Prologue

Question 1

Differentiate Financial and Managerial Accounting

Answer 1

Financial Accounting: for External Persons, Historical Perspective, Emphasis on Objectivity and Verifiability, Emphasis on Precision, Primarily focus is on company wide report, Must follow GAAP/IFRS, Mandatory

Managerial Accounting: for Managers, Future emphasis, emphasis on relevance, emphasis on timeliness, focus on segment reports, not bound by GAAP/IFRS, Not Mandatory

Question 2

Enumerate the three main activities of Maagerial Accounting

Answer 2

Planning, Controlling, Decision Making

Question 3

Enumerate the three objectives of planning

Answer 3

1. Establish Goals
2. Specify How Goals Will Be Achieved
3. Develop Budgets

Question 4

What is a budget?

Answer 4

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

Question 5

What is Controlling?

Answer 5

Controlling involves gathering feedback and preparing performance reports to ensure that the plan is being properly executed or modified as circumstances change.

Question 6

What is Decision Making?

Answer 6

Decision Making involves makin a selection among competing alternatives

Question 7

What are the three questions normally asked in Decision Making?

Answer 7

1. What should we be selling?
2. Who should we be serving?
3. How should we execute?

Question 8

Enumerate the main business majors

Answer 8

1. Marketing Majors
2. Operations Management Majors
3. HRM Majors
4. Accounting Majors

Question 9

What is a Certified Management Accountant?

Answer 9

A management accountantwho has the necessary qualifications and who passes a rigorous professional exam earns the right to be known as a Certified Management Accountant (CMA).

Question 10

What is a Strategy?

Answer 10

A strategy is a “game plan” that enables a company to attract customers by distinguishing itself from competitors.

Question 11

What are the three Customer Value Propositions?

Answer 11

1. Customer Intimacy Strategy
2. Operational Excellence Strategy
3. Product Leadership Strategy

Question 12

What is Enterprise Risk Management?

Answer 12

A process used by a company to proactively identify and manage risk.

Question 13

What is Customer Intimacy Strategy?

Answer 13

Understand and respond to individual customer needs.

Question 14

What is Operational Excellence Strategy?

Answer 14

Deliver products and services faster, more conveniently, and at lower prices.

Question 15

What is Product Leadership Strategy?

Answer 15

Offer higher quality products

Question 16

What is a business process?

Answer 16

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

Question 17

What is Lean Production?

Answer 17

Lean production or Just-In-Time (JIT) Production is a management approach that organizes resources such as people and machines around the flow of business processes and that only produces units in response to customer orders.

Question 18

What is a Constraint?

Answer 18

A constraint (also called a bottleneck) is anything that prevents you from getting more of what you want. The constraint in a system is determined by the step that has the smallest capacity.

Question 19

Enumerate the 4-step process in the Theory of Constraints

Answer 19

 Identify the weakest link in the chain, which is the constraint.

 Do not place a greater strain on the system than the weakest link can handle – if you do, the chain will break.

 Concentrate improvement efforts on strengthening the weakest link.

 If the improvement efforts are successful, eventually the weakest link will improve to the point that it is no longer the weakest link. At this point, a new weakest link must be identified and the improvement process starts over again.

Question 20

Enumerate the Six Skills of an Effective Leader

Answer 20

1. Technical competence
2. High integrity
3. Understand how to implement organizational change
4. Strong communication skills
5. Capable of motivating and mentoring other people
6. Effectively manage team-based decision processes

Question 21

Enumerate the four areas of the IMA Guidelines for Ethical Behavior

Answer 21

1. Competence
2. Confidentiality
3. Integrity
4. Credibility

Question 22

What is Corporate Social Responsibility (CSR)?

Answer 22

Corporate social responsibility (CSR) is a concept whereby organizations consider the needs of all stakeholders when making decisions. CSR extends beyond legal compliance to include voluntary actions that satisfy stakeholder expectations.

Question 23

Enumerate the 6 main stakeholders of a business

Answer 23

Stakeholders include groups, such as customers, employees, suppliers, communities, stockholders, and environmental and human rights advocates, whose interests are tied to the company’s performance.

Question 24

What are the two parts that the IMA offers guidelines in the Code of Conduct?

Answer 24

1. Ethical Behavior
2. Resolution for an ethical conflict