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level: Nature of Cost and Management Accounting

Questions and Answers List

level questions: Nature of Cost and Management Accounting

Question	Answer
A set of interrelated parts that consists of manual and computer parts and uses processes such as collecting, recording, summarizing, analyzing, and managing data to provide information to user.	Accounting Information System
Objective of an Accounting Information System	To provide information to users
What does the image above represent?	A model of an Accounting Information system
The two major subsystems of the Accounting Information system	The financial accounting system and the cost management system
Primarily concerned with producing information for the company’s external information users. It uses well-specified economic events as inputs, and its processes follow certain rules and conventions	Financial Accounting System
Primarily concerned with producing reports for internal information users, using inputs and processes needed to satisfy management objectives.	Cost Management System
Used for: 1. Costing of products, services, and other objects of interest to management; 2. Planning and control; and 3. Decision making.	Cost Management System
Two major subsystems of the Cost and Management System	The cost accounting system and the operational control system
Subsystem designed to provide accurate and timely feedback concerning the performance of managers and others relative to their planning and control of activities.	Operational Control System
Subsystem designed to assign costs to individual products and services and other cost objects as specified by management.	Cost Accounting System
what is outlined in the diagram above?	The Subsystems of an Accounting Information System
Globalisation; increased competitiveness Growth in the Service industry Advances in information and manufacturing technology.	Factors affecting cost management practices
Increased competition has made managers in this industry more conscious of the need to have accurate cost information for planning, controlling, continuous improvement, and decision making	The role of Cost Accounting in the service industry
Manufacturing management approaches and technology have allowed firms to increase quality, reduce inventories, eliminate waste, and reduce costs. As such, the components of this accounting system are severely influenced	Cost Accounting System
Another name for cost management	Management Accounting