Managerial Accounting Exam

Managerial Accounting Exam -...

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Managerial Accounting Exam #1 Study Guide Chapter 1 Planning Setting goals and objectives and how to achieve them Ex: reduce labor costs by reducing store hours Budgets Directing Overseeing company’s day to day operations Ex: using daily/weekly sales reports to adjust marketing strategies Controlling Evaluating results of operations against plans and making adjustments as  needed Ex: comparing budgeted sales with actual sales to take corrective actions Decision Making Management is continually making decisions while it plans, directs, and controls Ex: price setting or product offerings Managerial vs. Financial Accounting Managerial Accounting - Primary Users: internal - Purpose of information: plan, direct, control, decide - Primary accounting product: internal reports useful to management - What is included?: defined by management - Underlying basis of information: internal and external transactions, focus on  future - Emphasis: data must be relevant - Business Unit: segments of the business - Preparation: depends on management needs - Verification: internal audit - Information requirements: no requirement
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- Impact of employee behavior: careful consideration Financial Accounting - Primary Users: external - Purpose of information: users make investing and lending decisions - Primary accounting product: general purpose financial statements - What is included?: determined by GAAP - Underlying basis: based on historical transactions with external parties - Emphasis: data must be reliable and objective - Business unit: company as a whole - Preparation: annually and quarterly - Verification: external audit - Information requirements: SEC requires publicly traded companies to issue  audited financial statements - Impact on employee behavior: adequacy of disclosure Summary of Institute of Management Accountants (IMA) Standards Competence Confidentiality Integrity Credibility Regulatory and Business Issues Sarbanes-Oxley Act of 2002 (SOX) - restore trust in publically traded corporations, management, financial  statements, and auditors - CEO/CFO requirements 1. Financial statements 2. Internal control structure 3. Annual assessment  - Independent audit committee - Increases white-collar crime penalties International Financial Reporting Standards (IFRS) - Results of globalizations 1. Consistent reporting standards needed worldwide 2. SEC is studying IRFS Extensible Business Reporting Language (XBRL)
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- Standardized tagging system for financial reports - Advantages: 1. Decreases retrieval time 2. Decreases conversion time 3. Facilitates comparisons 4. Customizes information Shifting economy - Shift away from manufacturing toward service - Managerial accounting has expanded
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Managerial Accounting Exam -...

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