...management accounting systems Ran Tao Introduction Accounting is the process of identifying, measuring and communicating financial information about an entity to permit informed judgments and decisions by users of the information. (Weetman, 2010) Management accounting is a specialist branch of accounting which has developed to serve the particular needs of management. It helps companies to formulate business strategies and make right business decisions. Many different kinds of management accounting systems are available, some include cost-accounting system, job-costing system and inventory management system. In order to make a smart business decision, it is important to select an appropriate management accounting system that integrates with the company’ financial accounting system. Management accounting innovations and origins An innovation is the successful introduction of an idea perceived as new into a given social system, management accounting innovations involve a set of design characteristics. (Hopper, 2007) The innovation aspects consist of for example types of cost objects, financial or non-financial data and allocation bases. If a proposed system leads to better decisions than the existing system, and the expected benefits from the proposed system exceed the cost of implementation, the new system is adopted. (Feltham, 1972; Demski, 1980) In this case, innovative management accounting system is adopted in many businesses. Management accounting change can...
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...Managerial Accounting Unit 2 Individual Project Stephanie Davenport American Inter Continental University Details: Unit 2 - Cost Management Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health agency, is concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future but increasing demand for services. To plan for reduced budgets, she must first identify where costs can be cut or reduced and still keep the agency functioning. Below are some data from the past year. Program Area | Costs | Administration | | Salaries: | | Administrator | $60,000 | Assistant | $35,000 | Two Secretaries | $42,000 | Supplies | $35,000 | Advertising and promotion | $9,000 | Professional meetings/dues | $14,000 | Purchased Services: | | Accounting and billing | $15,000 | Custodial | $13,000 | Security | $12,000 | Consulting | $10,000 | Community Mental Health Services | | Salaries (two social workers) | $46,000 | Transportation | $10,000 | Outpatient mental health treatment | | Salaries: | | Psychiatrist | $86,000 | Two Social Workers | $70,000 | • This is how managerial accounting is different from cost accounting. Cost Accounting: It is the technique or arrangement acclimated for determining the amount of project, process, or affair acclimated by the acknowledged entities in society, or assigned by Authoritative accounting group. Cost accounting is the analysis...
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...Understanding management accounting techniques in the context of organizational change: as strategic business partners with a responsibility to improve operations, management accountants must identify techniques that support incremental change and h elp transform their firm. EXECUTIVE SUMMARY Driven by the need for organizational change, management accounting techniques have developed and proliferated at an unprecedented rate in the last few decades. Some critics, however, have charged that the changes are a "reinvention of the wheel" every few years. To put these issues in perspective, let's look at a framework created to illustrate the distinctive nature of these techniques in an organizational change context. The framework considers such factors as user resistance and organizational culture that can influence the applicability and implementation success of the techniques. After tracing the history of management accounting beginning in 1850, accounting scholar Robert S. Kaplan comments, "Despite considerable change in the nature of organizations and the dimensions of competition during the past 60 years, there has been little innovation in the design and implementation of cost accounting and management control systems." (1) All the practices employed by companies and described in management accounting textbooks had apparently been developed by 1925, despite major changes in the nature and operations of organizations. To develop the field of managerial accounting, Kaplan and others...
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...Cost & Management Accounting Reporting System -Necessity, Role & Control Framework: An Analysis Management & Cost Accounting Reporting Systems are interwoven in the management processes of all well managed organizations across the globe. The necessity of such reporting systems is going to increase in future as the market-place become highly competitive and organization functions become more complicated and inter-twined. This fact also brings to fore the necessity of a common control framework to monitor this system so that it can contribute effectively and efficiently to the pre-determined organizational goals. What is Cost & Management Accounting Reporting Systems? Cost Accounting Reporting System deals with the process of tracking, measuring, recording and classifying the appropriate allocation of expenditure (financial and non-financial) for the determination of the cost of product or service in an organization and for the presentation of suitably arranged data for the purpose of control and guidance of management ( Horngren et al, 2010). Costs are measured in terms of Direct Costs, Indirect Costs and Overhead / Absorbed Costs. Managers use cost accounting to support decision making to reduce a company's costs of products and services and improve its profitability. Management Accounting Reporting System is concerned with the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of financial and non-financial...
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...UNIVERSITY OF EDUCATION WINNEBA COLLEGE OF TECHNOLOGY EDUCATION KUMASI NAME : ASSEM GABRIEL AKROFI PROGRAMME : BSc (ACCOUNTING EDUCATION) LEVEL : 100 CLASS : B SUBJECT : ACCOUNTING COURSE CODE : ACC 111 NAME OF LECTURER : J.Y DWOMMOR INDEX NUMBER : 5151010092 QUESTION With the introduction of computer, accounting as an area of studying has out lead its importance because with two or three weeks of training, a computer programmer can prepare financial statement using computer application. A. What extend do you agree or disagree with this statement? B. In not less than two and less than five pages, write an essay on this issue. SOLUTION I disagree with the motion that a computer programmer can prepare financial statement on his own. To set the issue burning, let us consider who an accountant is and the role he or she performs in an organization as compared to a computer programmer. An accountant is anyone who monitors and records the flow of money through a business or an organization. He or she verify the accuracy of all monetary transactions and to make sure that all these are legal and follow correct guidelines. Accountants may choose to work private individuals and help them with their financial decisions, tax returns or other money related issues. The accountant practises accountancy and accounting which is the disclosure, measurement or provision of assurance about financial information which help investors, tax authorities, managers...
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...concerned with development and maintenance of accounting records. It is the "how" of accounting. | Accounting is abstract and theoretical. It is concerned with the "why", in other words the reason or justification for any action that’s implemented. | Bookkeeping is a part of accounting. It is mainly a mechanical aspect of recording, classifying and summarising transactions. | Accounting is a four-stage process of recording, classifying, summarizing and the interpretation of the financial statements. | The process of bookkeeping does not require any analysis. | Accounting uses bookkeeping information to interpret the data and then compiles it into reports to present to management. | It records incoming transactions (received payments from customers, etc.) and outgoing transactions (paying for specific bills on the correct time, etc). | They usually deliver the business results in the form of reports. Management can see whether the company is successful or not and with the help of the analysis they can see where the problems come from in case of negative results. | There are two basic kinds of bookkeeping: single entry bookkeeping and double entry bookkeeping. | The accounting department also does preparations of a company’s budgets and plans loan proposals. | The advantages and disadvantages of computerized accounting system: Advantages | * Faster and efficient in processing of information; * Automatic generation of accounting documents like invoices, cheques and statement...
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...Management Accounting IEX Prof. Dr. Michael Lederer . Dr © Copyright : Prof. Dr. Michael Lederer Hochschule Furtwangen – Furtwangen University © Copyright : Prof. Dr. Michael Lederer Page 1 Contents overview management accounting A. Introduction and basic concepts A.1 Cost terms A.2. Costing systems and cost allocation A.3 Cost-volume-profit analysis A.4 Operations accounting 5 11 26 63 78 B. The budgeting process B.1 Budgeting B.2 Variance analysis © Copyright : Prof. Dr. Michael Lederer 87 88 114 C. Relevant cost and decision making 136 D. Marketing and pricing decisions 157 © Copyright : Prof. Dr. Michael Lederer Page 2 Recommended literature • • • • • • • • • • Horngren/Datar/Rajan: Cost Accounting. A Managerial Emphasis, Pearson Global Edition Collier: Accounting for Managers, Wiley Horngren/Bhimani/Datar/Foster: Management and Cost Accounting. FT Prentice Hall Atrill & McLaney: Management Accounting for Decision Makers, Pearson Davis/Davis: Managerial Accounting. Wiley Cooke: The McGraw-Hill 36-Hour course in Finance for Non-Financial Managers. McGraw-Hill Bragg: Controller’s Guide to Planning and Controlling Operations. Wiley Roehl-Anderson, Bragg: Controllership - The Work of the Management Accountant. Wiley Blocher/Chen/Lin: Cost Management - A strategic emphasis, McGraw-Hill Professional Dictionary, Accounting; Tax; Banking; German-English/English-German, Schäffer© Copyright : Prof. Dr. Michael Lederer Poeschel ...
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...HOFSTRA UNIVERSITY FRANK G. ZARB SCHOOL OF BUSINESS “Educating for Personal and Professional Achievement” DEPARTMENT OF ACCOUNTING, TAXATION, AND LEGAL STUDIES IN BUSINESS ACCOUNTING 231 - COST ACCOUNTING SYSTEMS GRADUATE- 3 S.H. SP 2016 Section A: Wednesday, 3:30-5:50pm, CRN 21871, Starr 210 INSTRUCTOR’S NAME: Dr. Nathan Slavin OFFICE HOURS: Monday and Wednesday 2:25-3:25 LOCATION OF OFFICE: 043 Weller Hall PHONE NUMBER: (516) 463-5690 E-MAIL ADDRESS: actnzs@hofstra.edu Teaching Assistant: Ms. Dan Gu (516) 637-9517 Dgu1@pride.hofstra.edu GENERAL INFORMATION Location of Department Office: 205 Weller Hall Telephone number of Department: 516-463-5684 Department Chairperson: Professor Victor Lopez Department Administrator: Prof. Linda Schain DESCRIPTION OF COURSE This course introduces students to the concepts, conventions, and principles underlying cost accounting and analysis for use by managers for making decisions. At the end of this course, students will understand cost behavior and cost allocation techniques, appreciate internal profitability reporting and analysis, and understand both job order costing and process costing systems utilizing actual, normal and standard costing applications. Also, students will...
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...Accounting Practices Name: XXXXXXXX oooo Accounting I-ACC100 Professor XXXXXXXXX Date: XXXXXXXXX Accounting Practices The year is 2011, and this country has been nearly crippled financially with the corporate accounting scandals. One of the most famous is the scandal of Enron, Waste Management, WorldCom, Qwest Communications, Health South Corporation, and then the infamous Bernard L. Madoff Investment scandal. The Medoff Ponzi scheme robbed millions of hard working people of the savings. This is considered to be the largest investment fraud ever committed by one person. This all lead to the new and enhanced accounting standards which is called the Sarbanes-Oxley Act of 2002. Analyze the new or enhanced standards for all U.S. public company boards, management, and public accounting firms that the SOX required. The Sarbanes-Oxley Act of 2002 (Pub. L. No. 107-204, 116 Stat. 745) is also known as the Public Company Accounting Reform and Investor protection Act of 2002 and is simply referred to as SOX. This Federal law was passed in response to many corporate scandals which was mentioned in the abstract (Consulting, 2011). The public trust in accounting standards diminished, and everyone was pulling their money out of their investments which initiated the recession we are currently in. With the implementation of SOX the public is slowly regaining their trust on accounting practices, by simply knowing there is oversight. This wide ranging legislation has established...
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...The Accounting Information System http://edugen.wileyplus.com/edugen/courses/crs6348/kieso978... Print this page CHAPTER 3 The Accounting Information System LEARNING OBJECTIVES After studying this chapter, you should be able to: 1. Understand basic accounting terminology. 2. Explain double-entry rules. 3. Identify steps in the accounting cycle. 4. Record transactions in journals, post to ledger accounts, and prepare a trial balance. 5. Explain the reasons for preparing adjusting entries. 6. Prepare financial statements from the adjusted trial balance. 7. Prepare closing entries. 8. Differentiate the cash basis of accounting from the accrual basis of accounting. 9. Identify adjusting entries that may be reversed. 10. Prepare a 10-column worksheet. 11. Apply IFRS to the accounting information system. Needed: a Reliable Information System Maintaining a set of accounting records is not optional. Regulators require that businesses prepare and retain a set of records and documents that can be audited. The U.S. Foreign Corrupt Practices Act, for example, requires public companies to “… make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets. …” But beyond these two reasons, a company that fails to keep an accurate record of its business transactions may lose revenue and is more likely to operate inefficiently. One reason accurate records are not provided is because of economic...
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...Electronic Accounting in Today's World Leigh M., Yahoo! Contributor Network May 18, 2007 "Contribute content like this. Start Here." .More: Accounting Software Accounts Receivable Accounting Accounting Degree .Share on Facebook Share on Twitter Print Flag Close 4 Helpful? Post a comment Just about everything in the world today has been affected by technology. Particularly, accounting has been affected to the highest degree. There is less paperwork and less guesswork. Accounting software has made accounting much easier to deal with by saving all the information one enter into the system and distributing it the data amongst all the proper locations. There is only one thing accounting software has not simplified is deciding which software to use. If one were to look up the words "accounting software" on google.com one would receive nearly six million results. However, I will only discuss two. Best Software's Peachtree Complete Accounting and Intuit's QuickBooks Pro are two of the most popular small business solution systems on the market today. Peachtree offers five levels of current software ranging from $99.00 for a beginner's version to $499.00 for a premium version. QuickBooks offers six levels of software ranging from $19.95 for an online version to $3,500.00 for an enterprise version. Except exactly how do the two softwares compare in everyday use? Both can integrate with Microsoft Excel. Both systems have accounts payable, accounts receivable, etc. One can track...
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...CHAPTER 1 THE ACCOUNTANT’S ROLE IN THE ORGANIZATION TRUE/FALSE 1. Management accounting information focuses on external reporting. Answer: True/False 2. A good cost accounting system is narrowly focused on a continuous reduction of costs. Answer: True/False 3. Modern cost accounting plays a significant role in management decision making. Answer: True/False 4. Financial accounting is broader in scope than management accounting. Answer: True/False 5. Cost accounting measures and reports short-term, long-term, financial, and nonfinancial information. Answer: True/False 6. Cost accounting provides information only for management accounting purposes. Answer: True/False 7. The key to a company’s success is always to be the low cost producer in a particular industry. Answer: True/False 8. Companies generally follow one of two basic strategies: 1) providing a quality product or service at low prices, or 2) offering a unique product or service often priced higher than competing products. Answer: True/False 9. The supply chain refers to the sequence of business functions in which customer usefulness is added to products or services. Answer: True/False 10. An effective way to cut costs...
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...(a) Joe Delong is not sure about the difference between cost accouting and a cost accounting system. Explain the difference to Joe. Answer: Cost accounting involves the measuring, recording, and reporting of product costs. A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company. (b) What is an important feature of a cost accounting system? Answer: An important feature of a cost accounting system is the use of a perpetual inventory system that provides immediate, up-to-date information on the cost of a product. 2. (a) Distinguish between the two types of cost accounting systems. Answer: The two principal types of cost accounting systems are: (1) job order cost system and (2) process cost system. Under a job order cost system, costs are assigned to each job or batch of goods; at all times each job or batch of goods can be separately identified. A job order cost system measures costs for each completed job, rather than for set time periods. Under a process cost system, product-related costs are accumulated by or assigned to departments or processes for a set period of time. Job order costing lends itself to specific, special-order manufacturing or servicing while process costing is better suited to similar, large-volume products and continuous process manufacturing. (b) May a company us both types of cost accounting systems? A company may use both types of systems. For example, General Motors uses...
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...When comparing Managerial Accounting information and Financial Accounting information, which of the following, related to Managerial Accounting information, would be true?(It is concerned with estimates of the results of future activities) 2.In which account are the costs of manufacturing a product (that is ready for sale) accumulated until such time as the product is sold? (Finished Goods Inventory)3. Fardohnya Industries, Inc. reports the following information at 12/31/2012: -Acquired $75,000 cash by issuing common stock -Paid $70,000 cash for materials used in the manufacture of 200 units of product -Paid $16,000 cash for administrative salaries -Paid $35,000 cash for factory wages -Recognized depreciation on factory equipment, $5,000 -Collected $160,000 cash on sales made during 2012 -Recognized depreciation on office furniture, $3,500. Fardohnya makes all sales for cash. There are no credit sales. What is the total product cost?(110,000)* Product costs consist of materials used, labor applied, and overhead. Fardohnya, therefore, has a total product cost of $110,000 ($70,000 + $35,000 + $5,000).4. Fardohnya Industries, Inc. reports the following information at 12/31/2012: -Acquired $75,000 cash by issuing common stock -Paid $70,000 cash for materials used in the manufacture of 200 units of product -Paid $16,000 cash for administrative salaries -Paid $35,000 cash for factory wages -Recognized depreciation on factory equipment, $5,000 -Collected $160,000 cash on sales made during...
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...Seventh Edition Accounting for Decision Making and Control Jerold L. Zimmerman University of Rochester To: Conner, Easton, and Jillian ACCOUNTING FOR DECISION MAKING AND CONTROL, SEVENTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. Previous editions © 2009, 2006, and 2003. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOW/DOW 1 0 9 8 7 6 5 4 3 2 1 0 ISBN MHID 978-0-07-813672-6 0-07-813672-5 Vice President & Editor-in-Chief: Brent Gordon Vice President of EDP: Sesha Bolisetty Editorial Director: Stewart Mattson Sponsoring Editor: Dick Hercher Marketing Manager: Sankha Basu Editorial Coordinator: Rebecca Mann Project Manager: Erin Melloy Design Coordinator: Brenda A. Rolwes Cover Designer: Studio Montage, St. Louis, Missouri Production Supervisor: Sue Culbertson Media Project Manager: Balaji Sundararaman Compositor: MPS Limited, A Macmillan Company...
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