MGT 5 Lecture Notes - Lecture 1: Management Accounting, Financial Statement, Finished Good

• School: UCSD
• Department: Management, Rady School of
• Course: MGT 5
• Professor: Houskeeper

Document Summary

Objective of financial accounting is to prepare and understand financial statements. Always a lag when companies issue financial statements because they need to check everything. #1 objective of managerial accounting is timely data. Can"t wait, things need to be out immediately. Raw materials work in process finished goods cost of goods sold. Varies on the business, not all businesses produce finished goods from raw materials. Work in progress has costs -- conversion costs (cost to turn a raw material into a finished product) Costs incurred to put the work facility in place. Utilities, rent/depreciation, forklifts and other tools, etc. Balance sheets are the financial statements related to inventories. Once things are bought, they are no longer inventory, but cost to goods sold. Income statements are what keep track of cost to goods sold. Profitability is the sale minus the costs in question (the cost to goods sold) Beginning of accounting period + purchases = inventory.