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Chapter 1 Maf 320
Chapter 1 Maf 320
Chapter 1 Maf 320
DEFINITION
COST ACCOUNTING : The establishment of budgets, standards costs and actual costs of operation, process, activities or products and the analysis of variances, profitability or the social use of funds. FINANCIAL ACCOUNTING : The classification and recording of monetary transactions of an entity in accordance with established concepts, principles, accounting standards and legal requirements and presentation of a view of those transactions during and the end of an accounting period. Provide information for external users. Eg: investors, government, banks. MANAGEMENT ACCOUNTING: Management accounting is concerned with the collection of data (from both internal and external sources), its analysis and processing into information, and the interpretation and communication of that information so as to assist management with planning, control and decision making.
MANAGEMENT ACCOUNTING Deals with segments of the business. Internal reporting. Futuristic in its approach. Complete freedom need not follow the Generally Accepted Accounting principle(GAAP). Subjective in nature based on judgment and estimates Reports are furnished periodically depend on the desires and needs of management Used less
Other disciplines
MANAGEMENT OF ORGANIZATION
Data
Raw material for processing i.e: facts,events andtransactions
Processed / analysed
Role of management Accountant
Decision Making
Control
Planning
Accurate
Clear Confidence Communicated
5.
Computer software Managers access to the wide range of sotware for processing data and preparing management information. Eg spreadsheet used extensively for planning and forecasting. Speed of communication and network (Accessibility) Ability to link a number of users via networking. Improve the distribution of information. Data can be transmitted quickly to remote locations. Internet / intranet allow managers to access business data from laptop anywhere in the world.
6.