Resume
Managerial Accounting Summary VUB
- Établissement
- Vrije Universiteit Brussel (VUB)
Summary of Managerial Accounting for BA2 Business Economics at the VUB. Well structured summary without inessential information.
[Montrer plus]
Vendeur
S'abonner
Aperçu du contenu
Frédéric Kröger Managerial Accounting – SummaryManagerial Accounting – Summary
❖ Managerial Accounting, The Business Organization, and Professional Ethics (Chap 1)
o FINANCIAL ACCOUNTING vs MANAGEMENT ACCOUNTING
o Financial Accounting
➔ Branch of accounting developing information for external decision makers
(E.g. governments, stockholders, banks, suppliers, …)
▪ Composed of 4 financial statements
• Income statement
• Balance sheet
• Statement of cash flows
• Equity
▪ Differences :
• Focus and time dimension
▪ Primarily provides summaries of past financial transactions
• Rules and Restrictions
▪ Financial Accounting statements must follow Generally Accepted
Accounting Principles (GAAP)
• Scope of information
▪ Prepared primarily on company as a whole
o Management Accounting
➔ Branch of accounting developing information for managers within the org
▪ Helps managers to use financial information to make good decisions
▪ Differences :
• Focus and time dimension
▪ Planning in such important part of managers jobs, so strong future
orientation
• Rules and Restrictions
▪ Not required to follow GAAP
• Scope of information
▪ Prepared on parts of the company, often on a daily or weekly basis
o ROLES OF ACCOUNTING INFORMATION
o 2 Basic purposes of accounting information
▪ Help with decision making
▪ Help with planning and controlling
• Planning ➔ Setting objectives and defining how reach them
• Controlling ➔ Implementing plans and evaluating results
o Org. addresses 2 purposes by designing + implementing accounting systems
▪ Accounting System ➔ Formal mechanism for gathering, organizing, and
communicating info. about and org.’s activities
▪ But what types of accounting info. do managers need ?
• For decision making → Accounting info. helps answer :
▪ problem-solving questions
▪ Problem solving ➔ Analysis of possible courses of action
• For performance evaluation and control → Accounting helps answer :
▪ Scorecard questions (Ex. Is company doing well or poorly)
▪ Scorekeeping ➔ Accumulation, classification, and reporting of data
that helps user understand and evaluate performance
▪ Attention-directing questions (Ex. Which areas require more investigation)
▪ Attention directing ➔ Reporting and interpreting info. that helps
managers to focus on operating problems, imperfections,
inefficiencies, and opportunities
1
,Frédéric Kröger Managerial Accounting – Summary
o MANAGING BY EXCEPTION
▪ Accounting systems (AS) formalize plans by expressing them as budgets and
produce performance reports
• Budget ➔ Quantitative expression of a plan of action and an aid to
coordinating and implementing plans
• Performance reports ➔ Provide feedback by comparing results with plans
and by highlighting variances (deviations from plans)
o Management by exception ➔ Concentrating more on areas that deviate from the
plan and less on areas that conform with plans and are presumed to be running
smoothly
o COST-BENEFIT AND BEHAVIORAL CONSIDERATIONS OF AIS
o Managers should keep 2 important ideas in mind when designing AIS
1. Cost-benefit balance
➔ Weighing estimated costs against probable benefits, the primary
consideration in choosing among AS and methods
2. Behavioral implications
➔ System’s effect on the behavior, specifically the decisions, of managers
o PLANNING AND CONTROL FOR PRODUCT LIFE CYCLES AND THE VALUE CHAIN
o To effectively plan and control prod of GaS, accountants and managers must
consider the product’s life cycle
▪ Product life cycle ➔ Various stages through which a product passes, from
conception and development to introduction into the market to maturation
and, finally, withdrawal from the market
▪ At each stage, managers face differing costs and potential returns
o In addition to considering a product’s life cycle, managers must recognize those
activities necessary for a company to create the GaS that is sells
▪ These activities comprise the value chain
▪ Value chain ➔ Set of business functions or activities that add value to the
products or services of an org.
• Not all functions are of equal importance to the success of company
• Senior management must decide which functions enable the company to
gain and maintain a competitive edge
2
,Frédéric Kröger Managerial Accounting – Summary
o BASIC ORGANIZATIONAL STRUCTURE
▪ Line managers ➔ Directly involved with making and selling the org. GaS
▪ Staff positions ➔ Advisory, they support line managers
o ACCOUNTING’S POSITION IN THE ORGANIZATION
▪ 4 work activities of management accountants are (today spending more time
on last two) :
• Collecting and compiling information
• Preparing standardized reports
• Interpreting and analyzing information
• Being involved in decision making
o The CFO is the top executive who deals with all finance and accounting issues in org.
▪ Both the treasurer and the controller generally report to the CFO
• Controller (comptroller) ➔ Concerned mainly with operating matters,
such as aiding management decision making
• Treasurer ➔ Concerned mainly with company’s financial matters such as
raising and managing cash
o EXPANDING AND CHANGING ROLE OF MANAGEMENT ACCOUNTING
o Management Accounting has roots in industrial revolution (19th)
o 4 major business trends that are influencing management accounting today
▪ Shift from manufacturing-based to a service-based economy in the United
States
▪ Increased global competition
▪ Advances in technology
▪ Changes in business process management
o PROFESSIONAL AND BUSINESS ETHICS
o Need for accountants to maintain a high ethical conduct will never change
▪ Maintain their professional competence
▪ Preserve the confidentiality of information
▪ Act with integrity and credibility
3
, Frédéric Kröger Managerial Accounting – Summary
❖ Introduction to Cost Terms, Concepts and Classifications (Chap 2)
o GENERAL COST CLASSIFICATIONS
o Purpose of cost classification (not mutually exclusive)
▪ Preparing external financial statements
• Manufacturing costs (product costs) (inventoriable)
▪ Direct materials (DM) ➔ Raw materials converted into finished product
and whose costs are easily traced to finish product
First way of ▪ Direct labor (DL) ➔ Cost of wages and salaries of employees converting
classifying costs
raw materials into finished goods (direct cost easily traced to finished
product)
▪ Manufacturing overhead (OH) ➔ Manufacturing costs that cannot be
easily and cost-effectively traced to a finished product
▪ Includes all manufacturing costs except DM and DL
▪ Also called Factory Overhead or Indirect Manufacturing Costs
• Nonmanufacturing costs (period costs) (expensed)
▪ Selling costs
▪ Administrative costs
• Prime costs ➔ Combine direct costs of DM and DL
Second way of Primary costs in a labor-intensive manufacturing process
classifying costs • Conversion costs ➔ Combine DL with OH
Primary costs in a machine-intensive manufacturing process
▪ Making decisions
• Differential cost and revenue ➔ Differs between alternatives
• Sunk cost ➔ Past cost not affected by a decision
• Opportunity cost ➔ Forgone benefit
▪ Predicting cost behavior in response to changes in activity
• Variable cost ➔ Proportional to activity
• Fixed cost ➔ Constant in total
▪ Assigning costs to cost objects such as departments or products
• Direct cost ➔ Can be easily traced
• Indirect cost ➔ Cannot be easily traced
o 3 kind of companies
▪ Service company ➔ Company selling services (time, skills, knowledge)
▪ Merchandising company ➔ Reselling products bought from suppliers
▪ Manufacturing company ➔ Company uses labor, equipment, supplies, and
facilities to convert raw materials into other goods
o The matching principle
▪ Principle need to understand to use the Product/Period classification
➔ Costs should be recognized as expenses in the same period in which the
related revenues are recognized
o COST CLASSIFICATIONS ON FINANCIAL STATEMENTS
o Inventories on the B/S
▪ Different inventories
• Merchandising inventory ➔ Goods purchased from suppliers that are
awaiting resale to customers
• Raw material inventory ➔ Materials waiting to be processed
• Work-in-Process inventory (WOP) ➔ Partially complete products,
some material, labour or overhead has been added
• Finished goods inventory ➔ Completed products awaiting sale
▪ Different kind of companies use different inventories
• Service company → No inventory (sell their time)
acc. ➔ Number of
accounts on B/S • Merchandising company → Merchandise inventory (1 acc.)
• Manufacturing company → Raw material, WOP, finished goods (3 acc.)
4
Les avantages d'acheter des résumés chez Stuvia:
Qualité garantie par les avis des clients
Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.
L’achat facile et rapide
Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.
Focus sur l’essentiel
Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.
Foire aux questions
Qu'est-ce que j'obtiens en achetant ce document ?
Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.
Garantie de remboursement : comment ça marche ?
Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.
Auprès de qui est-ce que j'achète ce résumé ?
Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur frdrickrger. Stuvia facilite les paiements au vendeur.
Est-ce que j'aurai un abonnement?
Non, vous n'achetez ce résumé que pour €4,98. Vous n'êtes lié à rien après votre achat.
Peut-on faire confiance à Stuvia ?
4.6 étoiles sur Google & Trustpilot (+1000 avis)
56326 résumés ont été vendus ces 30 derniers jours
Fondée en 2010, la référence pour acheter des résumés depuis déjà 14 ans