Chapter 1_2011BB

Chapter 1_2011BB - CHAPTER 1 Chapter Outline Accounting...

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CHAPTER 1
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Chapter Outline Accounting Management accounting Cost, concepts and classifications Product costing Corporate governance & ethics
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Accounting Information Users Categories
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Accounting Accounting System (accumulates financial and managerial accounting data) Managerial Accounting Information for decision making, and control of an organization’s operations. Financial Accounting Published financial statements and other financial reports. Internal Users External Users
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Differences Between Financial and Managerial Accounting Financial Managerial Accounting Accounting 1. Users External persons who Managers who plan for make financial decisions and control an organization 2. Time focus Historical perspective Future emphasis 3. Verifiability Emphasis on Emphasis on relevance versus relevance verifiability for planning and control 4. Precision versus Emphasis on Emphasis on timeliness precision timeliness 5. Subject Primary focus is on Focuses on segments the whole organization of an organization 6. Regulation Must follow GAAP Need not follow GAAP and prescribed formats or any prescribed format Exhibits 1-1 & 1-2 Demo 1-1B
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Management Accounting It is the process of identifying, measuring, accumulating, analyzing, preparing, interpreting, and communicating information that managers use to fulfill organizational objectives. What is Management Accounting?
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Managing Resources, Activities, and People An organization . . . Acquires Resources Hires People Organized set of activities Decision Making Planning Directing Controlling
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Process of Management Decision Making Directing Control Planning Managers need cost information to perform each of these functions.
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Management Accounting Considerations 1. Value-Added Principle 2. Behavioral Implications
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A cost is a sacrifice or giving up of resources for a particular purpose. Cost There are different costs for different purposes. Costs that are appropriate for one use being totally inappropriate for others.
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Cost Classifications Purpose Product vs. Period Chapter 1 Timing Upstream vs. Downstream Chapter 1 Behavior Variable vs. Fixed Chapters 2 & 3 Traceability Direct vs. Indirect Chapters 4 & 5 Traceability Prime vs. Conversion
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This note was uploaded on 02/22/2012 for the course BUAD 2050 taught by Professor Nicholasw.schroeder during the Spring '09 term at Toledo.

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Chapter 1_2011BB - CHAPTER 1 Chapter Outline Accounting...

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