Textbook Notes (367,759)
Canada (161,375)
Accounting (248)
ACCT 2230 (113)
Chapter 1

Chapter 1,2

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Department
Accounting
Course
ACCT 2230
Professor
Elliot Currie
Semester
Fall

Description
Chapter 1 Managerial Accounting and the Business Environment Management Accountingfocuses in reporting to internal parties managers provides data that helps organization run more efficiently Managerial Accounting concerned with providing information to managers for use in planning and controlling operations and for decision making uses customized format toreport financial and nonfinancial informationprovide information useful to managersplan communicate and implement strategymonitor performancecoordinate product design production and marketingFinancial Accounting focuses on reporting to external parties investors regulators provides data by which companys past performance is judged Financial Accounting concerned with providing information to shareholders creditors and others outside the organization uses standardised format torecord business transactionsreport aggregate results to external usersComparisonManagement Accounting Financial Accounting Primary Users Managers External parties Reporting Standards None GAAP IFRSASPE Time Horizon Future Flexible Historical Fixed Reports Detailed Summary Requirements No mandatory Mandatory for external reportsWork of Managers and Their Need For Managerial Accounting Information every organization has managers who are responsible for making plans organizing resources directing personnel and controlling operations Strategy game plan that enables a company to attract and retain customers by distinguishing itself from competitors focal point of companys strategy should be its target customerscustomer value propositions tend to fall under three broad groups some companies may use combination of these but one usually outweighs the others in terms of importanceCustomer intimacy understand and respond to individual customer needs The reason thatyou should choose us is because we understand and respond to your individual needs betterthan out competitors Keg SteakhouseBar DellOperational excellence deliver products and services faster more conveniently and at lower prices the reason that you should choose us is because we can deliver products and services faster more conveniently and at a lower price than our competitors Westjet WalmartProduct leadership offer higher quality products the reason that you should choose us is because we offer higher qualityproducts than our competitors RIM BMWthree major activities carried out by managers Planning developing objectives and preparing budgets to achieve these objectives involves selecting course of action and specifying how the action will be implemented identify alternatives and select the one that best meets organizations objectives top management looks at sales volume profit margins cost of companys establishedoutlets in similar markets Budget quantitative plan for the acquisition and use of financial and other resourcesover a specified future time period usually prepared under direction of the controller typically prepared annualy to represent managements plans in specific quantitativeterms Controller manager in charge of the accounting department in an organization Directing and motivating mobilizing people to carry out plans and run routine operationsmanagers plan for future oversee daytoday activities can daily sales reports and keep theorganization functioning smoothlymanagers assign task to employees arbitrate disputes answer questions solve onthespotproblems make small decisions that affect customers and employees Controlling ensuring that the plan is actually carried out and is appropriately modified as circumstances change managers seek to ensure plans being followedControl steps taken by management that attempt to increase the likelihood that the objectives developed at the planning stage are attained and to ensure that all parts of the organization function in a manner consistent with organizational policiesFeedback accounting and other reports that help managers monitor performance and focus onproblems andor opportunities that might otherwise go unnoticed key to effective controlPerformance Report detailed report comparing budgeted data to actual data feedback report that compares budgeted to actual results
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