Chapter 1 - Rob Oostendorp January 8 2002 Chapter 1...

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Rob Oostendorp January 8, 2002 Chapter 1 Questions: 1, 2, 9, 11, 15, 16 1. Financial accounting is primarily reported for those outside the business while managerial accounting is used for internal purposes (planning, directing and motivating, or controlling). Financial accounting has emphasis on past activities while managerial accounting has an emphasis on activities that will take place in the future. Financial accounting relies on precision while managerial account relies on timeliness. Managerial account does not need to follow GAAP while financial accounting is required to. Managerial account is very detailed and reports on departments on the business while financial accounting is a summarization of the business as a whole. Lastly, organizations such as the SEC or the IRS require financial accounting while managerial account, being internal, is not mandatory. 2. Planning, Directing and motivating, and controlling. 9. By reducing setup time, a business doesn’t lose as much time during a setup/change-over. In many cases this will allow the business to keep factory lines running as appose to temporarily shutting down the operation. By not temporarily shutting down, a business can respond to a market better, reduce the cycle times. 11. By using the JIT system a business can free up cash and use it in other parts of the
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Chapter 1 - Rob Oostendorp January 8 2002 Chapter 1...

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