Managerial Accounting Chapter 1 Test – Flashcards
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Budget
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A detailed plan for the future that is usually expressed in formal quantitive term
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Business process
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A series of steps that are followed in order to carry out some task in a business.
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Constraint
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Everything that prevents you from getting more of what you want.
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Controlling
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The process of gathering feedback to ensure that a plan is being properly executed or modified as circumstance change.
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Corporate social responsibility
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A concept whereby organizations consider the needs of an stakeholders when making decision.
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Decision making
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Selecting a course form competing alternatives.
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Enterprise risk management
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A process used by a company to identify its risks and develop responses to them that enable it to be reasonably assured of meeting its goals.
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Financial accounting
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The phase of accounting that is concerned with reporting historical financial information to external parties such as stockholders creditors and regulators.
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Lean Production
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A management approach that organizes resources such as people and machines around the flow of business processes and that only produces units in response to customer order.
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Managerial accounting
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The phrase of accounting that is concerned with providing information to managers for use with in the organization.
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Segment
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A part or activity of an organization about which managers would like cost revenue or profit data.
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Strategy
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A company's "game plan" for attracting customers by distinguishing itself form competitors.
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TOC
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A management approach that emphasizes the importance of managing constraints
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Value chain
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The major business functions that add value to a company's product and service,such as research and development, product design, manufacturing,marketing, distribution and custom service.
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JIT
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A production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand. (p. 14)
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Lean thinking model
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A five-step management approach that organizes resources around the flow of business processes and that pulls units through these processes in response to customer orders. (p. 13)
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Line
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A position in an organization that is directly related to the achievement of the organization's basic objectives. (p. 11)
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SOX of 2002
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Legislation enacted to protect the interests of stockholders who invest in publicly traded companies by improving the reliability and accuracy of the disclosures provided to them. (p. 25)
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Raw materials
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Materials that are used to make a product. (p. 13)
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Planning and control cycle
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The flow of management activities through planning, directing and motivating, and controlling, and then back to planning again. (p. 7)
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Planning
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Selecting a course of action and specifying how the action will be implemented. (p. 5)
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Performance report
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A detailed report comparing budgeted data to actual data. (p. 7)
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Org chart
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A diagram of a company's organizational structure that depicts formal lines of reporting, communication, and responsibility between managers. (p. 10)
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Non-value add
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Activities that consume resources but do not add value for which customers are willing to pay. (p. 16)
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CFO
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The member of the top management team who is responsible for providing timely and relevant data to support planning and control activities and for preparing financial statements for external users. (p. 11)
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Control
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The process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals. (p. 6)
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Controller
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The member of the top management team who is responsible for providing relevant and timely data to managers and for preparing financial statements for external users. The Controller reports to the CFO. (p. 6)
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Directing and motivating
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Mobilizing people to carry out plans and run routine operations. (p. 5)
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Decentralization
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The delegation of decision-making authority throughout an organization by providing managers with the authority to make decisions relating to their area of responsibility. (p.10)
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Corporate governance
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The system by which a company is directed and controlled. If properly implemented it should provide incentives for top management to pursue objectives that are in the interests of the company and it should effectively monitor performance. (p. 25)
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Feedback
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Accounting and other reports that help managers monitor performance and focus on problems and/or opportunities that might otherwise go unnoticed. (p. 6)
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Value chain
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The major business functions that add value to a company's products and services such as research and development, product design, manufacturing, marketing, distribution, and customer service. (p. 12)
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Work in process
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Units of product that are only partially complete and will require further work before they are ready for sale to a customer. (p. 13)
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Six Sigma
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A position in an organization that is only indirectly related to the achievement of the organiza- tion's basic objectives. Such positions provide service or assistance to line positions or to other staff positions. (p. 11)
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Segment
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Any part of an organization that can be evaluated independently of other parts and about which the manager seeks financial data. Examples include a product line, a sales territory, a division, or a department. (p. 9)
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Supply chain management
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A management approach that coordinates business processes across companies to better serve end consumers. (p. 14)
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Staff
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A position in an organization that is only indirectly related to the achievement of the organiza- tion's basic objectives. Such positions provide service or assistance to line positions or to other staff positions. (p. 11)
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Enterprise system
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A software system that integrates data from across an organization into a single centralized database that enables all employees to access a common set of data. (p. 19)
