decision relevance

Question 1

relevant costs

Answer 1

future, incremental, cash

Question 2

irrelevant cash flow

Answer 2

cmmitted, non-cash flow, fixed overheads, sunk, NBV

Question 3

OPPORTUNITY COST

Answer 3

value of benefit sacrificed when course of action chosen, in preference to alternative

Question 4

conventional accounting

Answer 4

historical costs, aims to recover past cpsts and has limited relevace for decision making

Question 5

what does conventional accounting include

Answer 5

fixed costs and only considers incurred costs

Question 6

decision relevant approach

Answer 6

aims to maximise net cash inflows and alings with maximising corporate wealth by considering future cash flowd associated with different actions

Question 7

qualitative factors

Answer 7

considerations include:
- employees
- customers
- competitors
- suppliers
- flexibility
- internal control

Question 8

what is DR relevant for?

Answer 8

non-routine operating decisions

Question 9

DR time scale

Answer 9

short-term