Acc Ch.20 Flashcards
1
Q
Management decision making
A
1) ID the problem
2) determine and evaluate courses of action
3) make a decision
4) review results
2
Q
Incremental analysis
A
Process of ID the financial data that changes under alternative courses of action
3
Q
Relevant costs
A
Only factors to be considered are those costs that differ across alternatives
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
5
Q
Out of pocket costs
A
Costs that require future outlay of cash and is relevant for current/future decisions
6
Q
Opportunity cost
A
The potential benefit lost by taking a specific action where 2 or more alternatives are available