Chapter 1 Flashcards
What is the difference between Financial and Management Accounting
Financial Accounting -
Required by law
Accurate
Figures show what happened in the past
Must be produced annually
Prepared for many different stakeholders, EXTERNAL
Management Accounting -
Optional to do
Information may be approximate
No prescribed rules
Can be for past present or future
Produced when required
Prepared for management - INTERNAL
What is planning for businesses
where the business would like to be, at some future point, often by setting objectives or
targets. Financial targets are known as budgets
What is Strategic planning
process of deciding on long-term objectives of the organization and on the resources used to
attain these objectives
What is Tactical Planning
medium-term process by which managers fulfil the objectives of obtaining and using resources
effectively and efficiently in the accomplishment of the organisation’s objectives.
What is Operational planning
The short-term process of assuring that specific tasks are carried out effectively and efficiently, and
short-term targets necessary to manage the business on a day to day basis are achieved
what is Decision-making
Making decisions to get the business from where it is now, to where it wants to be i.e. deciding how to
achieve the plan. Decisions on products and markets are important here.
What is Control
Ensuring the decisions are implemented correctly and that the plans are actually fulfilled.
What is Data
Data is the raw unprocessed figures that have been collected about an activity or procedure e.g. the
number of units made each day.
What is numerical / quantitative data
data can be measured ex: no of siblings
Categorical data
can be sorted into non-overlapping groups. It too can be further broken down
into two types – ordinal and nominal
What is Nominal Data
data does not have any numeric value or natural order (colours of eyes, brands of cars,
place of birth).
What is Ordinal Data
data has a set order or scale to it. For example income levels, ratings for a restaurant on
a scale from 0 (lowest) to 10 (highest), time of day (dawn, morning, noon, afternoon, evening,
night).
What is Quantitative Data
can be measured (how old are you?)
What is Qualitative data
data that can’t be
measured (how blue are your eyes?).
What is Primary Data?
data has been gathered for the specific purpose by yourself (interviews, questionnaires
etc.).
What is Secondary Data
data has been gathered by someone else for another purpose that you use for
your purpose. Examples include financial statements used to base a share investment decision
on or government inflation statistics used to decide on product price rises.
What is Information?
is processed data that is in a form that makes it valuable to the user e.g. the percentage
increase in daily production
What Are the qualities of Good information?
Accurate - Precise enough
Complete
Clear
User friendly
Reliable
Accessible
Timly
Effective
What are the main Sources of Data?
Machines, Transactional & human
What is Big Data
Big data includes data collected from many, previously separate, systems.
what is structured data?
is the easiest to search and organise, because it is usually contained in rows
and columns and its elements can be mapped into fixed pre-defined fields. Examples include
accounting transactions and star ratings by customers.
What is Un-Structured data
cannot be contained in a rows-and-columns database. Examples include
video and audio files and social media posts. The lack of structure means it is more difficult to
search, manage and organise.
What is Semi Structured data
is a mix of structured and unstructured data. It has some defining or
consistent characteristics but doesn’t conform to a rigid structure. Email messages are a good
example – the actual content is unstructured but a message does contain structured data such
as the name and email address of the sender and recipient, the time sent and so on.
What are the 5 Characteristics of big data
Volume, Velocity, Variety, Veracity, Value
