01 - The Accounting Function Flashcards
What is the purpose of management information?
To provide information to management to assist in fulfilling their three main purposes of planning, control and decision making
What is a budgetary control report?
A report that shows budgets, actuals, commitments and variances against budgets
What is a long term decision?
Decisions made that will assist with the strategic goals of the business. These will be decisions made that will aim to achieve these goals within 5-10 years
What is a short term decision?
Decisions made that help with the day to day running of the business but will help towards achieving the long term goals of the business as well.
What is ACURATE information?
A - Accurate
C - Complete
C - Cost Effective
U - Understandable
R - Reliable
A - Accessible
T - Timely
E - Easy to use
What is data?
Raw facts that are unprocessed
What is information?
Data that has gone through some kind of processing and is meaningful.
What is financial accounting?
The recording, summarising and presenting of financial information. This is required for an organisations statutory accounts.
What is cost accounting?
Recording and preparing information on the costs incurred within an organisation.
What is management accounting?
The production of financial reports to assist managers with their planning, control and decision-making roles.
What is a responsibility centre?
A part of the organisation for which information can be obtained from and performance can be measured of. Each centre will have a manager that is responsible for the planning, control and decision making of the centre.
What is a cost centre?
A production or service department or location for which costs can be ascertained i.e. an accounting firm may have; audit, tax accountancy costs centres
What is a revenue centre?
A production or service department or location for which revenues can be ascertained
What is a profit centre?
A production or service department or location for which costs & revenues can be ascertained, so that is it possible to see if/how much profit has been made.
What is an investment centre?
A production or service department or location for which costs, revenues & investments can be ascertained. These centres will receive money from the central head office and operate the centre as a business of its own.
