Introduction to management accounting. Welcome to the world of management accounting! In this introductory chapter, we examine the role of management. Introduction to Management Accounting. Introduction. Managerial accounting may be regarded as a body of knowledge that is concerned with concepts and. Financial accounting is a useful tool to management and to external users such replacement of assets, introduction of new products, discontinuation of.
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Chapter 1 Introduction to Management Accounting and Cost Accounting. Joana: Another component of this decision will be more difficult to. introduction to management accounting () nature and scope of management accounting definition of management accounting: wilson and chua “. Contents. 1 Introduction. 1 Comparison of management accounting and financial accounting.  “Definition of Management Accounting” (PDF).
Which of the following statements is NOT true about world-class firms?
World-class firms are firms that are poor in customer support. World-class firms know their market and their products. World-class firms strive continually to improve product design, manufacture, and delivery. World-class firms can compete with the best of the best in a global environment.
Monitoring the number of defects produced is an example of the management function of a. The setting of objectives and the identification of methods to achieve those objectives is called a.
Comparing actual quality costs with planned quality costs is an example of a. Performance reports are accounting reports that compare a. Which of the following statements correctly distinguishes between financial and management accounting? Management accounting reports on the whole organization. Financial accounting is oriented toward the future. Financial accounting is primarily concerned with providing information for internal users. Management accounting is oriented more toward the planning and control aspects of management.
Setting the company's profit targets for the upcoming year is an example of the management function of a. Setting the selling price of a company's product is an example of a. Developing a company strategy for responding to anticipated new markets is an example of a. The planning process includes a. Investigating production variances and adjusting the production process is an example of a.
Evaluating the performance of a segment of the company is an example of a. Determining the bid your company should submit on a construction contract is an example of a.
The formulation of a scheme or program for the accomplishment of a specific purpose or goal is referred to as a. In a performance report, a. The monitoring of a plan's implementation is called a. Inspecting units produced to determine if they meet specifications is an example of a.
Continuous improvement is NOT a. Principles of personal ethical behaviour that are essential to an ethical life include a. Which one of the following statements about ethical behaviour is true?
Ethical behaviour is not guided by well-defined rules and is often subjective. Ethical behaviour is best described as doing actions that are permitted by law. Ethical behaviour always involves choosing between actions that are clearly right or wrong. Ethical behaviour is best guided by a policy of placing corporate performance above individual ends. The standards of ethical conduct for management accountants include a.
In resolving an ethical conflict, which of the following would never be appropriate? Management accounting is concerned with which kind of decision? One advantage of employee empowerment is a. The value chain includes which of the following activities?
Relationships among activities that are performed within a firm's portion of the industrial value chain are a. Breakthroughs in technology this century have given rise to which one of the following effects? The overall objective of accounting information systems is to a. Which of the following costs would be included in value-chain product costs? Classify the activity of handling raw materials according to its value-chain category.
Management accounting: a. Financial accounting information is least useful in providing: a. Management accounting is primarily concerned with: a. To compete on the basis if price, the seller must carefully manage: a. World-class companies must continuously struggle to improve performance in the dimensions of: a. Which of the following statements most accurately describes an effect of employee empowerment?
Employee empowerment reduces the cost of implementing decisions. Employee empowerment decreases the speed in which decisions are made. Employee empowerment leads to an increased number of corporate staff positions d.
Employee empowerment places greater emphasis on decisions made by upper management. Briefly discuss the differences between financial and management accounting. ANS: Management accounting differs from financial accounting in the following major ways: 1 an internal focus, 2 emphasis on the future, 3 freedom from GAAP and other mandatory rules, 4 multidisciplinary and broader in scope, 5 evaluates individual segments within the firm, and 6 provides more detailed information.
PTS: 1 2. Identify and discuss the emerging themes that are affecting the way cost accounting is practiced. ANS: Seven emerging themes affecting cost element accounting are as follows: customer orientation, total quality management, time as a competitive factor, advances in information technology, advances in the manufacturing environment, service industry growth, and global competition. Customer orientation, total quality management, and time as a competitive factor require the accountant to create and track nonfinancial measures of customer satisfaction such as quality improvement and responsiveness.
Advances in information technology have led to the creation of relationship databases that allow a variety of users to develop their own reports based on their particular needs. Advances in the manufacturing environment are characterized by activity-based costing and the emergence of the JIT philosophy. Service industry growth has led to the need for increased management accounting information to improve productivity and quality.
Finally, global competition means that companies are now competing with the best of the best. Hence, we can say that efficiency of a concern can increase using accounting information. Decisions are taken only by top management using information provided by management accountant as classified in a manner which is useful in decision making. Decision making does not come under preview of accountant, it is only the top management, who can take decision.
Thus, decision of an organization depends on caliber and efficiency of the management. Management accountant helps management in future planning and forecasting using historical accounting data. In the process of planning and formulating policies, a management accountant provides necessary and relevant information to achieve the targets of the company.
Management accounting uses regression analysis and time series analysis as forecasting techniques. In order to assure effective control, various techniques are used by a management accountant such as budgetary control, standard costing, management audit, etc. Management accounting provides a proper managerial control system to the management.
Reports are provided to the management regarding the effective and efficient use of resources. Collecting accounting data and analyzing the same is a key role of management accounting.
Management accounting provides relevant information in a systematic way that can be used by the management in planning and decision-making. Cash flow, fund flow, ratio analysis, trend analysis, and comparative financial statements are the tools normally used in management accounting to interpret and analyze accounting data.
Management accounting provides a selection of best alternative methods of doing things. It motivates employees to improve their performance by setting targets and starting incentive schemes.
Success of any organization depends upon accurate decision-making and effective decision-making is based on informational network as provided by management accounting. Key costing terminology is introduced. Students will learn about product versus period costs. Unique issues related to manufacturers are discussed. Raw materials, work in process, cost of goods manufactured and cost of goods sold are also presented.
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