Chapter 1 - Chapter1 ManagerialAccounting andthe...

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1 Chapter 1 Managerial Accounting and the  Business Environment
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2 Key difference between managerial and  financial accounting Managerial  accounting provides information  for  managers  of an organization who  plan  and control its operations.  Internal information. Financial  accounting provides information to  satisfy the needs  of stockholders, creditors  and others who are  outside the organization .   External information.
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3 Why managers need accounting   information Accounting information required to support  these activities includes: Budgets; Operating reports; and Performance reports.
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4 Differences between managerial and  financial accounting Managerial accounting: provides information for  internal  users; stresses the  future ; is  not  constrained by GAAP; focuses on  parts  of the organization; is an  optional  activity (usually accepted);  and stresses  relevance  and  timeliness .
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5 Differences between managerial and  financial accounting Financial accounting: focuses on the needs of  external  users; reports the  past ; is  governed by GAAP; is  mandatory ; emphasizes  verifiability  and  objectivity and reports on the entity as a  whole .
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6 Similarities between managerial and  financial accounting Managerial AND financial accounting: both rely on the  same  accounting system; both are concerned with  stewardship(responsibility) ; and both  have the objective of providing  relevant  and  useful  information to the end  user(end users are different between the  two).
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7 Planning and Control Cycle What it is : The flow of management  activities through: Planning; Directing and motivating; and Controlling.
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8 Planning and Control Cycle
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9 Planning and Control Cycle Planning (aka budgeting) selecting  a course  of action and  specifying  how the action will  be implemented. Understand the key objective(s) of the  organization. Identify alternatives – gather data and  analyze.
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10 Planning and Control Cycle Select from the best alternative – trade off  between opportunities and use of resources. Planning selecting  a course of action and  specifying  how the action will be  implemented. Develop plans (budgets) – determine  resources (people, dollars) that will be  required
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11 Planning and Control Cycle Directing and Motivating mobilizing  people  to  carry out plans  and run routine operations. Managers make many small decisions that 
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This note was uploaded on 02/01/2010 for the course BUS 254 taught by Professor Favere-marchesi during the Summer '10 term at Simon Fraser.

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Chapter 1 - Chapter1 ManagerialAccounting andthe...

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