Key Terms I

Question 1

Budgets

Answer 1

A detailed plan for the acquisition and use of financial and other resources over a specified time period

Question 2

Budgeting

Answer 2

The organisational process by which the budget is made

Question 3

Business process

Answer 3

A series of steps that are followed in order to carry out some task in a business

Question 4

Constraints

Answer 4

A limitation under which a company must operate, such as limited machine time available that restricts the company’s ability to satisfy demand

Question 5

Control

Answer 5

The process of instituting procedures and then obtaining feedback to ensure that all parts of the organisation are functioning effectively and moving towards overall company goals

Question 6

Controlling

Answer 6

Ensuring that the plan is actually carried out and is appropriately modified as circumstances change

Question 7

Corporate governance

Answer 7

Narrowly defined as the mechanisms that are used to protect the interests of the suppliers of capital to corporations

Question 8

Decentralisation

Answer 8

The delegation of decision-making authority throughout an organisation by providing managers at various operating levels with the authority to make key decisions relating to their area of responsibility

Question 9

Decision making

Answer 9

Selecting a course of action from competing alternatives

Question 10

Directing and motivating

Answer 10

Mobilising people to carry out plans and run routine operations

Question 11

Enterprise resource planning (ERP)

Answer 11

The installation of integrated real time management information systems

Question 12

Environmental management accounting

Answer 12

Collects and uses information on environment-related costs, earnings and savings for internal decision making

Question 13

Feedback

Answer 13

Accounting and other reports that help managers monitor performance and focus on problems and/or opportunities that might otherwise go unnoticed

Question 14

Financial accounting

Answer 14

The phase of accounting concerned with providing information to shareholders, creditors and others outside the organisation

Question 15

Just-in-time (JIT)

Answer 15

A production and inventory control system in which materials are purchased and units are produced only as needed to meet actual customer demand

Question 16

Line

Answer 16

A position in an organisation that is directly related to the achievement of the organisations basic objectives

Question 17

Management accounting

Answer 17

The phase of accounting concerned with providing information to managers for use in planning and controlling operations and in decision-making

Question 18

Organisation chart

Answer 18

A visual diagram of a firms organisational structure that depicts formal lines of reporting, communication and responsibility between managers

Question 19

Outsourcing

Answer 19

The use of external suppliers to provide goods and services that used to be provided inside the organisation

Question 20

Performance report

Answer 20

A detailed report comparing budgeted data to actual data

Question 21

Planning

Answer 21

Selecting a course of action and specifying how the action will be implemented

Question 22

Planning and control cycle

Answer 22

The flow of management activities through planning, directing and motivating and controlling, and then back to planning again

Question 23

Segments

Answer 23

Any part of an organisation that can be evaluated independently of other parts and about which the manager seeks financial data. E.g product line, division, department

Question 24

Shared service centres

Answer 24

Single locations where the support services of an entire corporation are concentrated

Question 25

Staff

Answer 25

A position in an organisation that is only indirectly related to the achievement of the organisations basic objectives.

Question 26

Total quality management (TQM)

Answer 26

An approach to continuous improvement that focuses on customers and using teams of front-line workers to systematically identify and solve problems