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WMBA 6010 - Managerial Accounting > Chapter 1 | The Crucial Role of Managerial Accounting in a Dynamic Business Environment > Flashcards

Chapter 1 | The Crucial Role of Managerial Accounting in a Dynamic Business Environment Flashcards

1
Q

1-1 What two things does all organizations have in common?

A
  1. Every organization has a set of goals or objectives
  2. In pursuing an organization’s goals, managers need information.
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2
Q

1-1 What is the process of identifying, measuring, analyzing, interpreting, and communication information in pursuit of an organizational’s goals? ___ is an integral part of the management process, and all managers use the tool of _____.

A

Managerial accounting

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3
Q

1-1 Who are specialists in using the tools of managerial accounting? ____ help the organization make decisions and supports its managers in running the operation effectively.

A

Managerial accountants

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4
Q

1-1 What are managerial accountants often referred to as?

A

Analyst

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5
Q

1-2 What are these considered? Funding, patents, and buildings

A

Resources

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6
Q

1-2 What does an organization do in pursuing its goals (3)?

A
  1. Acquire resources
  2. Hires people
  3. Engages in an organized set of activities
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7
Q

1-2 In trying to achieve the organization’s goals, what are the 4 activities that comprise the day-to-day work of the management team?

A
  1. Decision making
  2. Planning
  3. Directing operational activities
  4. Controlling
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8
Q

1-2 What activity entails choosing among the available alternatives (ex: Disney’s growth objective of expanding into the online entertainment streaming business)?

A

Decision making

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9
Q

1-2 What activity entails developing detailed financial and operational models of anticipated operations (ex: for Disney - What types of content would Disney+ carry? What content ratings? What pricings? What technology? etc.)

A

Planning

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10
Q

1-2 What activity entails running the organization on a day-to-day basis? (ex: What advertising should be purchased for new Disney+ releases? What partnership deals should be signed? How much money should go toward paying influencers? How much cash is needed for payroll?)

A

Directing operational activities

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11
Q

1-2 What activity entails ensuring that the organization operates in the intended manner and achieves its goals? (ex: Are goals being achieved? How do we measure that? Most importantly, have operations adhered to the plans developed by management for achieving the goals?)

A

Control

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12
Q

1-2 What does MAP stand for?

A

Managing Accounting Practice

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13
Q

1-3 What comprises a set of tools, systems, and perspectives that add value to an organization?

A

Managerial accounting activity

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14
Q

1-3 What is the first major objective of managerial accounting activity? (Ex: Disney’s decision to establish Disney+ would be influenced by estimates of the costs of creating content and attracting subscribers. Disney’s managers and accountants work together on teams as decisions were made and plans formulated)

A

Providing information for decision making and planning

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15
Q

1-3 What is the second major objective of managerial accounting activity? (Ex: Disney+ management team would need data about customer support call demand patterns in order to make sure appropriate staffing)

A

Assisting managers in directing and controlling operational activities

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16
Q

1-3 What is the function of managerial accounting information in pointing out to managers issues that need their attention? (ex: Disney+ electricity costs significantly exceeding the budget directs management’s attention to the situation)

A

Attention-directing function

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17
Q

1-3 What does it mean to find a way to generate revenues from users in order to make a profit after the costs of providing the Internet service or content?

A

Monetize the internet

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18
Q

1-3 What is the third major objective of managerial accounting activity? (Ex: One means of achieving this is through budgeting, which emphasizes how resources are to be shared and what activities are to be emphasized)

A

Motivating managers and other employees toward the organization’s goals

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19
Q

1-3 What is the fourth major objective of managerial accounting activity? This can then be used as the basis for rewarding performance through positive feedback, promotions, and pay raises

A

Measuring the performance of activities, subunits, managers, and other employees within the organization

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20
Q

1-3 What is the fifth major objective of managerial accounting activity? The questions asked could include: How well is the organization doing in its internal operations, eyes of its customers, the standpoint of innovation, and financially?

A

Assessing the organization’s competitive position, and working with other managers to ensure the organization’s long-run competitiveness in its industry

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21
Q

1-3 What is an example of a managerial accounting tool used to assess competitive position and ensure long-run competitiveness? This is a model of business performance evaluation that includes several types of financial and nonfinancial performance measures, typically comprising the following perspectives: financial, customer, internal business process, and learning and growth.

A

Balanced scorecard

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22
Q

1-3 What are the 4 perspectives on the balanced scorecard?

A

Customer, financial, internal business process, and learning and growth

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23
Q

1-3 What two categories are listed under each of the 4 perspectives on the balanced scorecard?

A

Goals and measures

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24
Q

1-4 What is the focus of managerial accounting?

A

The needs of managers WITHIN the organization

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25
Q

1-4 What is the use of accounting information for reporting to parties outside the organization? (Ex: Annual report distributed by a company to its stockholders)

A

Financial accounting

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26
Q

1-4 What is the system of procedures, personnel, and computers used to accumulate and store financial data in the organization, and is one part of the organization’s management information system?

A

An organization’s core accounting system

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27
Q

1-4 What accumulates data about the costs of producing the company’s outputs (goods and services), and is one part of the organization’s overall accounting system?

A

Cost accounting system

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28
Q

1-4 What kind of users are managers at all levels in the organization?

A

Internal users of information

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29
Q

1-4 What kind of users are stockholders, financial analysts, lenders, unions, consumer groups, and governmental agencies?

A

External users of information

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30
Q

1-4 Which type of accounting is not required and unregulated because it is only intended for management?

A

Managerial accounting

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31
Q

1-4 Which type of accounting is required and must conform to generally accepted accounting principles, with regulators including the International Accounting Standards Board?

A

Financial accounting

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32
Q

1-4 Which type of accounting reports often focus on subunits within the organization, such as departments, divisions, geographical regions, or product lines? Based on a combination of historical data, estimates, and projections of future events

A

Managerial accounting

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33
Q

1-4 Which type of accounting reports focus on the enterprise in its entirety, and are generally consolidated from the reports of geographic or business segment divisions? Based almost exclusively on historical transaction data

A

Financial accounting

34
Q

1-5 Managers in what type of executive positions are directly involved in the provision of goods or services? (Ex: At Disney, the chairman of Disney Studios Content, general manager of Disney’s Star Wars Hotel, production manager of the Star Wars film)

A

Line positions

35
Q

1-5 Managers in what type of executive positions are only indirectly involved in producing an organization’s product or service? (Ex: At Disney, the general counsel, the chief communications officer, and the CFO)

A

Staff positions

36
Q

1-6 Who is the executive responsible for all accounting and finance functions in an organization? The organization’s top managerial and financial accountant and has responsibility for supervising the accounting and finance specialists throughout the company and for preparing the information and reports used in both managerial and financial accounting.

A

Chief financial officer (CFO)

37
Q

1-6 What is the CFO sometimes called in smaller companies?

A

Controller

38
Q

1-6 What is the CFO sometimes called in nonprofit or governmental organizations?

A

Comptroller

39
Q

1-6 Who typically is responsible for raising capital and safeguarding the organization’s assets? In addition, responsible for management of the organization’s cash and investments, its credit policy, and its insurance coverage.

A

Treasurer

40
Q

1-6 Who is responsible for reviewing the accounting procedures, records, and reports in both the managerial and financial accounting areas of responsibility?

A

Internal auditor

41
Q

1-7 What key element of an organization is how it creates value that customers will pay for or that, in a nonprofit, will satisfy its mission?

A

Value chain

42
Q

1-7 What key element of an organization is the output that can result from the resources it spends money on to produce that value?

A

Capacity

43
Q

1-7 What key element of an organization is how the organization makes sense of the massive amount of data generated by and relating to its operation?

A

Data analytics

44
Q

1-7 What is an organization’s set of linked, value-creating activities, ranging from securing basic raw materials and energy to the ultimate delivery of products and services?

A

Value chain

45
Q

1-7 How does a company achieve a sustainable competitive advantage? (2)

A

1) Perform one or more activities in the value chain at the same quality level as its competitors, but at a lower cost
2) Perform its value chain activities at a higher quality level than its competitors, and at no greater cost

46
Q

1-7 What is a characteristic of an activity or event that results in the incurrence of costs by that activity or event? Includes production volume, sales volume, product mix, number of orders, number of production runs, number of parts, types of services provided

A

Cost driver

47
Q

1-7 What refers to the correlation (causal or not) between costs and cost drivers?

A

Cost relationship

48
Q

1-7 What is the overall recognition of the importance of cost relationships among the activities in the value chain, the process of managing those cost relationships to the firm’s advantage?

A

Strategic cost management

49
Q

1-8 What is the amount of resources a company applies to its value chain and the upper limit on the amount of goods or services that an organization can produce in a specified period of time using those resources?

A

Capacity

50
Q

1-8 What is the upper limit on production of goods or services, for the amount of resources provided, if everything works perfectly?

A

Theoretical capacity

51
Q

1-8 What is the upper limit on the amount of goods or services that an organization can produce in a specified period of time, allowing for normal occurrences such as machine downtime or employee fatigue or illness.

A

Practical capacity

52
Q

1-8 What is the first question for the managerial accounting system to address?

A

What is an organization’s practical capacity?

53
Q

1-8 What is the second question for the managerial accounting system to address?

A

What are the costs of the resources supplied to provide that capacity?

54
Q

1-8 What is the third question for the managerial accounting system to address?

A

How have those resources been used in creating value?

55
Q

1-8 What is the cost of your labor resource unused also known as?

A

Cost of unused capacity

56
Q

1-9 What is a massive volume of both structured and unstructured data that is so large and/or complex it is difficult to analyze for insights using traditional methods?

A

Big data

57
Q

1-9 What is the process of making sense of big data and developing true and helpful insights from it?

A

Data analytics

58
Q

1-9 What is the set of processes and procedures a company uses to make sure that data presented for analysis is accurate, complete, and suitably formatted for processing? One of the primary challenges of big data - making sure that so much data are valid and usable

A

Data governance

59
Q

1-9 What is the theory, tools, and techniques used to analyze data in order to provide insights from it that are useful for decision makers? Other key challenge of big data - analyze large volume of data and draw insights from it that are useful for decision makers

A

Data science

60
Q

1-10 What does CPA stand for?

A

Certified Public Accountants

61
Q

1-10 What organization has over 140,000 members and publishes a practitioner-oriented journal about managerial accounting practice entitled Strategic Finance?

A

Institute of Management Accountants (IMA)

62
Q

1-10 What is the primary professional association for managerial accountants outside of the US?

A

Chartered Institute of Management Accountants (CIMA)

63
Q

1-10 What title does an accountant who has earned professional certification in managerial accounting from the Institute of Management Accountants have?

A

Certified Management Accountant (CMA)

64
Q

1-10 What title does an accountant who has earned professional certification in managerial accounting from the American Institute of CPAs and the Chartered Institute of Management Accountants have?

A

Chartered Global Management Accountant (CGMA)

65
Q

1-11 Managers must learn ______ to identify requests or opportunities that cross ethical boundaries and must think about how they will respond to them.

A

In advance

66
Q

1-11 What are the IMA’s 4 overarching ethical principles?

A

Honesty, Fairness, Objectivity, and Responsibility

67
Q

1-11 What are the IMA’s 4 standards that IMA members have a responsibility to comply with and uphold?

A

Competence, Confidentiality, Integrity, and Credibility

68
Q

What kind of accounting is used to gather information in pursuit of an organization’s goals?

A

Managerial

69
Q

Contemporary managerial accounting systems are more and more focused on ______.

A

activities that occur at all levels of the organization

70
Q

Preparation of a budget is part of the _____ activity.

A

planning

71
Q

When assessing an organization’s competitiveness, managers are concerned with _____.

A

innovation, customer opinions, and financial viability

72
Q

The balanced scorecard uses both ____ and _____ performance measures.

A

financial and nonfinancial

73
Q

True or false: There is a strong trend toward the presentation of both financial and nonfinancial data

A

True

74
Q

What types of organizations use managerial accounting information?

A

profit seeking and nonprofit enterprises

75
Q

Making sure that big data is valid and usable is called ____________.

A

Data governance

76
Q

True or false: Customers must be willing to pay the cost of value chain activities plus profit or the company will fail.

A

True

77
Q

True or false: Value creating activities can be provided by suppliers

A

True

78
Q

True or false: Companies define their value chains in different ways.

A

True

79
Q

Most of the purely accounting issues in ethical scandals involve ______ accounting.

A

financial

80
Q

The purpose of the ___ designation is to assure the competence of those working outside of organizations.

A

CPA

81
Q

What are the two management accounting certifications?

A

CGMA
CMA

WMBA 6010 - Managerial Accounting (2 decks)

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