Chapter 1

Question 1

data

Answer 1

reports such as financial statements, customer lists, and inventory records

Question 2

Information

Answer 2

data that has been organized, processed, and summarized

Question 3

Knowledge

Answer 3

information that is shared and exploited so that it adds value to an organization

Question 4

Accounting infomation system (AIS)

Answer 4

a transaction-processing system that captures financial data resulting from accounting transactions within a company

Question 5

financial accounting

Answer 5

the area of accounting concerned primarily with the preparations and use of financial statements by creditors investors and other users outside the company

Question 6

managerial accounting

Answer 6

the area of accounting concerned with generating financial and non-financial info for use by managers in their decision-making roles with the company

Question 7

External users

Answer 7

stock holders, potential investors, creditors, gov’t taxing agencies, regulators, suppliers, customers, and others outside the company

Question 8

Internal Users

Answer 8

individual employees, teams, departments, regions, top management, and others inside the company-often referred to as managers

Question 9

planning

Answer 9

the development of both short-term and long-term obj’s and goals of an organization and the identification of the resources needed to achieve them

Question 10

operational planning

Answer 10

the development of short-term objectives and goals (under a year)

Question 11

strategic planning

Answer 11

addresses long-term questions of how an organization positions and distinguishes itself from competitors

Question 12

operating activities

Answer 12

the day-to-day operations of a business

Question 13

controlling activities

Answer 13

the motivation and monitoring of the employees and the evaluation of people and other resources used in the operations of the organization

Question 14

operations and product function

Answer 14

produces the products of services that an organizations sells to its customers

Question 15

finance function

Answer 15

responsible for managing the financial resources to help an organization reach its goals

Question 16

marketing function

Answer 16

involved with the process of developing, pricing, promoting, and distributing goods and services sold to customers

Question 17

Human Resource function

Answer 17

concerned with the utilization of human resources to help an organization reach its goals

Question 18

decision making

Answer 18

the process of identifying alternative courses of action and selecting an appropriate alternative in a given situation

Question 19

relevant costs

Answer 19

cost which differ among alternatives

Question 20

sunk costs

Answer 20

costs that have already been incurred (Spent)

Question 21

opportunity costs

Answer 21

the benefits foregone by choosing one alternative to another

Question 22

ethics programs

Answer 22

company programs of policies created for the express purpose of establishing and maintaining an ethcal business environment