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Chapter 1

Chapter 1 Lecture-delete after print.pdf

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Department
Accounting
Course
ACTG 2020
Professor
Ben Kelly
Semester
Winter

Description
Chapter 1 Lecture: Managerial accounting: prepare information to managers, people inside the company who direct and control its operations -­‐ Some focus on operational excellence or turn over, efficiency deciding where to focus info on. -­‐ Carry out 3 major activities o Controlling: ensuring the plan is carried out appropriately and modified as circumstance change o Planning: setting an objective and preparing budgets to achieve the goal o Decision making: a game plan to attract and retain customers by distinguishing itself from competitors o Directing: mobilizing people to carry out plans and run routine operations -­‐ That help org. run more efficiently Customer valuation: • Product leadership-Quality • Customer intimacy-meet customer needs individually • Operational excellence - deliver faster, convenient and at a lower price Financing accounting: concerned with providing information to shareholders, creditors, and others outside the org. 7 key differences from financial accounting: • Managerial is forecasting, financial is look ing at historical data • Managerial has no standards, don’t have to follow any standards but follow a guidance v7890 • Managerial looks at each division individually, financial is overall financial performance • Users are internal mangers not external people • Emphasis on relevance, financial on objectivity and verifiability • Emphasis on timelines, but financial is focused on precision \ • Not mandatory to do managerial accounting, financial mandatory for external reports Controller: manager in charge of the accounting department Performance report: compares budgeting to actual results 4 areas managerial accountant needs to follow: • Managerial maintains objectivity –receive both bad and good info • Integrity- avoid conflict of interest, by communicating the limits of pr ofessional competence • Confidentiality- important beause the importance of the information they analyze • Competence- appropriate to their designation, must bring a certain level Corporate governance: a system by which a company is direct and controlled • Protect the interest of shareholders and stakeholders. CSR: org consider the needs of all stakeholders when making decisions Business process: a series of steps that are followed in order to carry out some task in a business Value chain: major business functio ns that add value to a company’s products and services. • Ex. lean production • Siz sigma • Enterprise systems • Risk management • Ex. all about combing the Bu’s like marketing, accounting, manufacturing, and distribution etc. Lean production • Making sure everyone is busy, even when no one demands the inventory in a manufacturing company, • Leads to raw materials work in progress and finished goods. • Known as a push factor generating large amounts of unsold inventory Lean thinking model: • 5 step management approach, org anizing people and resources around the flow of business processes and that pulls units through these processes in response to customer orders • 1. Identify value in specific product • 2. Find business process that delivers the value • 3. Organize work arrangeme nts around the flow fo the business process • 4. Create a pull system that responds to customer orders • 5.Continuously pursue perfection in the business process. • Pull system: where make only when customers demand, leaving employees idle during slow times, • JIT: just in time production- production is not initiated until a customer has ordered a product Supply chain management: coordination of business process across companies to better serve end consumers Six Sigma: • Relies on customer feedback and fact-based data gathering and analysis techniques to drive process improvement • 5 stages: define, measure, analyze, improve, control • Process improvement method • During analyzing process look for problems that they’re identified during the measuring process. Also reveal process that do not add value to the product or service. o Aka. Non-value added activities: activities that customers are not willing to pay for • During improve stage potential solutions are created • Control stage- to ensure that the problems remain fixed Enterprise systems: • Integrating data across an organization in a single software system to avoid duplication and inconsistency. Enterprise risk management: • Process used by a company to proactively identify and mange foreseeable risks • First identify the risk and then either accept, avoid, share, reduce the risk Chapter 2 lecture 4 classifications of cost: • Product vs. period (external use) o Vs. manufacturing vs. non -manufacturing costs o Product= assets o Period= expenses • By behavior (fixed vs. variable costs) to forecast in future o For estimating and predicting costs o Variable vs. fixed costs o Ex. depreciation expense we expect this to occur again, o Ex. production expense can increase depending on how much is produced • Direct vs. indirect (to help assign costs to products) o Use to help a manage to evaluate the specific cost object o Indirect costs= costs that is shares by multiple products o Direct costs= assigned to a specific production product. o Have to define what the cost object is, even for a small company if u only make 1 kind of book, looking at the product line, a supervisor can be direct, or indirect if by unit. • Cost for decision making o Use of differential costs, sunk cost and opportunity costs Cost: is a measure of resources given up to achieve a particular purpose Period  vs.  pro   Period costs: include
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