Managerial Accounting:

An Overview
Chapter 1

PowerPoint Authors:
Susan Coomer Galbreath, Ph.D., CPA
Charles W. Caldwell, D.B.A., CMA
Jon A. Booker, Ph.D., CPA, CIA
Cynthia J. Rooney, Ph.D., CPA
Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
 1-2

Financial and Managerial

Accounting: Seven Key Differences
 1-3

Work of Management

Planning
Planning
Controlling
Controlling
Decision
Decision
Making
Making
 1-4

Planning

Establish
Establish Goals.
Goals.

Specify
Specify How
How Goals
Goals
Will
Will Be
Be Achieved.
Achieved.

Develop
Develop Budgets.
Budgets.
 1-5

Controlling
The
The control
control function
function gathers
gathers feedback
feedback to
to
ensure
ensure that
that plans
plans are
are being
being followed.
followed.

Feedback
Feedback inin the
the form
form ofof performance
performance reports
reports
that
that compare
compare actual
actual results
results with
with the
the budget
budget
are
are an
an essential
essential part
part of
of the
the control
control function.
function.
 1-6

Decision Making
Decision
Decision making
making involves
involves
making
making aa selection
selection among
among
competing
competing alternatives.
alternatives.

What
What should
should
we
we be
be selling?
selling?
Who
Who should
should
we
we be
be serving?
serving?
How
How should
should
we
we execute?
execute?
 1-7

Accounting Majors
The IMA estimates that more than
80% of professional accountants
in the U.S. work in non-public
accounting environments.

Employers expect accounting majors

to have strong financial accounting
skills, but they also expect
application of the planning,
80% controlling, and decision making
skills that are the foundation of
managerial accounting.
 1-8

Certified Management Accountant

A
A management
management accountant
accountant
who
who has
has the
the necessary
necessary qualifications
qualifications
and
and who
who passes
passes aa rigorous
rigorous professional
professional
exam
exam earns
earns the
the right
right to
to be
be known
known asas aa
Certified
Certified Management
Management Accountant
Accountant
(CMA).
(CMA).
 1-9

Managerial Accounting: Beyond the

Numbers

The primary purpose Planning

Planning
of this course is to
teach measurement
skills that managers
Controlling
Controlling
use to support
planning, controlling,
and decision making
Decision
Decision
activities.
Making
Making
 1-10

Managerial Accounting: Beyond the

Numbers
Measurement What
What net
net income
income should
should my
my company
company
skills help report
report to
to its
its stockholders?
stockholders?
managers Measure
Measure and
and report
report historical
historical data
data
answer that
that complies
complies with
with applicable
applicable rules.
rules.
important How
How will
will my
my company
company serve
serve its
its customers?
customers?
questions. Measure
Measure andand analyze
analyze mostly
mostly non-
non-
financial,
financial, process-oriented
process-oriented data.
data.
Will
Will my
my company
company need
need to
to borrow
borrow money?
money?
Measure
Measure and
and analyze
analyze estimated
estimated
future
future cash
cash flows.
flows.
 1-11

End of Chapter 1