ch1 - Chapter1:TheManagerandManagementAccounting...

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Chapter 1: The Manager and Management Accounting  What is managerial accounting? Management Cost [more narrow in concept; bus basically the same as managerial] Other Accounting: Financial Accounting Tax [determines tax liability to government] Financial Accounting  Designed to help people OUTSIDE the company make decisions o Creditors, suppliers, investors, customers, government agencies, labor  unions, etc. Purpose of Financial Accounting: Statements o Income Statement  o Balance Sheet o Statement of Cash Flows o Statement of Owner’s Equity Financial Accounting Rules  o GAAP o Auditors for public companies Statement Period: o Yearly or Quarterly  Management Accounting Designed to help people INSIDE the business make decisions The goal of management accounting is to provide an information system that  enables people inside an organization to: o Make informed decisions o Be more effective at their jobs o Improve the organization’s performance It’s the coolest thing: No rules to follow! Reports may be hourly, daily or monthly
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Cost Accounting Provides information about all types of costs organization goals] Can be used in Financial [calculating cost of ending inventory] and Managerial  Accounting [choose which products to produce internally or outsource] Management, Managerial, Cost: What the difference?  o They are all the same. Used interchangeably. Cost accounting is used  mainly for managerial accounting decision making Tax Accounting Most people think of taxes when they think of Accounting Tax Accounting helps us determine how much is owed to the government for  taxes Rules regarding taxes are set by IRS.
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This note was uploaded on 04/06/2012 for the course ACCT 272 taught by Professor Mensah during the Spring '08 term at Rutgers.

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ch1 - Chapter1:TheManagerandManagementAccounting...

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