Ch 1 Flashcards
Managerial accounting
Managerial accounting provides info for managers inside
The company
Financial Accounting
Concerned with reporting financial info to external parties
Stockholders, creditors, regulators
Segment
Part or activity of organization which managers
Would like cost, revenue or profit data
Business Segment examples 6?
Product lines Customer groups (age, ethnicity, gender, purchase volume) Geographic territories, divisions, plants, departments
3 vital activities of managerial accounting?
Planning, controlling, decision making
Planning
Involves establishing goals and specifying how
To achieve them
Controlling
Gathering feedback to ensure that the plan is being
Properly executed or modified as circumstances change
Decision making
Selecting course of action from competing alternatives
Budget
Detailed plan for future that’s expressed in
formal quantitative terms
Performance report
Compares budgeted data to actual data as effort to
Identify and learn from excellent performance and to
Identify and eliminate unsatisfactory performance
Can be used to evaluate and reward employees
Strategy
Gameplay that enables company to attract customers
By distinguishing itself from competitors
3 categories of customer value propositions?
Customer intimacy (personalized) Operational excellence (cheaper and efficient) Product leadership (innovative, cutting edge)
Enterprise risk management
Process used by company to identify risks and
Develop responses to them that enable the company
To meet its goals
Business process
Series of steps followed in order to carry out
Task in business
Value chain
Consists of major business functions that add value
To company’s products and services
Lean production
Management approach that organizes resources
Such as people and machines around flow of
Business processes
Only produces units for customer orders
Constraint
Prevents you from getting more of what you want
Theory of Constraints (TOC)
Based on insight that effectively managing the constraint
Is key to success
Corporate social responsibility (CSR)
Concept where organizations consider needs of all stakeholders
When making decisions
Stakeholders of companies served by social responsibility 6?
Customers, employees, suppliers, communities, environmental/human rights advocates
Corporate governance
System by which company is directed and controlled
Sarbanes Oxley act 2002
Protects interest of those that invest in publicly traded
companies by improving reliability and accuracy of
Corporate financial reports and disclosures
Internal control
Process designed to provide reasonable assurance
That objectives are being achieved
Preventive control
Deters undesirable events from occurring
