Managerial Accounting - Chapters 1&2

Question 1

What are IMA is over arching ethical principles?

Answer 1

Honesty fairness objectivity and responsibility

Question 2

Customer value propositions

Answer 2

Customer intimacy, operational excellence, and product leadership

Question 3

Enterprise risk management

Answer 3

A process used by a company to identify those risks and develop responses to them to enable it to be reasonably assured of meeting its goals

Question 4

Corporate social responsibility

Answer 4

The concept where my organizations consider the needs of all stakeholders when making decisions. It extends beyond legal compliance to include voluntary actions that satisfies stakeholder expectations

Question 5

Business process

Answer 5

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

Question 6

Lean production

Answer 6

A management approach that organizes resources such as people and machines around the flow of business processes and it only produces units in response to customer orders it is often called just in time production

Question 7

Intrinsic motivation

Answer 7

Motivation that comes from within us

Question 8

Three attributes of a credible leader

Answer 8

Technical competence personal integrity and strong communication skills

Question 9

Cognitive bias

Answer 9

Distorted thought processes

Question 10

Budget

Answer 10

A detailed plan for the future that is usually expressed in formal quantitative terms

Question 11

Controlling

Answer 11

The process of gathering feedback to ensure a plan as being properly executed or modified as circumstances change

Question 12

Financial accounting

Answer 12

The phase of accounting that is concerned with reporting historical financial information to external parties such as stockholders creditors and regulators

Question 13

Performance report

Answer 13

A report that compares budgeted data to actual data to highlight instances of excellent and unsatisfactory performance

Question 14

Planning

Answer 14

Developing goals and preparing budgets to achieve those goals

Question 15

Segment

Answer 15

Any part or activity of an organization about which manager seek cost revenue or profit data

Question 16

Strategy

Answer 16

Accompanies game plan for attracting customers by distinguishing itself from competitors

Question 17

Value chain

Answer 17

The major business functions that add value to the company’s products and services, such as research and development, product design, manufacturing, marketing, distribution, and customer service

Question 18

Corporate governance

Answer 18

The system by which a company as directed and controlled

Question 19

Sarbanes-Oxley act of 2002

Answer 19

Requires that both the CEO and CFO certify in writing their company’s financial statements

Established the public Company accounting oversight Board

Places the power to higher compensation terminate the public accounting firm that audits the company’s financial reports in the hands of the audit committee of the Board of Directors

Prohibits the public accounting firm from providing a wide variety of non-auditing services to an audit client

Requires a company’s annual report to contain an internal control report

Establishes severe penalties for altering or destroy any documents that may be eventually used in an official proceeding

Question 20

Internal control

Answer 20

Process designed to provide reasonable assurance that the objectives are being achieved

Question 21

What is managerial accounting?

Answer 21

The phase of accounting that is concerned with providing information to managers for use within the organization

Managerial accounting consists of planning controlling and decision-making

Question 22

Used to assign easily traced cost to objects

Answer 22

Direct cost

Question 23

Used to assign cost two objects that cannot be easily traced

Answer 23

Indirect cost

Question 24

Accounting costs for manufacturing companies

Answer 24

Direct materials, direct labor, manufacturing overhead

Question 25

Nonmanufacturing costs for manufacturing companies

Answer 25

Selling costs, administrative cost

Question 26

Cost use for preparing financial statements

Answer 26

Product costs (Inventoriable), Period Costs (expensed)

Question 27

Cost used in predicting cost behavior in response to changes in activity

Answer 27

Variable cost (proportional to activity), 
fixed cost (constant in total), 
mixed cost (has variable and fixed elements)

Question 28

Cost classification for making decisions

Answer 28

Differential cost (difference between alternatives), 
sunk cost (should be ignored), 
opportunity cost (foregone benefit)

Question 29

Anything for which cost data are desired including products customers jobs and organizational subunits

Answer 29

Cost object

Question 30

Cost behavior

Answer 30

refers to how it cost reacts to changes in the little activity as the activity level rises and falls a particular cost may rise and fall as well or remain constant