Horngren-s Managerial Accounting Chapter 1 Exam Questions with Complete Solutions.

Horngren's Managerial Accounting Chapter 1 Exam Questions with Complete Solutions Accounting - Correct Answers: The information system that measures business activities, processes the information into reports, and communicates the results to decision makers. Financial Accounting - Correct Answers: Provides information for external decision makers, such as outside investors, lenders, customers, and the federal government. Managerial Accounting - Correct Answers: Focuses on information for internal decision makers, such as the company's managers and employees. Certified Public Accountants - Correct Answers: Licensed professional accountants who serve the general public. Chartered Global Management Accountant - Correct Answers: Accountants who have advanced knowledge in finance, operations, strategy, and management. Certified Management Accountant - Correct Answers: Certified professionals who specialize in accounting and financial management knowledge. Certified Financial Planner - Correct Answers: Work with individuals to help them budget, plan for retirement, save for education, and manage their finances. Financial Accounting Standards Board - Correct Answers: A privately funded organization; oversees the creation and governance of accounting standards. Securities and Exchange Commission - Correct Answers: The U.S. governmental agency that oversees the U.S. financial markets. Generally Accepted Accounting Principles - Correct Answers: The main U.S. accounting rule book and is currently created and governed by the FASB. Faithful Representation - Correct Answers: Information that is complete, neutral, and free from material error. Cost Principle - Correct Answers: States that acquired assets and services should be recorded at their actual cost (also called historical cost). International Financial Reporting Standards - Correct Answers: A set of global accounting standards that are used by more than 166 nations/jurisdictions. Audit - Correct Answers: An examination of a company's financial statements and records. Sarbanes-Oxley Act (SOX) - Correct Answers: Requires management to review internal control and take responsibility for the accuracy and completeness of their financial reports. Makes it a criminal offense to falsify financial statements. Accounting Equation - Correct Answers: Assets = Liabilities + Owner's Equity Asset - Correct Answers: An economic resource that is expected to benefit the business in the future. Liabilities - Correct Answers: Debts that are owed to creditors. Equity - Correct Answers: Represents the amount of assets that are left over after the company has paid its liabilities. Balance Sheet - Correct Answers: Lists a business entity's assets, liabilities, and stockholders' equity as of a specific date, usually the end of a month, quarter, or year. Organizational Chart - Correct Answers: Helps show the relationship between departments and divisions and the managers who are responsible for each section. Board of Directors - Correct Answers: Elected by the stockholders, the owners of Smart Touch Learning, and is responsible for developing the strategic goals of the corporation. The board also selects the president—chief executive officer. CEO - Correct Answers: Responsible for developing a plan to meet the company's short- and long-term strategies as well as overseeing the implementation of the plans. Line Positions - Correct Answers: Directly involved in providing goods or services to customers. Staff Positions - Correct Answers: Help support the line positions. Strategic Planning - Correct Answers: Involves developing long-term strategies to achieve a company's goals. Spans 3-10 years. Operational Planning - Correct Answers: Focuses on short-term actions dealing with a company's day-to-day operations. Directing - Correct Answers: Involves running the day-to-day operations of a business. Controlling - Correct Answers: The process of monitoring day-to-day operations and keeping the company on track. Service Companies - Correct Answers: Sell their time, skills, and knowledge. Merchandising Companies - Correct Answers: Resell products they buy from suppliers. Manufacturing Companies - Correct Answers: Use labor, equipment, supplies, and facilities to convert raw materials into finished products. Raw Materials Inventory - Correct Answers: Includes materials used to make a product. Work-In-Process Inventory - Correct Answers: Includes goods that are in the manufacturing process but are not yet complete. Finished Goods Inventory - Correct Answers: Includes completed goods that have not yet been sold. Direct Cost - Correct Answers: A cost that can be easily and cost-effectively traced to a cost object. Cost Object - Correct Answers: Anything for which managers want a separate measurement of cost and may be a product, department, sales territory, or activity. Indirect Costs - Correct Answers: Costs that cannot be easily or cost-effectively traced directly to a cost object. Direct Materials - Correct Answers: The cost of raw materials that are converted into the finished product and are easily traced to the product. Direct Labor - Correct Answers: The cost of wages and salaries of employees who convert the raw materials into the finished product. Manufacturing Overhead - Correct Answers: Refers to indirect manufacturing costs that cannot be easily traced to specific products. Indirect Materials - Correct Answers: The cost of raw materials that are difficult or not cost-effective to trace directly to the product. Indirect Labor - Correct Answers: Includes the cost of wages and salaries in the factory for persons not directly producing the product. Prime Costs - Correct Answers: Combine the direct costs: direct materials and direct labor. Conversion Costs - Correct Answers: Combine direct labor with manufacturing overhead. Product Costs - Correct Answers: Include the costs of purchasing or making a product. Period Costs - Correct Answers: Selling and administrative expenses and other expenses such as taxes and interest. Cost of Goods Manufactured - Correct Answers: The cost of manufacturing the finished goods. Just-in-Time ( JIT) Management - Correct Answers: A cost management system in which a company produces products just in time to satisfy needs. Suppliers deliver materials just in time to begin production, and finished units are completed just in time for delivery to the customer. Total Quality Management (TQM) - Correct Answers: A philosophy of continuous improvement of products and processes. Continuous improvement leads to fewer defects and higher customer satisfaction. Value Chain - Correct Answers: Includes both upstream and downstream activities in which a business engages. The Triple Bottom Line - Correct Answers: Profits, people, and the planet—the economic, social, and environmental impact of doing business.