Chapter 1: Managerial accounting

Question 1

what are the 3 important pillars of business?

Answer 1

Having knowledge and skills of a valuable job. E.g. how to build a good car.

Knowing how to sell.

Knowing your numbers, what drives them, and how to change them.

Managerial accounting stands here (the last one)

Question 2

Managerial accounting

Answer 2

field of accounting that provides economic and financial information (reports) for managers and other internal users

They see more details down to each purchase and costs

Examples: unit costs, detailed budgets, maintenance fees vs downtime losses, cost structures, %of labor, %of raw material, manufacturing costs, etc..

Question 3

what is another name used for Managerial Accounting?

Answer 3

management accounting

Question 4

are financial statements for external or internal users?

Answer 4

they are more for external users

these include shareholders and creditors

Question 5

are financial statements part of managerial account or financial accounting?

Answer 5

financial accounting

Question 6

give examples of what is included in financial statements given to external users

Answer 6

balance sheet

incomestatement

cash flowstatement

Question 7

what is the main difference between managerial accounting and financial accounting?

Answer 7

financial accounting does not tell you to the same extent all the details about the company

on the other hand, managerial accounting sees more details down to each purchase and costs

Question 8

what is the difference between the types and frequency of reports between financial and managerial accounting?

Answer 8

in financial accounting, its financial statements reported quarterly and annually

in managerial accounting, its internal reports reported as frequently as needed

Question 9

what are the contents of a financial statement (report)

Answer 9

pertains to the business as a whole

highly aggregated (condensed)

limited to double-entry accounting and cost data

generally accepted accounting principles

Question 10

what are the contents of an internal report

Answer 10

pertains to sub units of the business

very detailed

extends beyond double entry accounting to any relevant data

standard is relevance to decisions

Question 11

what is the difference between the verification process in managerial accounting and financial accounting

Answer 11

managerial accounting reports have no independent audits

financial accounting reports are audited by CPA

Question 12

what si the difference between the purpose of the managerial and financial reports?

Answer 12

managerial reports have special purposes for specific decisions

financial reports are more general-purpose

Question 13

what are the manager’s functions

Answer 13

planning

directing

controlling

Question 14

what does managerial planning require?

Answer 14

requires management to look ahead and to establish objectives

Question 15

what does managerial directing involve?

Answer 15

involves coordinating a company’s diverse activities and human resources to produce a smoothly running operation

Implement their plans and coordinate employees

Question 16

what does managerial controlling mean?

Answer 16

is the process of keeping the company’s activities on track

Need to see if everything is going according to plan

Question 17

what is the value chain?

Answer 17

the activities that add value to the product

Question 18

do all activities in the value chain necessarily add value to the products?

Answer 18

nah boy

Question 19

what is the downside of the activities that don’t add value to the product in the value chain?

Answer 19

these will still increase your costs.

The goal is to minimize these activities

Question 20

activity based costing (ABC)

Answer 20

allocating overhead costs

Question 21

under activity based costing (ABC), what is overhead allocation based on?

Answer 21

based on each product’s use of economic resources as it undergoes various activities

Question 22

Balanced Scorecard

Answer 22

is a performance-measurement approach that uses both financial and non-financial measures

evaluates all aspects of a company’s operations in anintegratedway

Question 23

Indicate whether the following statement is true or false and explain why

Financial accounting reports pertain to subunits of the business and are very detailed

Answer 23

False because Financial accounting is summarizing what is happening, like a snapshot

Question 24

Indicate whether the following statement is true or false and explain why

Managerial accounting reports must follow generally accepted accounting principles and are audited by chartered professional accountants

Answer 24

False because managerial accounting reports have no independent audits

Question 25

Indicate whether the following statement is true or false and explain why

Managerial accountants explain and report manufacturing and non-manufacturing costs and determine cost behaviours, but are not involved in the budget process

Answer 25

This shit be false because putting the budget is the main part of Managerial accounting

Question 26

Indicate whether the following statement is true or false and explain why

Managers’ activities and responsibilities can be classified into three broad functions: planning, directing, and controlling

Answer 26

true

Question 27

Indicate whether the following statement is true or false and explain why

As a result of the Sarbanes-Oxley Act of 2002, top managers must certify that the company maintains an adequate system of internal control

Answer 27

true

Question 28

Indicate whether the following statement is true or false and explain why

Management accountants follow a code of ethics developed by the U.S. Institute of Management Accountants

Answer 28

true

Question 29

indicate if the following characteristic relates to Financial or Managerial accounting

General-purpose reports

Answer 29

financial accounting

Question 30

indicate if the following characteristic relates to Financial or Managerial accounting

Reports are used internally

Answer 30

managerial accounting

Question 31

indicate if the following characteristic relates to Financial or Managerial accounting

Prepared in accordance with generally accepted accounting principles

Answer 31

financial accounting

Question 32

indicate if the following characteristic relates to Financial or Managerial accounting

Special-purpose reports

Answer 32

managerial accounting

Question 33

indicate if the following characteristic relates to Financial or Managerial accounting

Limited to historical cost data

Answer 33

financial accounting

Question 34

indicate if the following characteristic relates to Financial or Managerial accounting

Reporting standard is relevant to the decision to be made

Answer 34

managerial accounting

Question 35

indicate if the following characteristic relates to Financial or Managerial accounting

Financial statements

Answer 35

financial accounting

Question 36

indicate if the following characteristic relates to Financial or Managerial accounting

Reports generally pertain to the business as a whole

Answer 36

financial accounting

Question 37

indicate if the following characteristic relates to Financial or Managerial accounting

Reports generally pertain to subunits

Answer 37

managerial accounting

Question 38

indicate if the following characteristic relates to Financial or Managerial accounting

Reports issued quarterly or annually

Answer 38

financial accounting