Managerial Accounting and Financial Statement Analysis Flashcards

Vocabulary practice flashcards covering fundamental definitions, managerial functions, ethical standards, financial statements, and financial analysis methods based on Modules 1 through 6.

Managerial Accounting

The process of analyzing, interpreting, and presenting financial statements using the statements prepared under financial accounting.

Financial Accounting

Accounting related to the recording of business transactions immediately after the transaction has taken place.

Cost Accounting

Accounting concerned with the ascertainment of various elements of costs for different business operations and activities.

Revaluation Accounting

A type of accounting that ensures capital is maintained intact in real terms.

Inventory Control

Exercising control over the utilization of raw materials.

Interim Reporting

Supplying accounting information to top management.

External Reporting

Supplying accounting information to outsiders like shareholders, banks, and financial institutions.

Internal Audit

An audit conducted by the business organization with the help of a paid employee who has thorough accounting knowledge.

Planning (Management Function)

Setting immediate and long-range goals, predicting future conditions, considering strategies, and deciding which strategies to use.

Directing and Motivating

Overseeing day-to-day activities, ensuring the organization functions smoothly, and mobilizing members to carry out plans.

Controlling (Management Function)

Checking performance against planned standards and deciding what corrective actions to take if deviations occur.

Cost Accounting System

A system that accumulates data about the cost of producing goods and services for both management accounting and financial accounting.

Management Accounting Information System (MAIS)

A set of highly technological systems and procedures that gather information from a wide range of sources, compiling and converting it into a readable format for decision-makers.

Internal Users of Accounting Information

People inside the business organization who use accounting information, including owners, accountants, managers, and auditors.

External Users of Accounting Information

People outside the business organization who use accounting information, including potential investors, government, creditors, and research scholars.

Standards of Ethical Conduct for Management Accountants

The four ethical standards governing management accountants: Competence, Confidentiality, Integrity, and Credibility.

Financial Statements

The most widely used and comprehensive way of communicating financial information about a business enterprise to users.

Income Statement

A financial report containing income and expense accounts that shows the results of business operations or performance.

Multiple Step Form

An income statement format commonly used by merchandising businesses.

Single Step Form

An income statement format commonly used by service concern businesses.

Statement of Comprehensive Income

A report summarizing a company's net assets over a period of time, highlighting adjustments on equity, and containing net income and other comprehensive income.

Statement of Financial Condition

Also called a balance sheet, it is a main financial statement that reports an entity's assets, liabilities, and owner's equity or capital.

Statement of Cash Flows

A report revealing cash inflows and outflows during a period, broken down into operating activities, investing activities, and financing activities.

Statement of Changes in Equity

A report documenting all equity changes during a period, including share issuances or purchases, dividends issued, and profits or losses.

Notes to Financial Statements

Component providing narrative explanations, important notes about figures, and details on amounts to enhance understanding of audited financial statements.

Financial Statement Analysis

Tools and techniques that enable analysts to examine past and current financial statements.

Vertical Analysis

A financial analysis technique (also called a common-sized income statement) where components of the income statement are divided by revenue and multiplied by 100 to express them as percentages.

Horizontal Analysis

A financial analysis technique comparing two-year reports to spotlight trends and establish relationships between items appearing on the same row over time.