Managerial Accounting Is Used by Managers to

question 75

Multiple Choice

Managerial accounting is used by managers to

• A)plan, evaluate, and control financial statements and to assure appropriate use of and accountability for organizational resources.
• B)generate and analyze relevant information to support managers' strategic decision making.
• C)focus on past results to aid in decision-making for managers.
• D)decide the long-term direction of a company and comply with GAAP.

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Definitions:

Return on Investment (ROI)

An evaluation metric that assesses the effectiveness or financial gain of an investment by dividing the net earnings by the initial investment cost.

Residual Income

The net operating income that an investment center earns above the minimum required return on its operating assets.

Non-Value-Added Time

Time spent on production or administrative activities that do not contribute to the customer's value perception of the product or service.

ISO 9000 Standards

A set of international standards on quality management and quality assurance developed to help companies effectively document the quality system elements needed to maintain an efficient quality system.