 Managerial accounting - is concerned with providing information for the use of people inside the

organization, whereas financial accounting is concerned with providing information for the use of
people outside the organization.
 Planning- consists of identifying alternatives, selecting from among the alternatives the one that
is best for the organization, and specifying what actions will be taken to implement the chosen
alternative.
 Directing and Motivating - managers oversee day-to-day activities and keep the
organization functioning smoothly.
 Feedback - The accounting and other reports coming to management that are used in controlling
the organization are called
 Decentralization - the delegation of decision-making authority throughout an organization by
allowing managers at various operating levels to make key decisions relating to their area of
responsibility is called
 Line - A position on the organization chart that is directly related to achieving the basic objectives
of an organization is called
 Staff - provides service or assistance to other parts of the organization and does not directly
achieve the basic objectives of the organization.
 Controller - The manager in charge of the accounting department is generally known as
 Budgets - The plans of management formally expressed.
 Performance Report - A detailed report to management comparing budgeted data to actual data
for a specific time period
 Chief Financial Officer - the member of the top management team who is responsible for
providing timely and relevant data to support planning and control activities and for preparing
financial statements for external users.
 Work in Process - Inventory consisting of units of product that are only partially complete at the
end of a period is known as
 Six Sigma - a method that relies on customer feedback and objective data gathering and
analysis techniques to drive process improvement.
 Business Process - a series of steps that are followed to carry out some task in a business.
 Corporate Governance - The system by which a company is directed and controlled is called
 Enterprise Risk Management - The process used by a company to help identify the risks that it
faces and to develop responses to those risks so that the company is reasonably assured of
meeting its goals is known as
 Just-In-Time - A production and inventory control system in which materials are purchased and
units are produced only as needed to meet actual customer demand is known as
 Business Risks - Poorly designed products that cause health problems for customers and
financial statements that overstate the amount of revenue generated by the organization
 Non Value Added Activity - Increasing the output of something unlikely to generate more profit
 Value Chain - consists of business functions that add value to a company's products and
services, such as research and development, product design, manufacturing, marketing,
distribution, and customer service.
 Enterprise System - integrates data from across an organization into a single centralized
database that enables all employees to access a common set of data.
 Code of Professional Ethics - contains details of how its members should conduct themselves
in their dealings with the public.
 Lean Thinking Model - a five-step management approach that organizes resources around the
flow of business processes and that pulls units through those processes in response to customer
orders.
 Customer Value Proposition - A company can succeed only if it creates a reason for customers
to choose it over a competitor
 Sarbanes-Oxley Act of 2002- represents an important reform of corporate governance practices
and among other things requires the CEO and CFO to certify in writing that financial statements
fairly represent the results of operations.
  Corporate Social Responsibility - organizations considering the needs of all stakeholders when
making decisions

MS QUIZZES
1. A common argument against corporate involvement in socially responsible behavior is that *
It encourage government intrusion in decision making
As a legal person, a corporation is accountable for its conduct
It creates goodwill
In a competitive market, such behavior incurs costs that place the company at a disadvantage
2. A visual diagram of a firm's organizational structure that depicts formal lines of reporting,
communication, and responsibilities, between managers *
Performance report
Budget
Cycle diagram
Organizational Chart
3. A member of the op management team who is responsible for providing timely and relevant
data to support planning and control activities and for preparing financial statements for external
users.
Chief Financial Officer
Controller
Management Accountant
Treasurer
4. An activity that consumes resources or takes time but does not add value for which
customers are willing to pay *
Constraint
Non-value added activity
Non-constraint
Value-added activity
5. A detailed report to management comparing budget data to actual data for a specific time
period is called a *
Budget
Planning Report
Performance report
Controller's report
6. Sam is a financial manager who has discovered that her company is violating environmental
regulations. If her immediate superior is involved, her appropriate action is to *
Do nothing since she has a duty of loyalty to the organization
Consult the audit committee
Present the matter to the next higher managerial level
Confront her immediate superior
 7. The code of ethics for Management Accountants requires a financial manager/management
accountant to follow the established policies of the organization when faced with an ethical
conflict. If these policies do not resolve the conflict, the financial manager /management
accountant should *
0/1
Consult the board of directors immediately
Discuss the problem with the immediate superior if (s)he is involved in the conflict
Communicate the problem to the authorities outside the organization
Contact the next higher managerial level if initial presentation to the immediate superior does
not resolve the conflict
8. If a financial manager/accountant discovers unethical conduct in his/higher organization, and
fails to act, (s)he will be in violation of which ethical standard(s)? *
"Actively or passively subvert the attainment of the organization's legitimate and ethical
objectives"
"Communicate unfavorable as well as favorable information"
"Condone the commission of such acts by others within their organization"
All of the answers are correct

9. This consists of identifying alternatives, selecting from among the alternatives the one that is
best for the organization and specifying what actions will be taken to implement the chosen
alternative *
Controlling
Planning
Directing
Motivating

10. A _______ provides service or assistance to other parts of the organization and does not
directly achieve the basic objectives of the organization. *
a line position
a staff position
chief financial officer
controller

11. Corporate social responsibility *

Effectively enforced through the controls envisioned by the classical economics
Defined as the obligation to shareholders to earn a profit
More than obligation to shareholders to earn profit
Defined as the obligation to service long-term, organizational interest
12. The phase of accounting concerned with providing information to managers for use in
planning and controlling operations and in decision making. *
Financial accounting
Managerial accounting
Cost accounting
Corporate accounting
13. The manager in charge of the accounting department in an organization *
Chief Financial Controller
Treasurer
Controller
Vice-President - Finance

14. A position on the organization chart that is directly related to achieving the basic objectives
of an organization is called *
a line position
a staff position
chief financial officer
controller

15. Managerial Accounting places less emphasis on _____ and more emphasis on _____ than
financial accounting. *
Planning; Non-monetary data
Budgets; Estimated data
Precision; Non-monetary data
Estimates; Actual data
16.If a financial manager/management accountant has a problem in identifying unethical
behavior or resolving an ethical conflict, the first action (s)he should normally take is to *
Consult the board of directors
Discuss the problem with his/her immediate superior
Notify appropriate law enforcement agency
Resign from the company
17.Accounting and other reports that help managers monitor performance and focus on
problems and/or opportunities that might otherwise go unnoticed. *
Feedback report
Performance report
Budget
Financial accounting
18. The delegation of decision-making authority throughout an organization by allowing
managers at various operation levels to make key decisions relating to their area of
responsibility is called
Planning
Directing
Control
Decentralization
19. The delegation of decision-making authority throughout an organization by providing
managers at various operating levels with authority to make key decisions relating to their are of
responsibility *
Decentralization
Assignment
Monitoring
Control
19. The accounting and other reports coming to management that are used in controlling the
organization are called *
Feedback
Performance report
Budget
Financial Accounting