Chapter 1 - Introduction to Management Accounting Flashcards
What is financial accounting?
The provision of financial statements for parties external to the organisation based upon historical data.
What is management accounting?
The provision of both actual figures and forecast figures to enable management to carry out their prime functions of planning, control, and decision making.
What is a budget?
A formalised, numerical, often financial plan of action.
What is the role of planning?
Planning involves defining objectives and assessing future costs and revenues to set up a budget.
What is the role of control?
Once the planning stage is complete, the company must ensure the plans are being followed and assess any inefficiencies.
What is the role of decision making?
Managers are responsible for making many decisions in the day-to-day running of the business.
What is a cost unit?
A unit of product or service to which costs can be attached.
What is a cost card?
A document which groups the costs of a product or service in order to arrive at a total cost.
