Managerial Accounting and the Business Organization

Question 1

Planning

Answer 1

Setting objectives and outlining how the objectives will be

obtained

Question 2

Control

Answer 2

Process of implementing plans and using feedback to evaluate the achievement of objectives.

Question 3

Managment Accounting

Answer 3

Process of identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating information that helps managers within an organization to fulfill organizational objective

Question 4

Financial Accounting

Answer 4

Develops information for external decision makers such as Investors, Suppliers, Banks, Government Authorities,…

Question 5

Scorecard Questions

Answer 5

Evaluate organizational performance by accumulation and classification of data

Question 6

Attention Directing

Answer 6

Compare actual results to expected focusing on operating problems and opportunities

Question 7

Problem Solving

Answer 7

Quantifies the likely results of possible courses of action for long- range planning to assess possible courses of action

Question 8

Performance Report

Answer 8

• compares actual results with budgeted amounts
• provide feedback by comparing results with plans
• highlight variances

Question 9

Cost Benefit Balance

Answer 9

Weighing estimated costs against probable benefits, i.e. value of a system must be seen as exceeding its cost.

Question 10

Behavioral Implications

Answer 10

Accounting system’s effects on the behavior (decisions) of managers. A system that managers believe in and trust will be used more in making decisions than one they distrust.

Question 11

Management Accountants Role as Consultant

Answer 11

• Collecting and compiling information
• Preparing standardized reports
• Interpreting and analyzing information
• Being involved in decision making but not making the decision

Question 12

Current Trends

Answer 12

• Shifting from a manufacturing-based to a service-based economy
• Increased global competition
• Advances in technology (such as digitalization, software solutions)
• Changes in business processes
• Changes resulting from new government regulations and public awareness

Question 13

Shifting from manufacturing-based to service-based economy

Answer 13

Common characteristics of service organizations:

• Labor (and not raw material) is a major component of costs.
• Output is intangible and thus usually difficult to measure.
• Service organizations cannot store their major inputs and outputs.

Question 14

Advances in technology

Answer 14

E-commerce
- Collection, storage, availability and interpretation of (accounting)
information
- Growing use of Enterprise resource planning (ERP)

Question 15

Chances in business process

Answer 15

Just-in-time (JIT) philosophy

• Lean manufacturing
• Computer-integrated manufacturing
• Quality standards