C01 - ACCT 220: Management Accounting I Fall 2008...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Acct220 Fall 2008 1 ACCT 220: Management Accounting I Fall 2008 Instructor: Kirill NOVOSELOV, Ph.D.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Acct220 Fall 2008 2 Introduction and Chapter 1 (Week 1) The plan: 1. Managerial vs. financial accounting 2. Overview of the course 3. Value of information 4. Cost accounting: Manufacturing and non-manufacturing costs Product and period costs Direct and indirect costs Fixed and variable costs Opportunity costs, sunk costs, out-of-pocket costs
Background image of page 2
Acct220 Fall 2008 3 What is Accounting? the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information ( American Accounting Association ) Also: storing, classifying, aggregating, etc. I.e., the information should be helpful in making good decisions Notice that economic information can be both financial and non-financial
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Acct220 Fall 2008 4 1. Financial vs. Managerial Accounting FINANCIAL ACCOUNTING Financial information Systematically collected and processed To help decision makers make better decisions Focus on aggregate information concerning the entire organization All data going into a firm’s financial statements: Income statement, Balance sheet Statement of cash flows For example: Revenues from sales, interest revenues, etc. Costs of goods sold and period expenses Value of assets – inventories, Value of liabilities – notes payable, etc. Cash receipts and cash disbursements Based on the balance sheet identity: A = L + E Regulated and mandatory Format is determined by regulations (GAAP or IFRS). Mandatory (for publicly traded firms); regulations determine what information the company must supply Emphasize objectivity and precision, frequently use historical data. Prepared for external users of information (individuals who are not part of the company). Shareholders or new investors use financial accounting information when deciding whether to buy or sell a company’s stock or bonds Banks use financial accounting information when deciding whether to lend money to a company, how much to lend, and what interest to charge
Background image of page 4
Acct220 Fall 2008 5 1. Financial vs. Managerial Accounting MANAGERIAL ACCOUNTING Financial and non-financial information Systematically collected and processed To help decision makers make better decisions Detailed segment reports about departments, products, customers, and employees E.g., detailed product cost data: Depreciation Cost of new machinery Rent on factory or machinery Wages Cost of paper clips No underlying unity Many approaches are used depending upon the users’ (managers’) decision problem. Not regulated and not required
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/17/2009 for the course ACCT ACCT 220 taught by Professor Kk during the Spring '09 term at HKUST.

Page1 / 38

C01 - ACCT 220: Management Accounting I Fall 2008...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online