Managerial Accounting chpt 1
Terms
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- Accounting Information Systems (AIS)
- a transaction processing sys. that captures financial data resulting from accounting transactions within a company
- Enterprise resource planning Systems (ERP)
- sys used to collect, organize, report, and distribute organizational data and transform that data into critical information and knowledge
- Data
- reports, such as financial statements, customer lists, and inventory records
- Information
- data that have been organized, processed and summarized
- Knowledge
- Information that have been organized, processed, and summarized
- Data Warehouses
- central depositories for electronic data
- Data Mining
- a process of searching for and extracting information from data
- Knowledge Warehouses
- Used to store and provide access to a wide variety of qualitative data
- Electronic data interchange (EDI)
- The elctronic transmission of data, such as purchase orders and invoices
- Financial Accounting
- the area of accounting primarily concerned with the preparation and use of general use financial statements for use by creditors, investors, and other users outside the company
- Managerial Accoutning
- the area of accounting primarily concerned with generating financial and nonfinancial information for users by managers in their decision-making roles within a company
- External Users
- Stockholders, potential investors, creditors, gov't taxing agencies, regulators, suppliers, customers, and other outside the company
- Internal Users
- Individual employees, teams, departments, regions, top management, and other inside the company- often referred to as managers
- Planning
- the development of both short term (operational)and long term (stategic) and goals of an organization and an identification of the resources needed to achieve them
- Operational Planning
- development of short term objectives and goals (typically those to be achieved in less than one year)
- Strategic planning
- addresses long-term questions of how an organization positions and distinguishes itself from competitors
- Operating Activities
- the day to day operations of a business
- Controlling Activities
- the motivation and monitoring of employees and the evaluation of people and other resources used in the operations of the organization
- Operations and production function
- produces the products or services that an organization sells to its customers
- Marketing function
- involved with the process of developing, pricing, promoting, and distributing goods and services sold to customers
- Finance function
- responsible for managing the financial resources of the organization
- Human Resource function
- concerned with the utilization of human resources to help an organization reach its goals
- Decision Making
- the process of identifying alternative courses of action and selecting an appropriate alternative in a given decision-making situation
- Quantitative
- can be expressed in terms of dollars or other quantities (units, pounds, etc.)
- Qualitative
- deals with nonnumerical attributes or charateristics
- Relevant Costs
- those costs that differ between alternatives
- sunk costs
- costs that have already been incurred
- Opportunity Costs
- the benefits forgone by choosing one alternative over another
- Risk
- the likelihood that an option chosen in a decision situation will yeild unsatisfactory results
- Sensitivity analysis
- the process of changing the values of key variables to determine how sensitive decisions are to those changes