Chapter 1 - The Manager and Management Accounting
The Manager and Management
Accounting
Copyright © 2015 Pearson Education, Inc. All Rights Reserved
1.
2.
3.
Distinguish financial accounting from management accounting
Understand how management accountants help firms make strategic decisions Describe the set of business functions in the value chain and identify the dimensions of performance that customers are expecting of companies
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-2
4.
5.
6.
7.
Explain the five-step decision-making process and its role in management accounting Describe three guidelines management accountants follow in supporting managers
Understand how management accounting fits into an organization’s structure Understand what professional ethics mean to management accountants
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-3
Management accounting—measures, analyzes, and reports financial and nonfinancial information to help managers make decisions to fulfill organizational goals. Management accounting need not be GAAP compliant.
Financial accounting—focuses on reporting to external users including investors, creditors, banks, suppliers, and governmental agencies. Financial statements must be based on GAAP.
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-4
Cost accounting – measures, analyzes and reports financial and nonfinancial information related to the costs of acquiring or using resources in an organization.
Today, most accounting professionals take the position that cost information is part of management accounting; therefore, the distinction between the two is not clear-cut and in this book, we often use the terms interchangeably.
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-5
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-6
Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace.
There are two broad strategies:
Accounting
Copyright © 2015 Pearson Education, Inc. All Rights Reserved
1.
2.
3.
Distinguish financial accounting from management accounting
Understand how management accountants help firms make strategic decisions Describe the set of business functions in the value chain and identify the dimensions of performance that customers are expecting of companies
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-2
4.
5.
6.
7.
Explain the five-step decision-making process and its role in management accounting Describe three guidelines management accountants follow in supporting managers
Understand how management accounting fits into an organization’s structure Understand what professional ethics mean to management accountants
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-3
Management accounting—measures, analyzes, and reports financial and nonfinancial information to help managers make decisions to fulfill organizational goals. Management accounting need not be GAAP compliant.
Financial accounting—focuses on reporting to external users including investors, creditors, banks, suppliers, and governmental agencies. Financial statements must be based on GAAP.
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-4
Cost accounting – measures, analyzes and reports financial and nonfinancial information related to the costs of acquiring or using resources in an organization.
Today, most accounting professionals take the position that cost information is part of management accounting; therefore, the distinction between the two is not clear-cut and in this book, we often use the terms interchangeably.
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-5
Copyright © 2015 Pearson Education, Inc. All Rights Reserved.
1-6
Strategy specifies how an organization matches its own capabilities with the opportunities in the marketplace.
There are two broad strategies: