Chapter 1

Question 1

What are the 6 differences b/w financial accounting and managerial accounting? Financial Accounting…

Answer 1

1. fs. for external users, quarterly,annual reports, general purpose, pertainsto business as a whole, highly aggregated, limited to double entry and cost, GAAP

Question 2

What are the 6 differences b/w financial accounting and managerial accounting? Managerial Accounting…

Answer 2

1. internal reprots, often as needed, specificpurpose, pertains to subuntis of the business, very detailed, any relevant data, stand is relvant to decsiions

Question 3

What are management’s functions?

Answer 3

1. Planning, 2. Directing, 3. Controlling

Question 4

Explain Planning

Answer 4

look ahead to establish objectives

Question 5

Explain DIrecting

Answer 5

Coordinating a copmany’s diverse activities and human resources, implementing planned objectives and providign necessary incentives to motivate employees

Question 6

Explain Controlling

Answer 6

the process of keeping the company’s activities on track

determine whether planned goals are being met, what changes are needed to get back on track

Question 7

How do managers achieve control in a small company

Answer 7

observe, ask questions, and know how to evaluate the answers

Question 8

How do managers achieve control in a large copany

Answer 8

use formal systems (budgets, responsiblitiy centres, performance evaluation reports)

Question 9

What are shareolders

Answer 9

owners, manager the company indirectly thourght the BOD which they elect

Question 10

What is the Board of Directors

Answer 10

create operating policies, select officers such as president and vice president

Question 11

what is the CEO

Answer 11

over all responsiblitiy for managing the business, delegates responsiblities to the other officers

Question 12

What are line postions

Answer 12

-directly involved with company’s main revenue generating activities, vice pres of opearations, president of marketing, plant managers and supervisors, production personel

Question 13

What are staff positions

Answer 13

support lien employees, finance, legal, human resources

Question 14

What is the CFO

Answer 14

Responsible for all accoutning and finance, supported by the controller and the reasurer

Question 15

what is the controller

Answer 15

1. maintains accoutning reocrds, 2. maintains adequate system of internal controls, 3. perparing f.s., tax returns and itnernal reports

Question 16

What does the Treasurer do

Answer 16

has custody of the corporations’ funds an dis responsible for maintining the ocmpany’s cash position

Question 17

what does the internal audit staff do

Answer 17

• also serve the CFO, reviwing teh reliabiltiy and integrityof finacial informaiton provided by the controller and treasurer, make sure internal control systems are funciton properly to safeguard corproate assets

Question 18

what is the VP of operations

Answer 18

oversees employees with line positions ex company might have multiple plant managers and each one would reprot to vp of operations

Question 19

What are the IMA’s statement of ethical professional practice?

Answer 19

1. competence, confidentiality, integrity, creditability

Question 20

what does it mean by competence

Answer 20

1. maintain professioanl competence, 2. perform professional duties in accordanc with relevant laws, regulationsa dn technical standards, 3. prepare complete and clear reports and recommendations, 4. communicate professional limitations that would preclude responsible judgement or successful performance of an activity

Question 21

What does it mean by confidentiality?

Answer 21

• refrain from disclosing confidential info, inform suboridantes as how to handle confidental informaiton, refrain from using ocnfiential info for unethical or illegal advantage

Question 22

What does it mean by integrity?

Answer 22

avoid conflicts of interest, refrain from activity that would prejudice tehir ability to carry out their duties ethically, refrain from engaging in or supporting any activity that would discredit the accouting profession

Question 23

what does it mean by creditability- objectivity?

Answer 23

communciate informaiton fairly and objectiviely, disclsoe fully all relevant informaiton that oculd reasonably be expected to influence a suer’s understanding of the reports, comments and recommendations presented

Question 24

What is the value chain

Answer 24

all activities assocaited with provdiign a product or service

Question 25

Explain a value chain for a manufacutring company

Answer 25

1. research and development 2. Product design 3. acquisition of raw materials 4. Production 5. sales and marketing 6. delivery 7. customer relations 8. subsequent service

Question 26

What is ERP

Answer 26

Enterprise Resource Planning Software Systems

Question 27

Explain ERP

Answer 27

1. used to help manage the value chain 2. provides comprehensive, centralized and integrated sources of information 3. used to manage all major business processes (from purchasing, to manufacutring to Human resources)

Question 28

What does CIM Stand for?

Answer 28

Computer Integrated Manufacturing

Question 29

Explain CIM

Answer 29

1. untouched by human hands | 2. automation significantly reduces direct labour costs in many cases

Question 30

What does B2B stand for

Answer 30

Business to Business e-commerce

Question 31

Describe B2B

Answer 31

1. cuts out the middle man by purchasing online from an online supplier 2. effects the value chain

Question 32

What is Just in time or JIT

Answer 32

Just in time Inventory Methods

Question 33

Define JIT

Answer 33

good are manufacutred or purchased just in time for use - reduces inventories, this can be huge advantage in an industry where products become obsolete overnight - also called lean production

Question 34

Descirbe Quality with JIT

Answer 34

JIT Inventory system also requires an increased emphasis on product quality - many companies have installed TQM (total quality management) Systems

Question 35

What is Total Quality Management Systems

Answer 35

- to reduce defects in finished products - goal to achieve zero defects - need timly data on defective products, rework costs, costs of honoring warranties, - usually teh info acquired helps to design the product or to reduce setup tiem and decrease error - also provides informaiton on non-finanical measures (customer satisfaction, nubmer of service calls etc)

Question 36

Define ABC

Answer 36

overhead is allocated based on each product's use of economic resoruces as it undergoes various activities - beneficial becasue it results in more accurate prodcut costing and more scrutiny in all activities involved in the value chain

Question 37

What is Theory of COnstraints?

Answer 37

- used to identify and manage constraints in order to achieve company goals - all comapnies' ahve certain aspects of their busienss that create "bottlenecks"

Question 38

What is lean manufacturing

Answer 38

manage operations more affectively and with more control | - Goal is to eliminate waste and concentrate more on customer's needs

Question 39

what are the 5 basic principles to the lean thinking process

Answer 39

1. Value, 2. Value Stream, 3. Make the value stream flow, 4. Implement a pull system, 5. strive for perfection

Question 40

Describe Value in the lean thinking process

Answer 40

1. process of target costing, 2. acceptable price a customer is willing to pay for a specific product 3. Key: to achieve optimal price for customers while realizing the greatest profit potential

Question 41

Describe the value stream in the lean thinking process

Answer 41

1. the entire flow of a prodcut's life thorugh each stage of prodution - evaluate what is value added and what is waste

Question 42

Descirbe "make the value stream flow" in the lean thinking process

Answer 42

- need ofr the produciton process to have a continuous flow | - any disruption in the flow can have determental effects on the functioning of a company and on customer satisfaction

Question 43

Describe "implement a pull system" in the lean thinking process

Answer 43

prodcut should not be made until the customer orders it | - prodcution capacity is flexible and each stage of the value chain is well designed and defined

Question 44

describe "strive for perfection" in the lean thinking process

Answer 44

deals with the target qualitythat managemetn is seeking to meet

Question 45

What changes need to be made when compaines change from traditonal mass prodcution to lean thinking

Answer 45

requires change in the way companies 1. control 2. measure 3. accoutn for their process

Question 46

What is the Balance Scorecard

Answer 46

uses fianical and non-finaical measures to measure and evaluate all aspets of the company'sperations ie. in order to increase return on assets the comapny must increase their sales