Chapter 1: Introduction to Managerial Accounting

Vocabulary flashcards covering key definitions, principles, and concepts from Chapter 1 of Managerial Accounting, 7th Edition.

Management Accounting

A discipline involving partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control.

Planning

One of managers' three primary responsibilities, defined as setting goals and objectives and determining how to achieve them.

Directing

One of managers' three primary responsibilities, defined as overseeing the company's day-to-day operations.

Controlling

One of managers' three primary responsibilities, defined as evaluating the results of business operations and making adjustments as needed.

Financial Accounting

Accounting focused on providing historical financial statements based on GAAP to external users, such as creditors, stockholders, and government regulators.

Institute of Management Accountants (IMA)

The professional association for management accountants in the United States that issues the Certified Management Accountant (CMA) certification.

Certified Management Accountant (CMA)

A professional designation requiring a baccalaureate degree, two years of work experience, continuing professional education, and passing a two-part exam covering Financial Reporting, Planning, Performance and Analytics, and Strategic Financial Management.

IMA Ethical Standards

The four ethical standards that management accountants must comply with: Competence, Confidentiality, Integrity, and Credibility.

Enterprise Resource Planning (ERP)

Software systems used by large companies to integrate all of a company's worldwide functions, departments, and data, such as SAP and Oracle.

Knowledge Economy

An economy characterized by having more people employed in the service sector than in retail merchandising, manufacturing, construction, mining, and agriculture combined.

Sustainability

The ability to meet the needs of the present without compromising the ability of future generations to meet their own needs, based on social, environmental, and economic pillars.

Triple Bottom Line

A concept recognizing that a company's performance should be evaluated in terms of three factors: people, planet, and profit.

Sarbanes-Oxley Act of 2002 (SOX)

U.S. legislation enacted in response to corporate scandals (such as Enron and WorldCom) to restore trust in publicly traded corporations, management, financial statements, and auditors.

Data Analytics Process

A six-step process for making decisions that includes defining the business issue, identifying required data, choosing tools and technology, conducting analysis and insights, communicating results, and follow-through.

Absolute Cell Reference

An Excel cell reference that uses dollar signs ($) in front of the column letter and/or row number to keep a referenced cell constant when copying a formula.

Fill Handle

The small square in the lower right corner of an active Excel cell used to copy formulas or data across adjacent rows or columns.