CH 3 Management Accounting Key Terms

Flashcards covering key vocabulary concepts in management accounting.

Activity type

Defines the activity or work performed by a cost center.

Allocation structure

Identifies the type and source of costs to be included and the method of settlement.

Assessment

A periodic allocation technique used to assign multiple costs to a receiver.

Assignments

Identifies the types of costs or revenues to be accumulated and settled.

Controlling area

Key organization level in management accounting.

Controlling object

An object in management accounting that can receive and accumulate costs.

Cost center

Responsible for cost containment; also known as responsibility centers.

Cost center accounting

Tracks costs by the organizational unit responsible for them.

Cost center groups

Groups cost centers with similar characteristics for better structure.

Cost element

Master data in management accounting for transferring costs between accounting types.

Cost element groups

Consolidates multiple cost elements in management accounting.

Distribution

A technique for periodic allocation of primary costs.

Distribution rule

Specifies a receiver, amount, and timing of periodic allocation.

Internal activity allocation

No initial accumulation of costs occurs.

Internal order

Represents temporary events and serves as initial cost collectors.

Internal order accounting

Manages temporary costs associated with activities of finite life.

Internal order type

Defined for each purpose with different parameters.

Management accounting

Tracks costs and revenues for internal purposes.

Overhead management

Processes to track and allocate indirect costs.

Periodic allocation

Accumulated costs over a period allocated at the end to other objects.

Settlement

Technique used to transfer costs from internal orders to other objects.

Statistical key figure

A value used as the basis for allocating costs.

Primary cost elements

are associated with general ledger accounts and are used to transfer data between financial accounting and management accounting.

Product costing

concerned with accurately tracking the costs of creating a product or service and calculating the cost of goods manufactured.

Profitability analysis

takes into consideration costs and revenues to evaluate the profitability of different parts of the organization.

Secondary cost elements

are not associated with general ledger accounts and are used to transfer data within management accounting

Settlement profile

defines numerous settlement parameters, including the ones we have discussed, that are then assigned to an internal order.

Source Structures

which identify the source of costs to be settled; The second category of settlement parameter

Management accounting object

is an object in management accounting that can receive and accumulate costs and, in some cases, allocate costs to other objects.