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MANAGERIAL ACCOUNTING - IIE 211 CLASS 1 Korea U Intranet Garrison Text Site garrison11e eBook Text Site CHAPTER 1 MANAGERIAL ACCOUTING AND THE BUSINESS ENVIRONMENT LECTURE NOTES (CLASS 1 _ Tuesday, 7/3) 1. COURSE OURVIEW (COURSE OUTLINE) 2. CHAPTER 1 OVERVIEW 3. IN CLASS REVIEW EXERCISE 1-3 4. IN CLASS REVIEW PROBLEM 1-8 5. CHAPTER 2 TERMINOLOGY - INTRODUCTION HW DUE next class (CLASS 2_Wednesday, 7/4) 1. READ/ REVIEW CHAPTER 2 2. CHAPTER OVERVIEW A. Managerial vs. Financial Accounting. It is a good idea to begin the course by contrasting managerial with financial accounting. Financial accounting is concerned with reports to owners, creditors, and others outside of the company. Managerial accounting is concerned with reports prepared for the internal use of management. Since these are internal reports, there is no requirement that management accounting reports conform to GAAP. Indeed, it is desirable to depart from GAAP in some instances. B. Organizations. (Exercise 1-1.) A review of the work of managers and the organizations in which they operate is useful. You may want to take a few moments and discuss some organizations that students are familiar with. Examples of organizations that students may mention include: sole proprietorships, partnerships, corporations, churches, cities, military units, social clubs, foundations, and families. With the various types of organizations listed, focus on two points. 1. An organization consists of people who are brought together for some common purpose. It is a group of people working together that is the essence of any organization, not the particular assets used by these people. 2. People work together in an organization in order to attain some goals. The objectives or goals may be clearly stated, but often they are not. The financial objectives for most organizations, even if not articulated, are fairly straightforward. In commercial enterprises, 1
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MANAGERIAL ACCOUNTING - IIE 211 CLASS 1 the primary goal is ordinarily to maximize profits or to at least earn a “satisfactory profit.” In nonprofit organizations, avoiding losses is more of a constraint than a goal. Nevertheless, managers need virtually the same information to avoid losses that they need to maximize profits. While we usually talk about profit-making companies in the course, almost everything we say applies as well to nonprofit organizations. C. The Work of Management and the Planning and Control Cycle. (Exercise 1-1.) While it is clearly a simplification, the work of managers can be usefully classified as planning, directing and motivating, and controlling. All of these activities involve making decisions. D.
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