ECON 10B Chapter Notes - Chapter 16: Finished Good, Financial Accounting, Root Mean Square
Document Summary
Financial accounting focuses on preparing nancial statements. Managerial accounting focuses on the accounting tools manageres use to run a business. How to manage a business successfully (managerial accounting) Planning = choosing goals and deciding how to achieve them. Budget = a nancial plan that managers use to coordinate a business"s activities. Controlling = implementing the plans and evaluating operations by comparing actual results to the budget. Managers havve to do a lot of cost/bene t analysis: weighing costs against bene ts to help make decisions. Management accountability = manager"s responsibility to the various stakeholders of the company to wisely manage the resources of the organization. Businesses are generally classi ed as service, merchandising, or manufacturing. Service companies = sell their time/skills/knowledge (accounting rms. phone companies, cleaning services) Service companies have the simplest accounting because they carry no inventory or products to sell.
