Cost Accounting Week 1

What is the Sarbanes-Oxley Act of 2002?

A U.S. law created to protect investors and improve the accuracy of corporate financial reporting by requiring companies to have stronger internal controls and accountability.

Data visualization is:

how the results of the data analysis are summarized and presented

True/False: Cost accounting information is governed by generally accepted accounting principles (GAAP) in the United States and the international financial reporting standards (IFRS) in many other countries.

False

True/false: reworking defective units is a nonvalue-added activity

True

Which of the following is an information technology that links the various processes of an enterprise into a single comprehensive system?

Enterprise resource planning

The systematic evaluation of information to address a decision problem is

data analytics

Assume that you are a cost accountant who is a member of Institute of Management Accountants (IMA). If you are faced with an ethical conflical what should you do?

Follow established policies that deal with them, if policies do not resolve conflict, discuss with superiors

Which of the following describes the set of activities that transforms raw resources into the goods and services end users (households for example) purchase and consume and also includes the treatment or disposal of any waste generated by the end users.

value chain

big data

The volume and speed with which information is generated and made available

budget

Financial plan of the revenues and resources needed to carry out activities and meet financial goals

cost accounting

Field of accounting that measures, records, and reports information about costs.

cost-benefit analysis

Process of comparing benefits (often measured in savings or increased profits) with costs associated with a proposed change within an organization.

cost drivers

Factors that cause, or “drive,” costs.

critical thinking

A systematic process used to analyze a business issue or decision

data analytics

Systematic evaluation of information to address a decision problem

data visualization

How the results of the data analysis are summarized and presented.

differential costs

With two or more alternatives, costs that differ among or between alternatives.

differential revenues

Revenues that change in response to a particular course of action

distribution chain

Set of firms and individuals that buys and distributes goods and services from the firm.

enterprise resource planning (ERP)

Information technology that links the various systems of the enterprise into a single comprehensive information system.

financial accounting

Field of accounting that reports financial position and income according to accounting rules.

generally accepted accounting principles (GAAP)

Rules, standards, and conventions that guide the preparation of financial accounting statements for firms registered in the United States

international financial reporting standards (IFRS)

Rules, standards, and conventions that guide the preparation of the financial accounting statements in many other countries.

nonvalue-added activities

Activities that do not add value to the good or service.

responsibility center

Specific unit of an organization assigned to a manager who is held accountable for its operations and resources.

supply chain

Set of firms and individuals that sells goods and services to the firm.

value-added activities

Those activities that customers perceive as adding utility to the goods or services they purchase.

value chain

Set of activities that transforms raw resources into the goods and services that end users purchase and consume.

How can cost information add value to the organization?

Depends on whether the information improves managers decisions, is also provided in a timely manner

Name an important role of a cost accountant

evaluate decisions made for one stage of the value chain and the effects of the decisions on other stages.

Investors, potential investors, creditors, government agencies, and tax authorities, are

outside the organization.

True/false: Cost accounting information is commonly used in developing financing accounting information

true

The job of managers

is varied and ambiguous. but includes decision making.

True false: activities cause costs

true

Reducing costs gives

cost advantage over competitors

second role of he accounting system besides aiding managerial decision making.

Provide information about the performance indirectly of the organization and the manger.

True/False “One size fits all” applies to cost accounting

False

Different decisions require

different cost data

Artificial Intelligence is

are of computer science concerned with the development of machines that can replicate many jobs that would otherwise require human analysis and intervention.

The design of cost systems is

about the assignment of costs to various activities, products, projects, corporate units, and people.

How the design of cost systems is done affects

prices, reimbursement and pay.

IMA code of ethics steps are

Discuss, clarify, consult