Shared Flashcard Set

Details

NCMA Bk1-10
Book 1, Chapter 10
27
Accounting
Professional
07/29/2008

Additional Accounting Flashcards

 


 

Cards

Term

 

 

 

Profitability ratio

Definition

Describes the firm's profit in terms of a source of profit (for example sales or total assets)

 

- Profit Margin = net income / sales

- Gross Margin = gross income / sales

Term

 

 

 

Cash budget

Definition

 

Cash budget estimates reciept and expenditures of money on a daily or weekly basis to ensure that on organization has sufficient cash to meet its obligations.

Term

 

 

 

Revenue Budget

Definition

 

A revenue budget lists forecasted and actual revenues of the organization.

Term

 

 

Expense Budget

Definition

 

a budget that outlines the anticipated and actual expenses for a responsibility center.

Term

 

 

 

A responsibility center

Definition

 

organizational dept. or unit under the supervision of a single person who is responsible for its activity.

Term

 

 

steps to feedback control

Definition

 

1) establish standards of performance

2) measure actual performance

3) compare performance to standards

4) take corrective action

Term

 

 

 

Feedback Control

Definition

 

control that focuses on the organization's output;  also called postaction output control.

Term

 

 

Concurrent Control

Definition

 

control that consists of monitoring ongoing activities to ensure they are consistant with standards.

Term

 

 

Feedforward Control

Definition

 

Control that focuses on human, material, and financial resources flowing into the organization; also called preliminary or preventative controls.

Term

 

 

Capital Budget

Definition

 

A budget that plans & reports investments in major assets to be depreciated over seeral years.

Term

 

 

Top-down Budgeting

Definition

 

Process in which middle and lower level managers set dept. budget targets in accordance with overall company revenues and expenditures specified by top managment.

Term

 

 

 

Organizational Control

Definition

 

Is the systematic process of regulating organizational activities to make them consistant with the expectations established in plans, targets, and standards of performance.

Term

 

 

 

 Leverage Ratio

Definition

 

= Total debt

---------------

Total assets

Term

 

 

 

Activity Ratio

Definition

 

 Organizations internal performance with respect to key activities defined by management.

 

- Inventory turnover = total sales / avg inventory

- conversion ratio = purchase orders / customer inquiries

 

Term

 

Liquidity Ratio

Definition

 

A financial ratio that indicates the organization's ability to meet its current debt obligations

Term

 

Profitability Ratio

Definition

 

A financial ration that describes the firm's profit in terms of a source of profits

Term

 

Bureaucratic Control

Definition

 

Use of rules, policies, heirarchy of authority, reward systems, and other formal devices to influence employee behavior and assess performance.

Term

 

Decentralized Control

Definition

 

Use of organizational culture, group norms, and a focus on goals, rather than rules and procedures, to foster compliance woth organizational goals.

Term

 

Total Quality Management (TQM)

Definition

 

An organizationwide commitment to infusing quality into every activity through continuous improvement.

Term

 

Quality Circle

Definition

 

Group of 6-12 volunteer employees who meet regularly to discuss and solve problems affecting the quality of their work.

Term

 

Benchmarking

Definition

 

The continuous process of measuring products, services, and practices against major competitors or industry leaders.

Term

 

Balanced Scorecard

Definition

 

A comprehensive management control system that balances traditional financial measures with measures of customer services, internal business processes, and the organization's capacity for learning and growth.

Term

 

ISO 9000

Definition

 

A set of international standards for quality management, setting uniform guidelines for processes to ensure that products conform to customer requirements

Term

 

Economic Value-added (EVA) system

Definition

 

A control system that measures performance in terms of after-tax profits minus the cost of capital invested in tangible assets.

Term

 

Market Value-added (MVA) system

Definition

 

A contol system that measures the stock market's estimate of the value of a company's past and expected capital investment projects.

Term

 

Activity-based costing (ABC)

Definition

 

A contol system that identifies the various activities needed to provide a product and allocates costs accordingly.

Term

 

Cycle time

Definition

 

Time to complete a company's process.

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