Management And Cost Accounting Chapter 1 Summary Exam Questions And Answers 2024

Management And Cost Accounting Chapter 1 Summary Exam Questions And Answers 2024 definition of accounting formulated by the American Accounting Association - correct answer-the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information users of accounting information - correct answer-1. managers 2. shareholders 3. employees 4. creditors 5. government agencies information required by managers - correct answer-information that will assist them in their decision-making and control activities information required by shareholders - correct answer-information on the value of their investment and the income that is derived from their shareholding information required by employees - correct answer-information on the ability of the firm to meet wage demands and avoid redundancies information required by creditors - correct answer-information on a firm's ability to meet its financial obligations information required by government agencies - correct answer-- accounting information - information on the amount of profits that are subject to taxation - information important for determining policies to manage the economy 2 categories of users of accounting information - correct answer-1. internal users within the organization 2. external users such as shareholders, creditors, and regulatory agencies outside the organisation 2 branches of accounting - correct answer-1. management accounting 2. financial accounting differences between management accounting and financial accounting - correct answer-- legal requirements - focus on individual parts or segments of the business - generally accepted accounting principles - time dimension - report frequency and less emphasis on precision the decision-making, planning, and control process - correct answer-1. Identify objectives 2. Search for alternative courses of action 3. Select appropriate courses of action 4. Implement the decisions 5. Compare actual and planned outcomes 6. Respond to divergencies from plan 3 reasons to concentrate on the objective "firms seek to maximize future profits" - correct answer-1. It is unlikely that any other objective is as widely applicable in measuring the ability of the organization to survive in the future. 2. It is unlikely that maximizing future profits can be realized in practice, but by establishing the principles necessary to achieve this objective you will learn how to increase profits. 3. It enables shareholders as a group in the bargaining coalition to know how much the pursuit of other goals is costing them by indicating the amount of cash distributed among the members of the coalition. courses of action - correct answer-1. developing new products for sale in existing markets; 2. developing new products for new markets; 3. developing new markets for existing products.