Chapter 1: The Manager and Management Accounting

Question 1

Financial Accounting

Answer 1

focuses on reporting financial information to external parties such as investors, government agencies, banks and suppliers based on Generally Accepted Accounting Principles (GAAP)

Question 2

Management Accounting

Answer 2

is the process of measuring, analyzing, and reporting financial and non-financial information that helps managers make decisions to fulfill the goals of an organization

Question 3

Cost Accounting

Answer 3

is the process of measuring, analyzing, and reporting financial and non-financial information related to the costs of acquiring or using resources in an organization

Question 4

Cost Management

Answer 4

to describe the activities managers undertake to use resources in a way that increases a product’s value to customers and achieves an organization’s goals

Question 5

Strategy

Answer 5

specifies how the organization matches its own capabilities with the opportunities in the marketplace

Question 6

Strategic Cost Management

Answer 6

describes cost management that specifically focuses on strategic issues

Question 7

Value Chain

Answer 7

is the sequence of business functions by which a product is made progressively more useful to customers

Question 8

Research and Development (R&D)

Answer 8

generating and experimenting with ideas related to new products, services or processes

Question 9

Design of Products and Processes

Answer 9

detailed planning, engineering, and testing of products and processes

Question 10

Production

Answer 10

procuring, transporting, and storing (“inbound logistics”) and coordinating and assembling (“operations”) resources to produce a product or deliver a service

Question 11

Marketing (including sales)

Answer 11

promoting and selling products or services to customers or prospective customers

Question 12

Distribution

Answer 12

processing orders and shipping products or services to customers (“outbound logistics”)

Question 13

Customer Service

Answer 13

providing after-sales service to customers

Question 14

Value Chain Sequence (6)

Answer 14

1. Research and Development
2. Design of Products and Processes
3. Production
4. Marketing
5. Distribution
6. Customer Service

Question 15

Customer Relationship Management (CRM)

Answer 15

a strategy that integrates people and technology in all business functions to deepen relationships with customers, partners, and distributors

Question 16

Supply Chain

Answer 16

describes the flow of goods, services, and information from the initial sources of materials and services to the delivery of products to consumers, regardless of whether those activities occur in one organization or in multiple organizations

Question 17

Supply Chain Sequence for a Cola Bottling Company (6)

Answer 17

1. Suppliers of Cola-Concentrate Ingredients
2. Manufacturer of Concentrate
3. Bottling Company
4. Distribution Company
5. Retail Company
6. Final Consumer

Question 18

Cost and efficiency

Answer 18

Companies face continuous pressure to reduce the cost of the products they sell.

Question 19

Quality

Answer 19

Customers expect high levels of quality.

Question 20

Total quality management (TQM)

Answer 20

is an integrative philosophy of management for continuously improving the quality of products and processes.

Question 21

Time

Answer 21

has many dimensions.

Question 22

Innovation

Answer 22

A constant flow of innovative products or services is the basis for the ongoing success of a company.

Question 23

Sustainability

Answer 23

the development and implementation of strategies to achieve long-term financial, social, and environmental goals.

Question 24

The Five-Step Decision-Making Process

Answer 24

1. Identify the problem and uncertainties
2. Obtain information
3. Make predictions about the future
4. Make decisions by choosing among alternatives
5. Implement the decision, evaluate performance, and learn