| activity accounting | The collection of financial or operational performance information about significant activities in an enterprise.
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| activity-based costing (ABC) system | A two-stage procedure used to assign overhead costs to products or services produced. In the first stage, significant activities are identified, and overhead costs are assigned to activity cost pools in accordance with the way resources are consumed by the activities. In the second stage, the overhead costs are allocated from each activity cost pool to each product line in proportion to the amount of the cost driver consumed by the product line.
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| activity-based management (ABM) | Using an activity-based costing system to improve the operations of an organization.
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| attention-directing function | The function of managerial accounting information in pointing out to managers issues that need their attention.
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| balanced scorecard | A model of business performance evaluation that balances measures of financial performance, internal operations, innovation and learning, and customer satisfaction.
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| Certified Management Accountant (CMA) | An accountant who has earned professional certification in managerial accounting.
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| chief financial officer (CFO) | An organization's top managerial and financial accountant. (Also see controller.)
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| continuous improvement | The constant effort to eliminate waste, reduce response time, simplify the design of both products and processes, and improve quality and customer service.
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| controller (or comptroller) | The top managerial and financial accountant in an organization. Supervises the accounting department and assists management at all levels in interpreting and using managerial-accounting information. (Also, see chief financial officer.)
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| cost accounting system | Part of the basic accounting system that accumulates cost for use in both managerial and financial accounting.
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| cost driver | A characteristic of an activity or event that results in the incurrence of costs by that activity or event.
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| cost management system (CMS) | A management planning and controlling system that measures the cost of significant activities, identifies non-value-added costs, and identifies activities that will improve organizational performance.
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| employee empowerment | The concept of encouraging and authorizing workers to take the initiative to improve operations, reduce costs, and improve product quality and customer service.
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| financial accounting | The use of accounting information for reporting to parties outside the organization.
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| internal auditor | An accountant who reviews the accounting procedures, records, and reports in both the controller's and treasurer's areas of responsibility.
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| just-in-time (JIT) inventory and production management system | A comprehensive inventory and manufacturing control system in which no materials are purchased and no products are manufactured until they are needed.
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| line positions | Positions held by managers who are directly involved in providing the goods or services that constitute an organization's primary goals.
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| managerial accounting | The process of identifying, measuring, analyzing, interpreting, and communicating information in pursuit of an organization's goals.
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| non-value-added costs | The costs of activities that can be eliminated without deterioration of product quality, performance, or perceived value.
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| staff positions | Positions held by managers who are only indirectly involved in producing an organization's product or service.
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| strategic cost management | Overall recognition of the cost relationships among the activities in the value chain, and the process of managing those cost relationships to a firm's advantage.
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| theory of constraints | A management approach that focuses on identifying and relaxing the constraints that limit an organization's ability to reach a higher level of goal attainment.
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| total quality management (TQM) | The broad set of management and control processes designed to focus an entire organization and all of its employees on providing products or services that do the best possible job of satisfying the customer.
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| treasurer | An accountant in a staff position who is responsible for managing an organization's relationships with investors and creditors and maintaining custody of the organization's cash, investments, and other assets.
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| value chain | An organization's set of linked, value-creating activities, ranging from securing basic raw materials and energy to the ultimate delivery of products and services.
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