Scribd Logo
Upload

Welcome to Scribd!

  • Introduction To Management Accounting

    Uploaded by

    Meizhi Lim
    53 views2 pages
    This document provides an introduction to cost terms and accounting information for management and financial accounting. It discusses the users of accounting information including managers, shareholders, employees, creditors, and government entities. It then compares management and financial accounting, noting that management accounting is optional and focuses on parts of the business to aid decision making, while financial accounting is required by law and provides uniform annual reports on the entire business. Finally, it outlines the decision making process of identifying objectives such as maximizing future profits.

    Original Description:

    Users of Management accounting, Differences between Financial VS Management Accounting etc

    Original Title

    Introduction to Management Accounting

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document provides an introduction to cost terms and accounting information for management and financial accounting. It discusses the users of accounting information including managers, shareholders, employees, creditors, and government entities. It then compares management and financial accounting, noting that management accounting is optional and focuses on parts of the business to aid decision making, while financial accounting is required by law and provides uniform annual reports on the entire business. Finally, it outlines the decision making process of identifying objectives such as maximizing future profits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    53 views2 pages

    Introduction To Management Accounting

    Uploaded by

    Meizhi Lim
    This document provides an introduction to cost terms and accounting information for management and financial accounting. It discusses the users of accounting information including managers, shareholders, employees, creditors, and government entities. It then compares management and financial accounting, noting that management accounting is optional and focuses on parts of the business to aid decision making, while financial accounting is required by law and provides uniform annual reports on the entire business. Finally, it outlines the decision making process of identifying objectives such as maximizing future profits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 2

    WEEK 1: INTRODUCTION; COST TERMS

    1.USERS OF ACCOUNTING INFORMATION:


    Stakeholders who have interest in organization:
    i. Managers: help in decision-making & control activities
    Eg: information needed on estimated selling prices, costs, demand, competitive
    position & profitability of products/services
    ii. Shareholders: value of investment & income that derived from their shareholding
    iii. Employees: ability of firm to meet wage demands & avoid redundancies
    iv. Creditors & providers of loan capital: firms ability to meet financial obligations
    v. Government (such as Central Statistical office): details of sales activity, profits,
    investments, stocks (inventories), div pd, proportion of profits absorbed by tax
    vi. Government taxation authorities: amount of profits subj to tax

    2.DIFFERENCE BETWEEN MANAGEMENT VS FINANCIAL ACCOUNTING


    MANAGEMENT
    ASPECTS
    FINANCIAL
    entirely optional & info
    statutory requirement for
    should be produced only
    public limited companies
    LEGAL
    REQUIREMENTS
    if its considered that
    to produce annual
    benefits offer
    financial accounts
    management exceed
    cost of collecting it
    Yes. Focuses on small
    No. Describe the whole
    parts of organization
    of business
    FOCUS ON INDIVIDUAL
    Eg: cost & profitability of
    PARTS OF BUSINESS
    products, services,
    departments, customers
    & activities)
    Not required to adhere to
    Conform with legal
    accounting principles
    requirements
    Focus is serving
    Ensure uniformity &
    ACCOUNTING PRINCIPLES
    managements need &
    consistency which make
    providing information
    intercompany & historical
    useful to managers in
    comparison possible
    decision-making,
    Data should be verifiable
    planning & control
    & objective

    Concerned with future &


    past information
    Decisions concern with
    future events
    Require details of
    expected future costs &
    revenues
    Requires information
    more quickly
    Prepared at daily, weekly
    or monthly intervals

    Report what had


    happened in the past

    Detailed set of financial


    accounts published
    annually & less detailed
    semi annually

    TIME DIMENSION

    REPORT FREQUENCY

    3. DECISION-MAKING PROCESS
    1. IDENTIFY OBJECTIVES

    firm seek to max future profits


    reasons to focus on this obj:
    1. Unlikely other obj is as widely
    applicable in measuring ability of
    organization to survive in future
    unlikely

    You might also like