Chapter 14 text - Chapter 14 Managerial accounting focuses...

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Chapter 14 Managerial accounting focuses primarily on the preparation of reports for internal users of financial information, such as the managers and officers of a company. In today's rapidly changing global environment, managers often make decisions that determine their company's fate—and their own. Managers are evaluated on the results of their decisions. Managerial Accounting Basics Managerial accounting , also called management accounting , is a field of accounting that provides economic and financial information for managers and other internal users. Managerial accounting applies to all types of businesses—service, merchandising, and manufacturing. It also applies to all forms of business organizations— proprietorships, partnerships, and corporations. Not-for-profit entities as well as profit-oriented enterprises need managerial accounting. In the past, managerial accountants were primarily engaged in cost accounting— collecting and reporting costs to management. Recently that role has changed significantly. As a result, managerial accountants now serve as team members alongside personnel from production, marketing, and engineering when the company makes critical strategic decisions. Opportunities for managerial accountants to advance within the company are considerable (besar). Financial executives must have a background that includes an understanding of managerial accounting concepts. Whatever your position in the company— marketing, sales, or production, knowledge of managerial accounting greatly improves your opportunities for advancement (kemajuan). COMPARING MANAGERIAL AND FINANCIAL ACCOUNTING There are both similarities and differences between managerial and financial accounting. First, each field of accounting deals with the economic events of a business. Thus, their interests overlap. For example, determining the unit cost of manufacturing a product is part of managerial accounting. Reporting the total cost of goods manufactured and sold is part of financial accounting. In addition, both managerial and financial accountings require that a company's economic events be quantified and communicated to interested parties. Differences between financial and managerial accounting MANAGEMENT FUNCTIONS Managers' activities and responsibilities can be classified into three broad functions: 1. Planning. 2. Directing. 3. Controlling. Planning requires managers to look ahead and to establish objectives: maximizing short-term profits and market share, maintaining a commitment to environmental protection, and contributing to social programs. For example is reducing its prices to compete with others. A key objective of management is to add value to the business under its control. Value is usually measured by the trading price of the company's stock and by the potential selling price of the company.
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Directing involves coordinating a company's diverse activities and human resources to produce a smooth-running operation. This function relates to implementing planned objectives and providing necessary incentives to motivate employees. For example,
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This note was uploaded on 11/06/2011 for the course ACCOUNTING ac 202 taught by Professor - during the Fall '11 term at Montgomery.

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Chapter 14 text - Chapter 14 Managerial accounting focuses...

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