chapter 01 solution

chapter 01 solution - CHAPTER 1 THE ACCOUNTANT'S ROLE IN...

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Unformatted text preview: CHAPTER 1 THE ACCOUNTANT'S ROLE IN THE ORGANIZATION See the front matter of this Solutions Manual for suggestions regarding your choices of assignment material for each chapter. 1-1 Management accountants can help in formulating strategy by providing information about the sources of competitive advantagefor example, the cost, productivity, or efficiency advantage of their company relative to competitors or the premium prices a company can charge relative to the costs of adding features that make its products or services distinctive. 1-2 Management accounting measures and reports financial and nonfinancial information that helps managers make decisions to fulfill the goals of an organization. It focuses on internal reporting. Financial accounting focuses on reporting to external parties. It measures and records business transactions and provides financial statements that are based on generally accepted accounting principles (GAAP). Other differences include: (1) management accounting emphasizes the future, (2) management accounting influences the behavior of managers and employees (3) management accounting is not restricted by Generally Accepted Accounting Principles and (4) management accounting covers more topics. 1.3 Planning decisions focus on (a) selecting organization goals, predicting results under various alternative ways of achieving those goals, deciding how to attain the desired goals, and (b) communicating the goals and how to attain them to the entire organization. Control decisions focus on (a) taking actions that implement the planning decisions, and (b) deciding how to evaluate performance and what related feedback to provide that will help future decision making. 1.4 The three roles are: 1. Problem solvingcomparative analysis for decision making. 2. Scorekeepingaccumulating data and reporting results to all levels of management describing how the organization is doing. 3. Attention directinghelping managers to focus on opportunities and problems. 1.5 Financial accounting is constrained by generally accepted accounting principles. Management accounting is not restricted to these principles. The result is that: management accounting allows managers to charge interest on owners capital to help judge a divisions performance, even though such a charge is not allowed under GAAP, management accounting can include assets or liabilities (such as brand names developed internally) not recognized under GAAP, and management accounting can use asset or liability measurement rules (such as present values or resale prices) not permitted under GAAP. 1-1 1-6 The business functions in the value chain are: Research and development generating and experimenting with ideas related to new products, services, or processes....
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chapter 01 solution - CHAPTER 1 THE ACCOUNTANT'S ROLE IN...

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