Book Outline

Book Outline - Chapter 1: Managerial Accounting 29/08/2010...

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Unformatted text preview: Chapter 1: Managerial Accounting 29/08/2010 16:22:00 Managerial Accounting Basics Field of accounting that provides economic and financial information for managers and other internal users Comparing Managerial Accounting and Financial Accounting Financial Accounti ng Managerial Accounting External users: stockholders, creditors, regulators Primary Users of Reports Internal users: officers and managers Financial Statements Quarterly and Annually Type and Frequenc y of Reports Internal reports As frequently as needed General-purpose Purpose of Reports Special-purpose for specific decisions Pertains to business as a whole Highly aggregated Limited to double-entry accounting and cost data GAAP Content of Reports Pertains to subunits of the business Very detailed Extends beyond double- entry accounting to any relevant data Standard is relevance to decisions Audit by CPA Verificati on Process No independence audits Management Functions o Planning o Directing o Controlling Organizational Structure o Stockholders own the company o The board of directors manages it on their behalf o CEO has overall responsibility for managing the business o Types of Employees Line positions directly involved in the companys primary revenue-generating operating activities VPs, plant managers, supervisors, production personnel Staff positions involved in activities that support the efforts of the line employees Finance, legal, HR o Controller reports to the CFO, maintains the accounting records, maintains an adequate system of internal control, and prepares financial statements, tax returns, and internal reports Business Ethics o Sarbanes-Oxley Act of 2002 (SOX) legislation enacted to help prevent lapses in internal control; clarified top managements responsibility for the companys financial statements Managerial Cost Concepts Manufacturing Costs o Direct Materials raw materials that can be physically and directly associated with the finished product o Indirect materials do not physically become part of the finished product or they cannot be traced because their physical association with the finished product is too small in terms of cost Account for indirect materials as a part of manufacturing overhead o direct labor the work of factory employees that can be physically and directly associated with converting raw material into finished goods o Indirect labor refers to the work of employees that has no physical connection with the finished product o Manufacturing Overhead costs that are indirectly associated with...
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This document was uploaded on 11/04/2011 for the course BUSI 101 at UNC.

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Book Outline - Chapter 1: Managerial Accounting 29/08/2010...

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