SUMMARY MANAGEMENT ACCOUNTING
MANAGERIAL ACCOUNTING
Managerial accounting provides economic and financial information for managers and other internal users.
DIFFERENCE BETWEEN MANAGERIAL AND FINANCIAL ACCOUNTING
Financial = external users according to GAAP
Managerial = internal users (in order to follow up a status of a project, in order to take some decisions)
MANAGEMENT FUNCTIONS
Planning:
- Maximize short-term profit and market share.
- Commit to environmental protection and social programs.
- Add value to the business.
Directing:
- Coordinate diverse activities and human resources.
- Implement planned objectives.
1
, - Provide incentives to motivate employees.
- Hire and train employees.
- Produce a smooth-running operation.
Controlling:
- Keeping activities on track.
- Determine whether goals are met.
- Decide changes needed to get back on track.
- May use an informal or formal system of evaluations.
ORGANIZATION CHART
Organization charts show the interrelationships of activities and the delegation of authority and
responsibility within the company.
2
, 1. Managerial accountants have a single role within an organization, collecting and reporting costs to
management. FALSE
2. Financial accounting reports are general-purpose and intended for external users. TRUE
3. Managerial accounting reports are special-purpose and issued as frequently as needed. TRUE
4. Managers’ activities and responsibilities can be classified into three broad functions: cost accounting,
budgeting, and internal control. FALSE
5. Managerial accounting reports must now comply with generally accepted accounting principles
(GAAP). FALSE
MANUFACTURING COSTS
Manufacturing consists of activities and processes that convert raw materials into finished goods.
Raw materials: Basic materials and parts used in manufacturing process.
Direct materials: Raw materials that can be physically and directly associated with the finished product during
the manufacturing process.
Indirect materials: considered as part of manufacturing overhead
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MANAGERIAL ACCOUNTING
Managerial accounting provides economic and financial information for managers and other internal users.
DIFFERENCE BETWEEN MANAGERIAL AND FINANCIAL ACCOUNTING
Financial = external users according to GAAP
Managerial = internal users (in order to follow up a status of a project, in order to take some decisions)
MANAGEMENT FUNCTIONS
Planning:
- Maximize short-term profit and market share.
- Commit to environmental protection and social programs.
- Add value to the business.
Directing:
- Coordinate diverse activities and human resources.
- Implement planned objectives.
1
, - Provide incentives to motivate employees.
- Hire and train employees.
- Produce a smooth-running operation.
Controlling:
- Keeping activities on track.
- Determine whether goals are met.
- Decide changes needed to get back on track.
- May use an informal or formal system of evaluations.
ORGANIZATION CHART
Organization charts show the interrelationships of activities and the delegation of authority and
responsibility within the company.
2
, 1. Managerial accountants have a single role within an organization, collecting and reporting costs to
management. FALSE
2. Financial accounting reports are general-purpose and intended for external users. TRUE
3. Managerial accounting reports are special-purpose and issued as frequently as needed. TRUE
4. Managers’ activities and responsibilities can be classified into three broad functions: cost accounting,
budgeting, and internal control. FALSE
5. Managerial accounting reports must now comply with generally accepted accounting principles
(GAAP). FALSE
MANUFACTURING COSTS
Manufacturing consists of activities and processes that convert raw materials into finished goods.
Raw materials: Basic materials and parts used in manufacturing process.
Direct materials: Raw materials that can be physically and directly associated with the finished product during
the manufacturing process.
Indirect materials: considered as part of manufacturing overhead
3
