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Managing Costs and Finance (MA2) - For Exams from September 2023 - August 2024
Set Type # of Cards Provider
Default 73 cards acca

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1 Organisation An entity or group working together to achieve a common objective.

2 Business organisation An entity or group working together to achieve commercial goals. Types of business organisation include sole traders, partnerships, and companies.

3 Management Information Information used by managers to help organisations achieve their goals.

4 Responsibility accounting Accounting method for costs according to the manager responsible for those costs.

5 Responsibility centre An activity or area of responsibility in an organisation a manager is responsible for and has control over.

6 Controllable cost A cost that is within the control of a manager.

7 Uncontrollable cost A cost that is beyond the control of a manager.

8 Cost centre An activity or area of responsibility in an organisation that generates costs but is not responsible for generating revenue or producing direct profit.

9 Profit centre An activity or area of responsibility in an organisation to which costs and revenue can be attributed.

10 Investment centre An activity or area of responsibility in an organisation to which costs and revenue can be attributed and capital deployment.

11 Business unit A particular activity or area of responsibility in an organisation that has a degree of autonomy in deciding plans and processes for generating profits.

12 Cost The amount paid to buy or make something.

13 Costing Method of understanding the costs of an item.

14 Cost unit A unit of product or service with which costs are associated.

15 Budget A plan expressed in monetary or quantity terms.

16 Responsibility accounting accounting method for costs according to the manager responsible for those costs.

17 Responsibility centre an activity or area of responsibility in an organisation a manager is responsible for and has control over.

18 Controllable cost a cost that is within the control of a manager.

19 Uncontrollable cost a cost that is beyond the control of a manager.

20 Cost centre an activity or area of responsibility in an organisation that generates costs but is not responsible for generating revenue or producing direct profit.

21 Revenue centre an activity or area of responsibility in an organisation that generates revenue. May also be responsible for directly attributable selling costs.

22 Profit centre an activity or area of an organisation responsible for costs and revenue.

23 Investment centre an activity or area of an organisation responsible for costs, revenue, and capital investment.

24 Cost behaviour The changes in cost according to the level of activity.

25 Variable costs Costs that change according to the level of activity

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26 Fixed costs costs that remain constant despite changes in activity level.

27 Mixed costs costs that have both variable and fixed components. Also known as semi-variable or semi-fixed costs.

28 Stepped fixed costs costs that remain constant for a range of activity; will increase to a higher constant for a higher range of activity.

29 Direct costs Costs that can be measured reliably and directly traced to a specific cost unit.
All other costs are indirect costs.

30 Prime costs The total sum of direct costs, also known as the total direct cost.

31 Indirect costs Costs that are not directly traceable to a cost unit; also known as overheads.

32 Cost card A record of the costs associated with producing and selling a single product or service.

33 Source document A record containing the details to prove a business transaction. Examples include supplier invoices, bank statements, deposit slips and employee time cards.

34 Bookkeeping Recording financial transactions.

35 Management accounting Provision of information to managers to operate efficiently and effectively.

36 Financial accounting Recording, analysing and reporting the organisation's financial transactions.

37 Code A unique set of characters used to identify an item, consisting of numbers, letters, or other symbols.

38 Coding system System by which codes are created, managed and used.

39 Chart of accounts A document that contains comprehensive details on the classes of codes and the accounts and items they identify.

40 Fixed cost A cost that remains the same irrespective of the output level.

41 Variable cost A cost that changes in direct proportion to the output level.

42 Budget A financial plan; that shows income and costs for a period.

43 Forecast An estimate of future performance, usually created referring to actual results for the period.

44 Flexible budget A budget that can change to reflect multiple activity levels.

45 Variance A difference between budgeted and actual results.

46 Data Raw, unprocessed facts, figures, characters, or words.

47 Information Data that has been processed to have meaning.

48 Chart Title Name of the chart, describing its contents and purpose.

49 Axis Title Defines the axes of the chart.

50 Legend (key) Provides context data points displayed on the chart.

51 Gridlines Lines on the chart to assist the user in comparing data points to axes.

52 Inflation A sustained increase in the price of goods and services over time.

53 Obsolescence Reduction in inventory value due to it becoming irrelevant to the organisation’s needs.

54 Deterioration Reduction in inventory value due to degradation in its qualities.

55 Direct labour Labour whose work is directly attributable to producing a product or service.
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56 Indirect labour Labour not directly attributable to the production of a product or service.

57 Expense Decreases in economic benefits during the accounting period in the form of outflows, depletions of assets, or incurrences of liabilities.
IASB

58 Residual value The value of the asset after the end of its useful life. Also known as scrap value.

59 Annual Depreciation The depreciation charge for the year on the asset.

60 Accumulated Depreciation The total depreciation charged up to a point in the asset’s useful life.

61 Carrying amount The asset’s value is reflected in the accounts. It is the cost of the asset less accumulated depreciation.

62 Job costing is the process of calculating the costs of a specific job.

63 Limiting Factor A factor that limits an organisation’s activities; examples include sales demand or resource scarcity.

64 Relevant costs Costs that change as a result of a decision. It also includes opportunity costs.

65 Opportunity cost The benefit forgone from the next best alternative to the chosen option.

66 Cash budgets are financial plans that show an organisation’s planned cash inflows and outflows over a period.

67 Inflation is an increase in the prices of goods and services over time.

68 Characteristics of useful information A ccurate

Complete
Cost effective
U ser targeted
Relevant
A uthoritative
Timely
Easy to use

69 Line chart Line charts are useful for showing trends over time

70 Bar Charts Bar chats help show comparisons

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71 Pie Chart Shows the relative size of the components that make up a total

72 Scatter graph Scatter graphs show results over two axes, which help identify correlations and trends

73 Table Tables help show precise numerical data such as financial statements