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Study Guide

ACC 406- Final Exam Guide - Comprehensive Notes for the exam ( 91 pages long!)

91 pages402 viewsWinter 2018

Department
Accounting
Course Code
ACC 406
Professor
Maurizio Di Maio
Study Guide
Final

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Ryerson
ACC 406
Final EXAM
STUDY GUIDE
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ACC406 Chapter 1: Introduction to Managerial Accounting
1.1 What is Managerial Accounting
Managerial Accounting: Is the provision of accounting Information for a companies INTERNAL USE
Uses firms accounting system and design in way to support managers information needs !
Not Bound by GAAP (Generally Accepted Accounting Practices or IFRS (International Financial Reporting
Standards) !
- The AcSB (canadian Accounting Standards board is responsible for setting GAAP for Canadian Private
enterprises (ASPE) not for non profits and pension plans !
- IFRS must be used by public companies in Canada (Optional for private companies) !
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Managerial Accounting has 3 Broad Objectives
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To Provide Information for ......
Planning the organizations actions !1.
Controlling the organizations actions !2.
Making eective decisions!3.
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Planning: The detailed formulation of action to achieve a particular end
Requires setting objectives and identifying methods to achieve these objectives !
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Controlling: Monitoring a plans implementation and taking corrective action as needed
This info can be used to evaluate steps being taken to implement a plan !
- Based on the feedback, a manager (or worker) may decide to let the plan continue or take corrective action to
put actions back in harmony with plan or do midstream replanning. !
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Managerial accounting information used for planning and controlling purposes can either be financial or non
financial in nature !
e.g. by redesigning operations a firm may be able to reduce production time, downtime and energy consumed,
while increasing output per hour !
- All these relate to non financial performance !
- Yet they will have a positive impact on financial results !
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Decision Making: The process of choosing among competing alternatives
Manager cannot successfully plan or control the organizations actions without making decisions regarding
competing alternatives. !
One of the roles of managerial accounting is supply information that facilitates and improves decision making !
CSR REPORTS
Many companies are deciding to publicly release large quantities of managerial accounting information typically
given only to internal users through optional Corporate Social Responsibility Reports (BC Hydro & TELUS),
Social Responsibility reports ( Canada Post), or Citizenship Reports (Proctor and Gamble) !
Occurs because forms want to manage their reputations by preparing and releasing such information themselves
rather than having other sources publish their own estimates of such info
Some leading companies (e.g. Pepsi) combine their CSR report with their annual report!
- results in single integrated report combining both traditional financial accounting information and managerial
accounting information !
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1.2 Comparison of Managerial and Financial Accounting
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Financial Accounting: Primarily concerned with producing information ( financial statements ) for external
users, including investors, creditors, customers, suppliers, government agencies (e.g. CRA) and labour
unions
Financial statements must conform to certain rules and conventions that are defined by various bodies such as
the Accounting Standards Board (AcSB) of CPA Canada, the Financial Accounting Standards Board in the United
States or International Accounting Standards Board (IASB) internationally. !
- These rules referred to as GAAP or IFRS, pertain to issues such as the recognition of revenues; timing of
expenses; and and recording of assets, liabilities and equity. !
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