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Managerial Accounting Core Concepts
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1
Question
What is the definition of "Big Data" in managerial accounting context?
Page 1
Answer
Large collections of data gathered from inside or outside a company to provide opportunities for ongoing reporting and analysis.
2
Question
How is a "Budget" defined?
Page 1
Answer
A plan for the future expressed in formal quantitative terms.
3
Question
What is a "Business process"?
Page 1
Answer
A series of steps followed in order to carry out some tasks in a business.
4
Question
Define "Controlling" in managerial accounting.
Page 1
Answer
The process of gathering feedback to ensure a plan is being properly executed or modified as circumstances change.
5
Question
What is "Data analytics"?
Page 1
Answer
The process of analyzing data with the aid of specialized systems and software to draw conclusions about the information they contain.
6
Question
How is "Decision making" defined?
Page 1
Answer
Selecting a course of action from competing alternatives.
7
Question
What is a "Detective control"?
Page 1
Answer
A control that detects undesirable events that have already occurred.
8
Question
Define "Enterprise risk management".
Page 1
Answer
A process used by a company to identify its risks and develop responses to them that enable it to be reasonably assured of meeting its goals.
9
Question
What does "ESG" stand for and what does it measure?
Page 1
Answer
Environmental, Social, and Governance; three criteria used by stakeholders for gauging the sustainability and ethical impacts of a company.
10
Question
What is "Lean Production"?
Page 1
Answer
A management approach that organizes resources such as people and machines around the flow of business processes and only produces units in response to customer orders.
11
Question
Define "Managerial accounting".
Page 1
Answer
The phase of accounting that provides information to managers for use within the organization.
12
Question
What is a "Performance report"?
Page 1
Answer
A report comparing budgeted data to actual data to highlight instances of excellent and unsatisfactory performance.
13
Question
How is "Planning" defined in managerial accounting?
Page 1
Answer
The process of establishing goals and specifying how to achieve them.
14
Question
What is a "Preventive control"?
Page 1
Answer
A control that deters undesirable events from occurring.
15
Question
What is a "Segment" in managerial accounting?
Page 1
Answer
Any part or activity of an organization about which managers seek cost, revenue, or profit data.
16
Question
Define "Strategy" in this material.
Page 1
Answer
A 'game plan' that is difficult to replicate and differentiates a company from its competitors in ways that attract and retain customers.
17
Question
What is a company's "Value chain"?
Page 1
Answer
The major business functions adding value to a company’s products and services, such as research and development, product design, manufacturing, marketing, distribution, and customer service.
18
Question
What is an "Activity base"?
Page 2
Answer
A measure of whatever causes the incurrence of a variable cost.
19
Question
What are "Administrative costs"?
Page 2
Answer
All executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing or selling.
20
Question
Define "Committed fixed costs".
Page 2
Answer
Investments in facilities, equipment, and basic organizational structure that can’t be significantly reduced even for short periods of time without making fundamental changes.
21
Question
What is a "Common cost"?
Page 2
Answer
A cost incurred to support a number of cost objects that cannot be traced to them individually.
22
Question
Explain the "Contribution approach" to income statements.
Page 2
Answer
An income statement format that organizes costs by their behavior; costs are separated into variable and fixed categories rather than being separated into product and period costs for external reporting purposes.
23
Question
What is "Contribution margin"?
Page 2
Answer
The amount remaining from sales revenues after all variable expenses have been deducted.
24
Question
Define "Conversion cost".
Page 2
Answer
Direct labor cost plus manufacturing overhead cost.
25
Question
What does "Cost behavior" refer to?
Page 2
Answer
The way in which a cost reacts to changes in the level of activity.
26
Question
What is a "Cost object"?
Page 2
Answer
Anything for which cost data are desired.
27
Question
Define "Cost structure".
Page 2
Answer
The relative proportion of fixed, variable, and mixed costs in an organization.
28
Question
What is a "Differential cost"?
Page 2
Answer
A future cost that differs between any two alternatives.
29
Question
Define "Differential revenue".
Page 2
Answer
Future revenue that differs between any two alternatives.
30
Question
What is a "Direct cost"?
Page 2
Answer
A cost easily traced to a specified cost object.