ACCY211 Lecture Notes - Lecture 1: Management Accounting, Financial Accounting, Cost Accounting
ACCY211 week 1
I. COST, MANAGEMENT & FINANCIAL
ACCOUTNING
Cost accounting measures, analyses and reports financial and
nonfinancial information relating to the costs of acquiring or
using resources in an organisation. Therefore, it provides
information for Management accounting and Financial
accounting.
Management accounting measures, analyses and reports
financial and non‐financial information that helps managers
make decisions to fulfil the goals of an organisation.
Financial accounting focuses on reporting to external parties,
such as investors, government agencies, banks, and suppliers.
II. SUSTAINABILITY
Concern about environment
• Sustainability – ‘development that meets the needs of the present
without compromising the ability of future generations to meet their own
needs’ (Brundtland, 1987).
• Management accounting assists by:
– identifying relevant costs and benefits
– using activity‐based costing
– carrying out a cost‐benefit analysis of sustainability
initiatives.
III. STRATEGIC DECISION & MANAGEMENT
ACCOUNTANT
Strategy – specifies how an organisation 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.
– Management accounting helps answer important
questions,
such as:
Who are our most important customers, and how do
we deliver value to them? i.e. online sale
What substitute products exist in the marketplace,
and how do they differ from our own? Function,
quality, price
What is our critical capability? Technology,
production, marketing
Will we have enough cash to support our strategy, or
will we need to seek additional sources? Other
business?
IV. 12
Quick check:
1. Management accounting:
a) focuses on estimating future revenues, costs, and
other measures to forecast activities and their
results
b) reports information in accordance with relevant
accounting standards
c) provides information to external parties
d) provides information that is generally available only
on a quarterly or annual basis
2. Financial accounting:
A. reports include detailed information on the various
operating segments of the business such as product
lines or departments
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Cost accounting measures, analyses and reports financial and nonfinancial information relating to the costs of acquiring or using resources in an organisation. Therefore, it provides information for management accounting and financial accounting. Management accounting measures, analyses and reports financial and non financial information that helps managers make decisions to fulfil the goals of an organisation. Financial accounting focuses on reporting to external parties, such as investors, government agencies, banks, and suppliers. Concern about environment: sustainability development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (brundtland, 1987), management accounting assists by: Carrying out a cost benefit analysis of sustainability initiatives. Strategy specifies how an organisation 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. Management accounting helps answer important questions, such as:
