ACCT 2102 Chapter 1 Notes

ACCT 2102 Chapter 1 Notes - Managerial Accounting Concepts...

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Managerial Accounting Concepts and Decision-Making Support (Chapter 1) What is managerial accounting? Provides information for o Planning – identify and set goals and figure out how to achieve goals o Controlling – comparing expectations to actual results o Decision making – choosing between available alternatives Financial Accounting vs. Managerial Accounting FA: Tailored to external users (investors) MA: Tailored to internal users (managers and employees) FA: external rules MA: objective and subjective information FA: focused on numbers MA: focused on people FA: recording the past MA: focused on benefiting the future Manufacturing is most difficult to account for. Revenue – what you gain from a relationship with your customer Expense – cost becomes an expense when revenue is generated Cost object – a thing that you want to assign cost to Costs Period cost – incurred in the office (Selling, General, & Administrative Expense) (SG&A) Product cost – incurred in the factory o Direct cost – cost that is easily and conveniently traceable to a cost object
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