Chapter 14 Notes

Accounting: Tools for Business Decision Making

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 14 Notes A. Managerial Accounting Basics. 1. Managerial accounting, also called management accounting, is a field of accounting that provides economic and financial information for managers and other internal users . 2. Managerial accounting applies to all types of businesses : service, merchandising, and manufacturing. It also applies to all forms of business organizations: proprietorships, partnerships, and corporations. B. Comparing Managerial and Financial Accounting. ILLUSTRATION 14-1 pg. 708 presents comparative differences between financial and managerial accounting. 1. The distinguishing features of managerial accounting are: a. Primary users of reports—internal users: officers and managers. b. Types and frequency of reports—internal reports issued as frequently as needed. c. Purpose of reports—special-purpose for specific decisions. d. Content of reports—pertains to subunits of the business and are very detailed; may extend beyond double-entry accounting system to any relevant data; standard is relevance to decisions. e. Verification process—no independent audits.
Background image of page 1

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

View Full DocumentRight Arrow Icon
C. Management Functions. 1. The management of an organization performs three broad functions. a. Planning requires management to look ahead and to establish objectives. b. Directing involves coordinating a company’s diverse activities and human resources to produce a smooth-running operation. c. Controlling is the process of keeping the firm’s activities on track. D. Organizational Structure. 1. Most companies prepare organization charts to show the interrelationships of activities and the delegation of authority and responsibility within the company. 2. Stockholders own the corporation, but they manage it indirectly through a board of directors they elect. 3. The chief executive officer (CEO) has overall responsibility for managing the business, but delegates responsibility to other officers. 4. Responsibilities within a company are classified as either: line positions—employees directly involved in the company’s primary revenue-generating operating activities, or staff positions— employees involved in activities that support line employees’ efforts.
Background image of page 2
5. The chief financial officer (CFO) is responsible for all of the
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 01/31/2010.

Page1 / 7

Chapter 14 Notes - Chapter 14 Notes A Managerial Accounting...

This preview shows document pages 1 - 4. Sign up to view the full document.

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