Podcast
Questions and Answers
What distinguishes managerial accounting from financial accounting?
Which type of costs are easily traced to a unit of product or cost object?
What is the primary audience for managerial accounting information?
What do non-manufacturing costs include?
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How does the level of detail in managerial accounting information compare to that in financial accounting?
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What do product costs include?
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What is a key difference in the organization of information between managerial accounting and financial accounting?
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When do product costs attach to a unit of product?
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Which type of accounting addresses the needs of external stakeholders such as investors and creditors?
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What are manufacturing costs comprised of?
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What is the primary focus of the information provided by managerial accounting?
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What happens to direct materials costs in manufacturing companies when used in production?
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What are period costs?
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Which costs have two options to show up in the income statement and balance sheet?
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What are committed fixed costs?
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What are relevant costs and irrelevant costs based on?
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What are sunk costs and how should they be treated in decision-making?
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For what purposes is the traditional format for income statements used?
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What does the contribution margin represent?
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What does the degree of operating leverage (DOL) measure?
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What does the cost-volume-profit analysis help determine?
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What does the contribution income statement help managers assess?
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What does the degree of operating leverage (DOL) measure?
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What is the formula for determining break-even quantity based on?
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What is a requirement to become a Certified Management Accountant (CMA)?
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What distinguishes managerial accounting from financial accounting in terms of reporting?
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What is a requirement for obtaining the Chartered Global Management Accountant (CGMA) designation?
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What does the CMA exam content specifications cover?
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What do employers expect accounting majors to have?
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What is the primary focus of managerial accounting courses?
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What is the primary focus of financial accounting?
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What is a requirement to become a Certified Management Accountant (CMA)?
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What does the Chartered Global Management Accountant (CGMA) designation require?
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What does managerial accounting primarily focus on?
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What is a key difference between financial accounting and managerial accounting?
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What does the Institute of Management Accountants (IMA) estimate about professional accountants in the U.S.?
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Study Notes
Financial and Managerial Accounting: Key Differences and Professional Opportunities
- Financial accounting is focused on external persons making financial decisions, with a historical perspective and emphasis on objectivity and verifiability.
- Managerial accounting is concerned with managers planning for and controlling an organization, with a future emphasis and focus on relevance, precision, and timeliness.
- Financial accounting has a primary focus on companywide reports, must follow GAAP/IFRS and prescribed formats, and is mandatory for external reports.
- Managerial accounting focuses on segment reports, is not bound by GAAP/IFRS or any prescribed format, and is not mandatory.
- Managerial accounting involves planning, controlling, and decision-making activities, such as establishing goals, developing budgets, and making selections among competing alternatives.
- Different majors, such as marketing, supply chain management, and human resource management, have specific planning, controlling, and decision-making considerations within managerial accounting.
- The Institute of Management Accountants (IMA) estimates that over 80% of professional accountants in the U.S. work in non-public accounting environments.
- Employers expect accounting majors to have strong financial accounting skills, as well as the planning, controlling, and decision-making skills foundational to managerial accounting.
- To become a Certified Management Accountant (CMA), membership in the Institute of Management Accountants, a bachelor's degree, two years of relevant professional experience, and passage of the CMA exam are required.
- The CMA exam content specifications cover topics such as financial reporting, planning, performance, and control, as well as financial decision-making, risk management, and professional ethics.
- The Chartered Global Management Accountant (CGMA) designation, co-sponsored by the AICPA and CIMA, requires a bachelor's degree in accounting, passage of the CPA exam, membership in the AICPA, three years of relevant management accounting work experience, and passage of the CGMA exam.
- Managerial accounting courses aim to teach measurement skills that managers use to support planning, controlling, and decision-making activities, and focus on cost concepts.
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Description
Test your knowledge of cost-volume-profit analysis and financial vs. managerial accounting with this quiz. Check your understanding of CVP applications, assumptions, and calculations, as well as the key differences between financial and managerial accounting, professional opportunities, and certifications in the field.