Acc Ch.20 Flashcards

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1
Q

Management decision making

A

1) ID the problem
2) determine and evaluate courses of action
3) make a decision
4) review results

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2
Q

Incremental analysis

A

Process of ID the financial data that changes under alternative courses of action

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3
Q

Relevant costs

A

Only factors to be considered are those costs that differ across alternatives

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4
Q

Sunk costs

A

Is a cost resulting from a past decision and cannot be changed or avoided and is irrelevant to future decisions

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5
Q

Out of pocket costs

A

Costs that require future outlay of cash and is relevant for current/future decisions

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6
Q

Opportunity cost

A

The potential benefit lost by taking a specific action where 2 or more alternatives are available

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