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Key Terms

  • Managerial Accounting: Process of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for planning, decision-making, and control
  • Planning: Setting goals and objectives and developing strategies to achieve them
  • Controlling: Monitoring actual performance and comparing it to planned performance, then taking corrective action
  • Decision-Making: Choosing among alternative courses of action
  • Financial Accounting: Accounting focused on external users, historical reporting, and compliance
  • Strategic Planning: Long-term planning (3-5 years or more)
  • Tactical Planning: Medium-term planning (1-3 years)
  • Operational Planning: Short-term planning (daily, weekly, monthly, annual)
  • Variance: Difference between actual and planned performance
  • Cost Accounting: Process of tracking, recording, and analyzing costs
  • Budget: Financial plan for a future period
  • Forecast: Prediction of future financial performance
  • Performance Measurement: Process of evaluating how well objectives are achieved
  • Key Performance Indicator (KPI): Metric used to evaluate success
  • Break-Even Analysis: Analysis to determine point where revenue equals costs
  • Cost-Benefit Analysis: Comparison of costs and benefits of alternatives
  • Institute of Management Accountants (IMA): Global association for management accountants
  • Certified Management Accountant (CMA): Professional certification for management accountants
  • Ethics: Moral principles governing behavior
  • Activity-Based Costing: Costing method that assigns costs based on activities
  • Balanced Scorecard: Performance measurement framework including financial and non-financial metrics