Managment Accounting
Management Accounting is defined as the measuring, analyzing the business transactions for organizations goal. Management accounting helps the manager to take decision within the organization. Management accounting is the combination of both financial and non-financial decisions making information’s to managers.
Income Statement Definition: Income statement is the summary of a management’s performance as reflected in the profitability (or lack of it) of a firm over a certain period. It itemizes the revenues and expenses of past that led to the current profit or loss,
Human Skills Definition: Human skills involve the ability to work well with other people both individually and in group. Because managers deal directly with people, this skill is crucial! Managers with good human skills are able to get the best out of their people.
Horizontal/Trend Analysis Definition: A side-by-side comparison of two or more years’ financial statements. Click here to read full article about horizontal or trend analysis. Relevant terms: Vertical Analysis
High-Low Point Method Definition: A method of separating a mixed cost into its fixed and variable elements by analyzing the change in cost between the high and low levels of activity.
Half-Year Convention Definition: A requirement under the Modified Accelerated Cost Recovery System (MACRS) that allows a company to take only a half year’s depreciation in the first and last years of an asset’s depreciation period.
Dependent Variable Definition: A variable that reacts or responds to some causal factor; total cost is the dependent variable, as represented by the letter Y, in the equation: Y = a + bX.
Denominator Activity definition: The activity figure used to compute the predetermined overhead rate.
General Environment Definition: Broad external conditions that may affect the organization.
Full Costing Definition: Full costing is a costing method that includes all manufacturing costs – direct materials, direct labor, and both variable and fixed overhead – as part of the cost of a finished unit of product. This term is synonymous with absorption costing.
Flexible Budget Definition: A budget that is designed to cover a range of activity and that can be used to develop budgeted costs at any point within that range to compare to actual costs incurred.
Flexible Budget Definition: A budget that is designed to cover a range of activity and that can be used to develop budgeted costs at any point within that range to compare to actual costs incurred.
Fixed Manufacturing Overhead Cost Deferred in Inventory Definition: The portion of the fixed manufacturing overhead cost of a period that goes into inventory under the absorption costing method as a result of production exceeding sales. Also see: Fixed manufacturing overhead cost released from inventory
Fixed Manufacturing Overhead Cost Released From Inventory Definition: The portion of the fixed manufacturing overhead cost of a prior period that becomes an expense of the current period under the absorption costing method as a result of sales exceeding production.
Fixed Cost Definition: A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. If a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity.
First Stage Allocation Definition: The process by which overhead costs are assigned to activity cost pools in an activity-based costing system.
First Line Managers Definition: Managers at the lowest level of the organization who manage the work of non-managerial employees who are directly involved with the production or creation of the organization’s products.
Finished Goods Definition: Units of product that have been completed but have not yet been sold to customers.
Financing Activities Definition: All transactions (other than payment of interest) involving borrowing from creditors or repaying creditors as well as transactions with the company’s owners (except stock dividends and stock splits). Relevant terms: Cash flow statement Operating activities Investing activities Cash equivalents