MA 1 medio aperto

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Questions and Answers

Explain the difference between financial accounting and managerial accounting.

Financial accounting serves external parties like stockholders, creditors, and regulators, while managerial accounting provides information to internal managers for planning, control, and decision-making.

What are the purposes of cost classification?

Cost classification serves purposes like assigning costs to cost objects, accounting for costs in manufacturing, predicting cost behavior, and making decisions.

Describe the characteristics of direct costs.

Direct costs are easily traced to a unit of product or cost object, such as direct material and direct labor.

What are common costs and how are they related to cost objects?

Common costs are incurred to support multiple cost objects and cannot be directly associated with a single cost object. Signup and view all the answers

What is the difference between product costs and non-manufacturing costs?

Product costs include direct materials, direct labor, and manufacturing overhead and are relevant for evaluating cost of goods sold and inventory on financial statements. Signup and view all the answers

When are direct materials costs transferred from raw materials to work in process?

Direct materials costs are transferred from raw materials to work in process when used in production. Signup and view all the answers

Explain the difference between product costs and period costs in managerial accounting.

Product costs include direct labor, direct materials, and manufacturing overhead, and are assigned to units of product. Period costs include selling and administrative costs, and are assigned to the period when the cost is incurred. Signup and view all the answers

Define variable costs and fixed costs in managerial accounting.

Variable costs vary in direct proportion to changes in the level of activity, while fixed costs remain constant regardless of changes in activity. Signup and view all the answers

Distinguish between committed fixed costs and discretionary fixed costs.

Committed fixed costs are long-term and cannot be significantly reduced in the short term, while discretionary fixed costs may be altered in the short term by current managerial decisions. Signup and view all the answers

Explain the concept of opportunity cost in decision-making.

Opportunity cost is the potential benefit given up when one alternative is selected over another and should be explicitly considered in every decision. Signup and view all the answers

What are sunk costs, and how should they be treated in decision-making?

Sunk costs have already been incurred and cannot be changed now or in the future, and should be ignored when making decisions. Signup and view all the answers

Differentiate between the traditional format and contribution format for income statements.

The traditional format is used for external reporting purposes, while the contribution format is used primarily for managerial purposes. Signup and view all the answers

Explain the difference between managerial accounting and financial accounting.

Managerial accounting is focused on providing quantitative information to the internal audience, particularly management at all levels of the organization. It does not require detailed information but rather aggregate measures of the company. Financial accounting, on the other hand, is more focused on external reporting and follows specific accounting principles and formats. Signup and view all the answers

Explain the formula for determining break-even quantity and its significance in business operations.

The formula for determining break-even quantity is: $Q = \frac{FC},{P - V}$. This formula is essential for a business to determine the quantity of sales needed to cover all fixed and variable costs, ensuring that the business stays afloat. Signup and view all the answers

Define the audience of managerial accounting and explain their information needs.

The audience of managerial accounting is the internal management, from top management to operating levels. They require quantitative information that is used at all levels of the organization, but do not need detailed information, only aggregate measures of the company. Signup and view all the answers

How does the scope of managerial accounting differ from financial accounting?

The scope of managerial accounting broadens significantly compared to financial accounting. Managerial accounting uses free formats and does not follow specific accounting principles, while financial accounting is based on principles to organize the information. Signup and view all the answers

What is the degree of operating leverage (DOL) and how is it calculated?

The degree of operating leverage (DOL) measures the percentage change in profit associated with a change in volume or sales. It is calculated using the formula: $DOL = \frac{CM},{NI}$, where $CM$ is the contribution margin and $NI$ is the net income. Signup and view all the answers

What assumptions do managers typically make in cost-volume-profit (CVP) calculations?

Managers typically assume constant selling price, linear costs, and constant product mix for CVP calculations. Signup and view all the answers

Discuss the types of information that managerial accounting provides to the management.

Managerial accounting provides quantitative information to the management, including data collection, organization, and classification, as well as aggregate measures of the company. This information is used at all levels of the organization for decision-making purposes. Signup and view all the answers

Explain the key characteristics of managerial accounting in contrast to financial accounting.

Managerial accounting focuses on providing quantitative information to the internal management, uses free formats, and does not follow specific accounting principles. Financial accounting, on the other hand, is more focused on external reporting, follows specific accounting principles, and has set formats for organizing information. Signup and view all the answers

Define contribution margin and explain its significance in analyzing profits.

The contribution margin is the amount remaining from sales revenue after variable expenses have been deducted. It helps managers assess the impact on profits of changes in selling price, cost, or volume. Signup and view all the answers

What are the main differences in the information needs of managerial accounting and financial accounting?

Managerial accounting provides quantitative information to the internal management, focusing on aggregate measures of the company, while financial accounting is more focused on external reporting and follows specific accounting principles and formats. Signup and view all the answers

How can the contribution format income statement be expressed in an equation?

The contribution format income statement can be expressed as: [Sales - Variable\ Expenses = Contribution\ Margin - Fixed\ Expenses = Net\ Income] Signup and view all the answers

What is the significance of the margin of safety in cost-volume-profit analysis?

The margin of safety indicates how safe the company is in terms of reaching the break-even point and provides insight into the potential for profits. Signup and view all the answers

Explain the primary focus of financial accounting and managerial accounting, and how they differ.

Financial accounting is primarily focused on external persons making financial decisions, with an emphasis on historical perspective, objectivity, and verifiability. Managerial accounting, on the other hand, is concerned with managers planning for and controlling an organization, with a focus on the future, relevance, precision, and timeliness. Signup and view all the answers

Discuss the differences in reporting requirements for financial accounting and managerial accounting.

Financial accounting has a primary focus on companywide reports, must follow GAAP/IFRS and prescribed formats, and is mandatory for external reports. Managerial accounting, in contrast, focuses on segment reports, is not bound by GAAP/IFRS or any prescribed format, and is not mandatory. Signup and view all the answers

What are the professional opportunities available for accountants in non-public accounting environments according to the Institute of Management Accountants (IMA)?

The IMA estimates that over 80% of professional accountants in the U.S. work in non-public accounting environments. Signup and view all the answers

What are the requirements to become a Certified Management Accountant (CMA)?

To become a 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. Signup and view all the answers

What are the content specifications covered in the CMA exam?

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. Signup and view all the answers

What skills do managerial accounting courses aim to teach?

Managerial accounting courses aim to teach measurement skills that managers use to support planning, controlling, and decision-making activities, and focus on cost concepts. Signup and view all the answers

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 financial and managerial accounting with this quiz. Explore the key differences between the two disciplines and discover professional opportunities in the field of management accounting, including certifications and career paths.