CMA Flash Cards

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sgrachek
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278362
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CMA Flash Cards
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2014-07-07 16:18:44
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CMA Terms
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CMA glossary terms and definitions.
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  1. Abnormal Spoilage
    Unacceptable units that are not expected to occur under an efficientproduction process.
  2. Absorbed Overhead
    That portion of factory indirect cost that has been allocated to aspecific product, or saleable service. (Also called AppliedOverhead.)
  3. Absorption Costing
    A costing system that assigns to inventory all types of manufacturingcosts, including direct, indirect, fixed and variable. (Also called FullAbsorption Costing.)
  4. Accelerated Depreciation
    A pattern of depreciation in which the amount of depreciationcomputed in the early years is greater than the amounts computedin the later years.
  5. Accounting
    The process of identifying, classifying, measuring, recording andcommunicating in monetary terms transactions and events of aneconomic entity that are of a financial character.
  6. Accounting Profit
    Revenue less all expenses included in the entity’s incomestatement.
  7. Accounting Standards
    Principles and procedures to be followed by accountants asformulated by an authoritative body. (Also called AccountingPrinciples.)
  8. Accounting System
    Methods, procedures, and standards followed in accumulating,classifying, recording and reporting business events andtransactions.
  9. Accounts Payable
    Monies that are due to a vendor (supplier) for merchandise orservices rendered.
  10. Accounts PayableTurnover
    A financial ratio used to measure the rate at which an entity pays offits suppliers.
  11. Accounts Receivable
    Monies due to an entity from customers who have boughtmerchandise or received services on account.
  12. Accounts ReceivableTurnover
    A financial ratio used to measure asset utilization and a company’sability to collect cash from credit sales to its customers.
  13. Accrual Accounting
    The method of recognizing and recording (a) revenues whenearned, and (b) expenses when incurred, both irrespective of thetime when cash is received or paid
  14. Accrued
    The accumulation of income that is due but has not been receivedor a cost that is incurred but has not been paid by an entity duringthe accounting period.
  15. AccumulatedDepreciation
    The amount of depreciation expense related to a fixed asset thathas been recognized as an expense from the date of acquisition ofthat asset.
  16. Acid-Test Ratio
    A ratio that measures an entity’s ability to pay off short-termobligations using the most liquid current assets (excludinginventory). (Also called Quick Ratio.)
  17. Acquisition Cost
    The value of cash or other resources given up in exchange forgoods or services. It includes all costs necessary to get the assetready for its intended use. (Also called Historical Cost or OriginalCost.)
  18. Activity Driver(Cost Driver )
    A factor used to assign cost from an activity to a cost object. Ameasure of the frequency and intensity of use of an activity by acost object.
  19. Activity-Based Budgeting
    An approach to budgeting that involves quantifying activities andprocesses and forecasting their costs in order to achieve strategicgoals and improve performance.
  20. Activity-Based Costing(ABC)
    A costing system that (a) identifies the relationship between theincurrence of cost and activities, (b) determines the underlying“driver” of the activities, (c) establishes cost pools related toindividual “drivers,” (d) develops costing rates, and (e) applies costto product on the basis of resources consumed (drivers).
  21. Activity-BasedManagement
    Management and decision making method using activity basedcosting information in an effort to improve customer satisfaction andprofits by enhancing activities that add value and reducing activitiesthat do not add value to the customer.
  22. Actual Cost
    Acquisition cost, historical cost, or original cost.
  23. Additional Paid-in Capital
    The amount received by a company from its shareholders forpurchase of shares of stock above the par or stated value of thestock.
  24. Administrative Expense
    Costs incurred for the general operation of an enterprise as a whole,as contrasted with costs related to a more specific function such asmanufacturing or selling. (Also called General and AdministrativeExpense.)
  25. Allocate
    Identification of costs with cost objectives; apportioning ordistributing costs to products, processes, jobs, or departments.
  26. Allocation Base
    The basis used to assign indirect costs to cost objects, such aslabor or machine hours.
  27. Allowance forUncollectible Accounts
    A contra account to Accounts Receivable established to record theestimated percentage of Accounts Receivable that will not becollected.
  28. Amortization
    The accounting process of allocating costs to the time periodsduring which such costs are consumed.
  29. Annual Report
    A report prepared by entities after the close of each reporting yearthat includes financial statements and disclosure, an audit report,information from management, and other pertinent informationconcerning the entity’s financial condition and operatingperformance.
  30. Annuity
    A series of payments of an equal amount at fixed intervals for aspecified number of periods.
  31. Application Controls
    Controls, such as input controls, adopted to safeguard specific dataprocessing activity, such as payroll. Their purpose is to providereasonable assurance that data is properly processed, recorded,and reported.
  32. Appraisal Costs
    Costs incurred to determine whether products and services areconforming to customer and/or manufacturing requirements.Examples include inspection and testing costs.
  33. Appreciation
    The situation where there is an increase in economic worth causedby rising market prices.
  34. Arbitrage Pricing Theory(APT)
    A framework for analyzing the relationship between risks and ratesof return on securities, especially common stocks. It asserts that therisk elements that influence returns on securities include (1)inflation, (2) industrial production, (3) risk premiums, and (4) theslope of the term structure of interest rates.
  35. Asset
    1. Probable future economic benefits obtained by an entity as aresult of past transactions.2. Any owned physical object or right having economic value to itsowners, expressed for accounting purposes in terms of its cost orother value (such as current replacement cost).
  36. Asset Coverage
    A measure of the extent to which a company is able to cover its debtobligations after all liabilities have been satisfied.
  37. Asset Turnover
    A financial ratio that assesses how efficiently an entity is utilizing itsassets; it relates sales to assets. (Also called Total Asset Turnover.)
  38. Audit
    The systematic examination by analyses, confirmation, and tests ofaccounting records to confirm with reasonable assurance that therecords adequately reflect economic status and operations.
  39. Audit Committee
    Members of the board of directors (in the case of corporations),trustees, legislative bodies, or similar governance boards, withresponsibilities for oversight and direction of the internal auditingfunction.
  40. Audit Report
    A written document that presents the scope and results of the audit.
  41. Authoritative (top-down)Budgeting
    A budgeting process where all budgets for the organization areprepared by top management, including budgets for lower-leveloperations.
  42. Authority
    The formal and legitimate right of a manager to make decisions,issue orders, and allocate resources to achieve organizationallydesired outcomes.
  43. Average CollectionPeriod
    A measure of the average number of days it takes to collectreceivables (credit sales). (Also called Days Sales Outstanding andDays Sales in Receivables.)
  44. Average Fixed Cost
    Total fixed costs divided by the number of units produced. (Fixedcost per unit)
  45. Average Total Cost
    Total manufacturing costs divided by the number of units produced.Sometimes called per unit cost.
  46. Average Variable Cost
    Total variable cost divided by the number of units produced.

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