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Accounting 11b

Accounting 11b - Accounting 11b John D Hancock Day 2 of...

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Accounting 11b John D. Hancock Day 2 of class. Day 1 in binder on paper 1. The nature of the Firm- Ronald Coase- Why is it we see firms existing in the world? “clumps in the cottage cheese” I am sooo hungry. Resources w/in the firm are determined by Managers (no internal market), but resources flowing into the firm have prices determined by the market. Firm must operate w/in constraint of market place for resources and turn around and sell their products in another market that has an equilibrium prices determined. a. Market Data b. Internal Data 2. a. Focus i. Financial- external info 1. very specific rule GAAP ii. Managerial- internal to the CO 1. Don’t have same type of rules, bc scope of questions determines the nature of the investigation, requires much more creative approach b. Structure (GAAP)-provides structure for financial i. Managerial is not AS structured- but don’t’ get carried away ii. Focus on commonly accepted methods c. Objectivity- required for both systems i. Critical for financial accounting ii. Book: Sunbeam Corp CEO- “hit the numbers regardless of numbers real or not” iii. Managerial requires objectivity but again more of a situation where we can decide what the numbers represent. 1. Can use subjectivity as long as end users understand how it entered the analysis d. Subject i. Managerial- provide info for internal decision makers.
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ii. Financial- Generate consistent financial records that represent the financial history of a CO 1. Statement of cash floors 2. cash flows 3. retained earnings 4. Balance sheet 5. etc 3. Business Buzzwords a. JIT- Just in Time i. Management and control of Inventory 1. Retain and Wholesale need to maintain inventory to meet demands of customers 2. Manufacturers a. Recognized the fact that there is a lot of value tied up in inventory- could have purchased more productive equipments b. Opportunity cost associated w/maintaining inventory, but benefit is that inventory makes you less subject to variables in the market. c. Reduce amount of inventory (value) d. Have raw materials provided just in time, not a day early. ii. Ex. CPU chip manufacturer- (Jarden?) 1. factory has suppliers in the same building with the manufacturer in the center of the building. The raw materials are not purchased until they are needed. 2. The company has zero inventory. Suppliers have to maintain cost of inventory- suppliers charger more. b. TQM- Total Quality Management i. Demming (prof at ivy leaguein 1960s) ii. Never satisfied w/how things are going. Always looking for improvement. Fewer mistakes, fewer errors, less waste. 1. Went to Japan w/message of TQM, Japanese listened to him closely, implemented concepts. a.
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Accounting 11b - Accounting 11b John D Hancock Day 2 of...

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