Chapter 1 - ACC 200 Spring 2011 Chapter 1 Introduction to...

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Click to edit Master subtitle style ACC 200 – Spring 2011 Chapter 1 Introduction to Managerial Christopher T. McKittrick CPA, MBA, CFE College of Management
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Chapter 1 Objectives – Accounting Information and Managerial Decisions ¢ Describe the uses and users of accounting information ¢ Contrast financial and managerial accounting and distinguish between the information needs of external and internal users ¢ Describe the three primary activities of managers and the three primary functional areas of an organization ¢ Explain the role of the managerial accountant ¢ Describe and apply the decision-making role of managers ¢ Apply a basic four-step decision-making model ¢ Evaluate the role of relevant factors in decision making
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Accounting Information TRADITIONA L FINANCIAL Accounting Information NONFINANCIAL Information (Internal Users primarily) Other Quantitative Information: Percentage of Defects # Customer Complaints Warranty Claims Financial Information: Assets Liabilities Revenues Gross Margin Operating Qualitative Informatio n: Customer & Employee Satisfaction Product &
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44 Traditional Financial Accounting ¢ Historic in Nature ¢ Focused on the Past ¢ Focused on External Users ¢ Focused on the preparation of Financial Statements
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55 Managerial Accounting ¢ Focused on internal users ¢ Focused on the present and future ¢ More flexible (not constrained by GAAP) ¢ Concerned with segments of a business rather than the company as a whole ¢ More timely but may be less “accurate”
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External Stockholders Potential Investors Creditors Government Agencies Internal Employees Employee Teams Departments Regions Top Financial Accounting Managerial Accounting Users of Accounting Information
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Types of Information Needed By Information about current and future profitability of a company Examples : annual reports, registration statements, prospectuses Stockholde rs & Investors
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Types of Information Needed By to repay loans. Examples : cash flow statements, financial ratios Stockholde rs & Investors Creditors
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The Information Needs of External Users {E45E8D47-E93C-4082-9F A-42B8342407AD} Shareholders and Creditors {63B 5DC7-0ACA-4540-A057-D9F5495E0518} income, cash flow, assets and liabilities, earnings per share, et {54B47 AE-C CF-41CB-9BCE-4 4 85F0845 } Annual reports, financial statements, and othe USER: Accounting Information Needed: SOURCE:
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Types of Information Needed By Specific information needs such as income measurement, payroll, and taxable assets Examples Governme nt Agencies Suppliers and Customers
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The Information Needs of External Users {E45E8D47-E93C-4082-9F A-42B8342407AD} Government Agencies {63B 5DC7-0ACA-4540-A057-D9F5495E0518} es, assets, comparisons of actual expenditures to budgets, etc.
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Chapter 1 - ACC 200 Spring 2011 Chapter 1 Introduction to...

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