accounting final exam (chapters M10 and M11)

studied byStudied by 0 people
0.0(0)
learn
LearnA personalized and smart learning plan
exam
Practice TestTake a test on your terms and definitions
spaced repetition
Spaced RepetitionScientifically backed study method
heart puzzle
Matching GameHow quick can you match all your cards?
flashcards
FlashcardsStudy terms and definitions

1 / 33

encourage image

There's no tags or description

Looks like no one added any tags here yet for you.

34 Terms

1

capital asset

operational asset used for a long period of time

New cards
2

capital investment

acquisition of capital asset

New cards
3

capital budgeting

the process of planning to invest in long term assets in a way that returns the most profit

New cards
4

payback

measures the amount of time it takes to recover the cost of intital investment in terms of net cash inflows

New cards
5

equal cash flows formula

initial investment/amt of annual cash inflows

New cards
6

advantages of payback

  • easy

  • good for short term investments

New cards
7

disadvantages for payback

  • doesnt consider time value of money

  • doesnt consider income after break even

New cards
8

Accounting rate of return (ARR)

a capital investment analysis method that measures the overall profitability of the investment

New cards
9

advantages of ARR

considers overall profitability

New cards
10

disadvantages of ARR

  • uses accrual accounting

  • doesnt consider time value of money

New cards
11

decision rate

does the return meet expecations

New cards
12

net present value (NPV)

a capital investment analysis method that measures the net difference between the present value of investments net cash inflows and investment cost

New cards
13

discount rate

managements minimum desired rate of return on investment

New cards
14

if NPV is 0 or above…

accept

New cards
15

if NPV is below 0…

reject

New cards
16

profitability index (PI)

computes the number of dollar returned for each dollar invested

New cards
17

if PI index is one or greater…

accept (NPV is positive)

New cards
18

if PI index is less than one…

reject (NPV is negative)

New cards
19

centralized company

major planning and control decisions made by top managers

New cards
20

decentralized company

a company is divided into segments, each segment manager makes planning and control decisions

New cards
21

cost center

manager in a cost center is only responsible for costs (evaluate based on if they acheive standards)

New cards
22

revenue center

manager is evaluated by generating revenue

New cards
23

profit center

manager is in charge of managing both costs and generating revenue

New cards
24

investment center

manager is responsible got profit and capital decision

New cards
25

performance evaluation system

provides top managment with a framework for maintaining control over entire system

New cards
26

lag indicators are based on…

past performace

New cards
27

lead indicators are based on…

projections of the future

New cards
28

operational performance measure

non-financial performance measures to evaluate efficiency and effectiveness of the company

  • customer satisfaction

  • employee satisfaction and retention

New cards
29

balanced score card

performance evaluation system that requires management to consider both financial and operational performance

New cards
30

Different perspectives: financial

how do we look to investors and creditors (increase profit, productivity and growth)

New cards
31

different perspectives: customer

improve value to customer (price, quality, service)

New cards
32

different perspective: internal business

problems with the product (defects), new products to market, number of products sold

New cards
33

different perspectives: learning and growing

returning skilled employees, positive culture, training for employees, employee satisfaction

New cards
34

transfer pricing

amount of goods when the transaction happens between different segments of the company

New cards

Explore top notes

note Note
studied byStudied by 18 people
899 days ago
5.0(1)
note Note
studied byStudied by 32 people
794 days ago
5.0(1)
note Note
studied byStudied by 1 person
28 days ago
5.0(1)
note Note
studied byStudied by 103 people
856 days ago
5.0(1)
note Note
studied byStudied by 3 people
761 days ago
5.0(1)
note Note
studied byStudied by 10 people
693 days ago
4.5(2)
note Note
studied byStudied by 39 people
953 days ago
5.0(1)
note Note
studied byStudied by 11 people
776 days ago
5.0(1)

Explore top flashcards

flashcards Flashcard (33)
studied byStudied by 3 people
792 days ago
5.0(1)
flashcards Flashcard (62)
studied byStudied by 5 people
765 days ago
5.0(1)
flashcards Flashcard (82)
studied byStudied by 10 people
56 days ago
5.0(1)
flashcards Flashcard (40)
studied byStudied by 5 people
171 days ago
5.0(1)
flashcards Flashcard (20)
studied byStudied by 115 people
507 days ago
5.0(1)
flashcards Flashcard (25)
studied byStudied by 12 people
468 days ago
5.0(1)
flashcards Flashcard (25)
studied byStudied by 2 people
661 days ago
5.0(1)
flashcards Flashcard (38)
studied byStudied by 38 people
8 days ago
5.0(1)
robot