Chap 1

  1. What is the definition of accounting?
    The process of identifying, measuring and communicating financial information about an entity.
  2. What is the contingency approach?
    • Describes the process of creating a control system for a given set of purposes.
    • Control systems depend on: The external environent of the business, the production technology, the size of the organization and the corporate strategy
  3. What is strategic management accounting?
    • Identification, measurement and communication of cost data.
    • In situations, where the organization is being judged against the performance of competitors
  4. What is the management functions?
    • Planning
    • -Immediate future
    • -Long term
    • eg. sales, producation capital expenditure
    • Decision making
    • -About resources
    • -About activities
    • -Financial matters, particularly cost
    • -Impact on employees
    • -Impact on competitors
    • Control
    • -Is and outcome in accordance with the initial plans and objectives?
    • -Plans include costs and profit
    • -Timely, relevant and accurate information
    • -Cost measurement
    • -Effective communication
    • -Organizational structure
    • -Responsibility and authority
  5. Functions of management accounting?
    • Directing attention
    • who should take action?, who is responsible?
    • etc..
    • Fairness and timeliness, responsibility, regognize achievements, demonstrate accountability
    • Keeping score
    • How much? how many?
    • Record keeping
    • Completeness and fairness (matching cost to itmes, time periods)
    • Solving problems
    • Why did that plan go well? Why did that action fail?
    • Relevance
    • Choices
    • Base for understanding the problem
Card Set
Chap 1
Chap 1