The supply chain's goal is to

answer

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

question

Ethical behavior

answer

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.

question

A firm's code of conduct

answer

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

answer

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

question

An example of an external user is a

answer

potential investor

question

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

answer

Generally accepted accounting principles.

question

Managerial accounting reports

answer

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

question

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

answer

Evaluating Planning Controlling

question

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

answer

budget

question

The forefront of managerial activity is

answer

Decision making.

question

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

question

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

answer

Customer satisfaction Stock price Sales revenue

question

The goal of an ERP system is to

answer

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

question

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

answer

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

question

Managerial accounting (definition)

answer

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

question

Diff. between managerial and financial accounting

answer

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

question

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.

question

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

answer

mandated rules in managerial accounting.

question

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

answer

future results, than reporting past results

question

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 ______.

answer

end of the accounting period.

question

List and describe the four functions of managers

answer

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

question

planning

answer

setting a direction for the organization.

question

controlling

answer

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

question

evaluating

answer

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

question

decision making

answer

choosing between alternative courses of action.

question

Diff. btwn long term and short term planning

answer

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.

answer

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

question

Ex. of a way manager can run org effectively

answer

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.

question

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.

question

Balanced scorecard

answer

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

question

(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.

question

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)

question

Just in time inventory (JIT)

answer

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

question

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.

question

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

question

Is managerial accounting mandatory?

answer

No, optional

question

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)

question

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

answer

product differentiation and low-cost production

question

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.

question

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

question

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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question

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

answer

True

question

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

answer

True

question

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

answer

planning, controlling, evaluating, and decision making

question

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

answer

True

question

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:

answer

too high to be competitive.

question

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

answer

short-term profits and cash

question

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

answer

nonfinancial performance measures.

question

The supply chain's goal is to

answer

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

question

Ethical behavior

answer

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.

question

A firm's code of conduct

answer

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

question

Managerial accounting is used by managers to

answer

question

The purpose of financial statements contained in annual reports is to

answer

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

question

An example of an external user is a

answer

potential investor

question

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

answer

Generally accepted accounting principles.

question

Managerial accounting reports

answer

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

question

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

answer

Evaluating Planning Controlling

question

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

answer

budget

question

The forefront of managerial activity is

answer

Decision making.

question

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

question

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

answer

Customer satisfaction Stock price Sales revenue

question

The goal of an ERP system is to

answer

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

question

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

answer

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

question

Managerial accounting (definition)

answer

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

question

Diff. between managerial and financial accounting

answer

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

question

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.

question

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

answer

mandated rules in managerial accounting.

question

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

answer

future results, than reporting past results

question

answer

end of the accounting period.

question

List and describe the four functions of managers

answer

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

question

planning

answer

setting a direction for the organization.

question

controlling

answer

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

question

evaluating

answer

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

question

decision making

answer

choosing between alternative courses of action.

question

Diff. btwn long term and short term planning

answer

question

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

answer

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

question

Ex. of a way manager can run org effectively

answer

question

importance of ethical behavior in managerial accounting

answer

question

Balanced scorecard

answer

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

question

(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.

question

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)

question

Just in time inventory (JIT)

answer

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

question

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.

question

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

question

Is managerial accounting mandatory?

answer

No, optional

question

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)

question

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

answer

product differentiation and low-cost production

question

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.

question

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

question

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

Chapter 1 -108 – Flashcards

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