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Title: Management Accounting - Introduction
Description: Introduction to Management Accounting would basically very helpful to the Students who are following CIMA, ACCA and many other local and International Professional Accounting bodies. In addition to the students, this would be helpful for the lecturers who conduct lectures regarding MA as well. This notes give you the basic understanding about Management Accounting and provides you the fundamentals which are needed for advanced MA purpose . Collin Drury's books and other MA professional institution books have been used as the source of these notes
Description: Introduction to Management Accounting would basically very helpful to the Students who are following CIMA, ACCA and many other local and International Professional Accounting bodies. In addition to the students, this would be helpful for the lecturers who conduct lectures regarding MA as well. This notes give you the basic understanding about Management Accounting and provides you the fundamentals which are needed for advanced MA purpose . Collin Drury's books and other MA professional institution books have been used as the source of these notes
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Contents
What is accounting?
Financial accounting
Management Accounting
Management Accounting: Definition
Cost Management
Work of Management
Planning
Directing and Motivating
Controlling
Planning and Control Cycle:
Managerial vs
...
It exists to provide information for the
end-user
...
The process of identifying, measuring and communicating economic
information to permit informed judgments and decisions by users of
information
...
Its main focus is on external reporting to a number of
groups
...
Management Accounting
Measures, analyzes, and reports financial and nonfinancial information
Helps management in the processes of decision-making, planning and
control, etc
...
Management Accounting: Definition
“Management accounting is the application of professional
knowledge and skill in the preparation and presentation of
accounting information in such a way as to assist management in the
formulation of policies and in planning and controlling the operations
of the organization
...
-
Employee work assignment
Routine problem solving
Conflict resolution
Effective communication
Controlling
• This ensures that plans are being followed
...
Financial accounting
GAAP* - Generally Accepted Accounting Principles
Limitations of Financial Accounting
Shows only overall performances
Historical in nature
No performance appraisal
No material control system
No labor cost control
No proper classification of costs
No analysis of losses
Inadequate information for price fixation
Fails to supply useful data to management
Strategic Decisions
Strategy specifies how an organization matches its own capabilities with
the opportunities in the marketplace to accomplish its objectives
Strategic cost management describes cost management that specifically
focuses on strategic issues
Companies follow one of the two broad strategies:
◦ The cost leadership strategy
◦ The product differentiation strategy
Strategic Decisions and the Management Accountant
Management accounting information helps managers formulate strategy by
identifying:
◦ Most important customers
◦ Substitute products that exist in the marketplace
◦ Critical capability
◦ Funds available or needed
Value Chain
Sequence of business functions in which customer usefulness is added to
products
Different companies create value in different ways—cost and efficiency,
quality, innovation, building consumer brand, etc
...
They are:
Supply-Chain Analysis
Parts of the value chain associated with producing and delivering a product
or service
Describes the flow of goods and services from initial sources of materials
and services to the delivery of products to customers, regardless of the
organization in which these activities occur
Sustainability and Key Success Factors
Companies use the value chain and supply chain to deliver their customers
with ever-improving levels of performance regarding:
◦ Cost and efficiency
◦ Quality
◦ Time
◦ Innovation
Sustainability
It refers to the process of development and implementation of strategies to
achieve long-term financial, social, and environmental performance
Sustainability performance is important to companies for several reasons:
◦ Investors
◦ Employees
◦ Customers
◦ Social responsibility
Financial Accounts
Management Accounts
The Management Accounting consists of four essential tasks:
Cost determination
Cost control
Performance evaluation
Supplying Information for Planning and decision making
The purpose of Management Accounting system
To provide information about product costing to be used in financial
statements
To provide information for planning , controlling and organizing
To provide relevant , reliable and timely information
To introduce cost effective appropriate system for the organization
...
They are:
◦ Employ a cost–benefit approach to make resource-allocation
decisions
◦ Give full recognition to behavioral and technical considerations
◦ Use different costs for different purposes
Ethics of Management Accounting
Basic foundation of any well-functioning economy
Principles and values that are followed by an organization
Prevent malpractices in financial transactions
Promote trust and loyalty of customers and employees of an organization
Title: Management Accounting - Introduction
Description: Introduction to Management Accounting would basically very helpful to the Students who are following CIMA, ACCA and many other local and International Professional Accounting bodies. In addition to the students, this would be helpful for the lecturers who conduct lectures regarding MA as well. This notes give you the basic understanding about Management Accounting and provides you the fundamentals which are needed for advanced MA purpose . Collin Drury's books and other MA professional institution books have been used as the source of these notes
Description: Introduction to Management Accounting would basically very helpful to the Students who are following CIMA, ACCA and many other local and International Professional Accounting bodies. In addition to the students, this would be helpful for the lecturers who conduct lectures regarding MA as well. This notes give you the basic understanding about Management Accounting and provides you the fundamentals which are needed for advanced MA purpose . Collin Drury's books and other MA professional institution books have been used as the source of these notes