Chapter 1 - Chapter 1 Managerial Accounting and the...

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Chapter 1- Managerial Accounting and the Business Environment I. The Work of Management and the Need for Managerial Accounting Information i. Managerial Accounting- concerned with providing information to managers—that is people inside an organization who direct and control its operations ii. Financial Accounting- concerned with providing information to stockholders, creditors, and others who are outside an organization b. Planning i. Involves selecting a course of action and specifying how the action will be implemented ii. Identify alternatives and then select from among the alternatives and the one that does the best job of furthering the organization’s objectives iii. Budgets- prepared under the direction of the controller, who is the manager in charge of the Department c. Directing and Motivating i. Managers must oversee day-to-day activities and keep the organization functioning smoothly ii. Requires motivation and efficiency in directing people d. Controlling i. Control- managers seek to ensure that the plan is being followed ii. Feedback- signals whether operations are on track 1. Performance Report- Compares budgeted to actual results and suggests where operations are not proceeding as
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