ACCT620Chapter1

ACCT620Chapter1 - CHAPTER1 FUNDAMENTALCONCEPTS

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CHAPTER 1 FUNDAMENTAL CONCEPTS Questions, Exercises, Problems, and Cases:  Answers and Solutions 1.1 The first question at the end of each chapter requires the student to review the  important   concepts   or   terms   discussed   in   the   chapter.     In   addition   to   the  definitions or descriptions in the chapter, the end of the book has a glossary. 1.2 Titles could be Controller, Vice-President of Finance, or Chief Financial Officer. 1.3 The two major uses of managerial accounting information are (1) information for  managerial decision making (for example, make-or-buy decisions, store closure  decisions,   capital   investment   decisions),   and   (2)   information   for   managerial  control and performance evaluation (for example, budgeting, comparing actual  performance with norms or standards).  The first use, which is the focus of Part  II of this book, usually  requires  special purpose  reports  that  estimate  how  revenues,   costs,   and   investments   will   differ   among   the   alternatives   being  considered.  The second use, which is the focus of Part III of this book, usually  involves   routine   monthly,   quarterly,   and   annual   performance   reports.  Information for planning requires estimates of future costs, revenues, and other  data, while information for performance evaluation is generally based on data  about the past. 1.4 Total Quality Management (TQM) means the organization is managed to excel  on all dimensions and quality is ultimately defined by the customer.  Under total  quality management, performance measures are likely to include things such as  product reliability and service delivery, as well as traditional measures like  product profitability. 1.5 The  purchasing  employee  subjected  himself or herself to real, or perceived,  conflicts   of   interest   by   taking   gifts   from   people   with   whom   the   employee  conducts business.   It is very important for buyers to maintain an objective  relationship with their suppliers so purchases are “arms-length” transactions. The steps that the accounting employee should take would be to speak with  his, or her, superior in an attempt to stop the violation.  The employee should  move up the management ladder until a satisfactory resolution is reached.  The  Institute of Management Accountants has an 800 number that the employee can  call to seek additional advice.
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This note was uploaded on 01/11/2012 for the course ACCT 202 taught by Professor Terru during the Spring '11 term at NYU.

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ACCT620Chapter1 - CHAPTER1 FUNDAMENTALCONCEPTS

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