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48 Cards in this Set
- Front
- Back
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Management Accountability
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Manager's responsibility to the various stakeholders of the company
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5 stakeholders Managers are accountable to
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Creditors
Customers Government Owners Suppliers |
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(Operating Activities)What management is accountable for towards Suppliers
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(Operating Activities)Management is accountable to them for using goods and services to earn a provide
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(Operating Activities) What management is accountable for towards employees
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(Operating Activities)Management is accountable for providing them with a safe and productive work environment
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(Operating Activities)What management is accountable for towards Customers
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(Operating Activities)Management is accountable to them for providing products & services at a reasonable price.
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(Investing Activities) What management is accountable for towards Suppliers
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(Investing Activities) Management is accountable to them for purchasing the most productive assets
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(Financing Activities)
What management is accountable for towards the owner. |
(Financing Activities) Management is accountable to them for providing a return on the owner's investment.
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(Financing Activities)
What management is accountable for towards the creditors |
(Financing Activities) Management is accountable to them for repaying principal and interest.
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(Actions that affect society)
What management is accountable for towards the Government |
(Actions that affect society)
Management is accountable to them for obeying laws and paying taxes |
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Actions that affect society)
What management is accountable for towards communities |
(Actions that affect society)
Management is accountable to them for providing jobs and operating in an ethical to support the community. |
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Financial Accounting (3)
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Management Accounting (2)
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Management Accounting Primary Users
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*Primary users =Internal – the company’s managers.
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Financial Accounting Primary Users
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* Primary Users = External – investors and
creditors |
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Purposes of information for Management Accounting
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Purpose of Information = Help managers plan and
control operations |
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Purposes of information for Financial Accounting
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Purpose of Information =Help with investment and
credit decisions |
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Focus and time dimension of Management Accounting
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Focus and time dimension = Relevance of information;
focus on the future |
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Focus and time dimension of Financial Accounting
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Focus and time dimension = Relevance and reliability
of information; focus on the past |
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Type of report for Management Accounting
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Type of report =
Internal reports No audit needed |
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Type of report for Financial Accounting
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Type of Report =
*Financial statements prescribed by GAAP *Audit by CPAs |
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Scope of information for Managment Accounting
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Scope of information = Detailed reports on a weekly
or daily basis |
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Scope of information for Financial Accounting
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Scope of information =
Summarized reports quarterly and/or annually |
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Behavioral concern for managment accounting
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Behavioral concern = Concern about how reports
affect employee behavior |
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Behavioral concern for financial accounting
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Behavioral concern = Concern about adequate
disclosure |
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4 facts about today's business trends
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3 examples of time based competition
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◦ Advanced information systems
◦ E-Commerce ◦ Just-in-Time management |
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3 facts about service companies
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facts about Merchandising Companies
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2 facts about Product Costs
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*Part of the inventory
*Expensed when sold |
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2 facts about period costs
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* Not part of the inventory
* Expensed when incurred |
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3 kinds of inventory for manufacturing companies
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* Materials Inventory
* Work in process inventory * Finished Goods inventory |
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What manufacturing companies use to convert
raw materials into finished products |
Use labor, plant, supplies and facilities to convert
raw materials into finished products |
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Cost object
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Anything for which managers want a
separate measurement of cost Examples: a product, department or activity |
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3 facts about Direct costs
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3 facts about indirect costs
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Direct Materials
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Become a physical part of teh finished product.
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Direct Labor
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Wages of employees who convert materials into the companies finished product.
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Manufacturing Overhead
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All other costs other than direct materials and direct labor.
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3 facts about Manufacturing overhead
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Includes only indirect costs related to
manufacturing ◦ Does NOT include costs for selling, general or administrative functions |
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Other Manufacturing Overhead costs
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Other costs related to the manufacturing facility
and plant assets ◦ Repairs & maintenance ◦ Utilities ◦ Rent & insurance ◦ Property taxes ◦ Depreciation |
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Service Company inventoriable costs
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No Inventoriable product costs
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Service Company Period costs
(Expenses) |
Period costs (Expenses) = Salaries, depreciation, utilities, advertising, insurance, property
taxes |
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Merchandising
company inventoriable costs |
inventoriable costs = Purchases plus freight in
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Merchandising
company period costs (expenses) |
Period costs (Expenses) = Salaries, depreciation,
utilities, advertising, insurance, property taxes and delivery expense |
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Manufacturing
company inventoriable costs |
Inventoriable costs = Direct materials, Direct
labor and manufacturing overhead |
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Manufacturing Period Costs
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Period Costs = Office salaries,
depreciation, utilities, advertising, insurance, property taxes on office, selling expenses |
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Institute of Management Accountants (IMA)
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developed standards to help meet ethical
challenges |
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Ethical Standards requirements (4)
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Requires:
◦ Competence ◦ Confidentiality ◦ Integrity ◦ Objectivity |
