Ch 1 M-A Flashcards
Accounting information system (AIS)
A transaction-processing system that captures financial data resulting from accounting transactions within a company
Financial accounting
The area of accounting concerned primarily with the preparation and use of financial statements by creditors, investors, and other users outside the company
Managerial accounting
The area of accounting concerned primarily with generating financial and non-financial information for use by managers in their decision-making roles within a company
External users
Stockholders, potential investors, creditors, government taxing agencies, regulators, suppliers, customers, and other outside the company
Stakeholder
Any person or group that either affects or is affected by the company’s actions and decisions. Includes both external and internal users
What type of information do external users need?
Stockholders and potential investors want information to help them analyze the current and future profitability of an organization
What three parts primary activities are managers involved in?
planning, operating, and controlling
Internal users
Individual employees, teams, departments, regions, top management, and other insider the company - often referred to as managers
Planning
The development of both the short-term (operational) and long-term (strategic) objectives and goals of an organization and the identification of the resources needed to achieve them
Operational planning
The development of short-term objectives and goals (typically, those to be achieved in less than one year).
Strategic planning
Addresses long-term questions of how an organization positions and distinguishes itself from competitors
Operating activities
The day-to-day operations of a business
Controlling activities
The motivation and monitoring of employees and the evaluation of people and other resources used in the operation of the organization
Operations and production function
Produces the product or services that an organization sells to its customers
Marketing function
Involved with the process of developing, pricing, promoting, and distributing goods and services sold to customer