Chapter 1 Managerial Accounting - Intro

  1. Data (p. 2)
    Reports such as financial statements,customer lists, and inventory records.
  2. Information (p. 2)
    Data that have been organized, processed,and summarized.
  3. Knowledge (p. 2)
    Information that is shared and exploited so that it adds value to an organization.
  4. AIS(Accounting Information System) (p. 3)
    A transaction-processing system that captures financial data resulting from accounting transactions within a company
  5. Financial accounting (p. 5)
    The area of accounting concerned primarily with the preparation and use of financial statements by creditors, investors, and other users outside the company.
  6. Managerial Accounting (p. 5)
    The area of accounting concerned primarily with generating financial and nonfinancial information for use by managers in their decision-making roles within a company.
  7. External users (p. 5)
    Stockholders, potential investors, creditors, government taxing agencies, regulators, suppliers, customers, and others outside the company.
  8. Internal users (p. 6)
    Individual employees, teams,departments, regions, top management, and others inside the company—often referred to as managers.
  9. Planning (p. 6)
    The development of both the short-term (operational) and long-term (strategic) objectives and goals of an organization and the identification of the resources needed to achieve them.
  10. Operational Planning (p. 6)
    The development of short-term objectives and goals (typically, those to be achieved in less than one year).
  11. Strategic Planning (p. 6)
    Addresses long-term questions of how an organization positions and distinguishes itself from competitors.
  12. Operating Activities (p. 6)
    The day-to-day operations of a business
  13. Controlling Activities (p. 6)
    The motivation and monitoring of employees and the evaluation of people and other resources used in the operation of the organization.
  14. Operations and production function (p. 7)
    Produces the products or services that an organization sells to its customers.
  15. Marketing function (p. 7)
    Involved with the process of developing, pricing,promoting, and distributing goods and services sold to customers.
  16. Finance function (p. 7)
    Responsible for managing the financial resources of the organization.
  17. Human resource function (p. 7)
    Concerned with the utilization of human resources to help an organization reach its goals.
  18. Decision Making (p. 9)
    The process of identifying alternative courses of action and selecting an appropriate alternative in a given decision-making situation.
  19. Relevant costs (p. 10)
    Costs which differ among alternatives.
  20. Sunk cost (p. 10)
    Cost that have already been incurred
  21. Opportunity costs (p. 10)
    The benefits forgone by choosing one alternative over another.
  22. Ethics programs (p. 12)
    Company programs or policies created for the express purpose of establishing and maintaining an ethical business environment.
Card Set
Chapter 1 Managerial Accounting - Intro
Introduction to Managerial Accounting