Chapter 1 Flashcards
What is the major purpose of accounting systems?
To take economic events and transactions and present the information to help decision makers.
Management accounting
Providing information to help managers make decisions.
Financial accounting
Records business transactions and provides financial statements.
Cost accounting
Provides information related to purchase and use of resources
Cost management
Plan and control costs
Value chain
Business functions that add value to product/service.
Value chain components
1- research and development
2- Design
3-production
4- marketing
5- distribution
6- customer service
4 aspects to Enhance value of management accounting system
Customer driven, low cost high efficiency, analyzing value and supply chain, continuous improvement.
Planning, control, feedback
Planning: plan
Control: implement the plan and evaluate.
Feedback:evaluate with goal to improve.
Accounting tools for planning and control
Budgeting, management by exception, variance analysis.
3 functions of management accounting
Scorekeeping, attention directing, problem solving.
Key management accounting guidelines
Cost benefit approach, behavioural and technical considerations, different costs for different purposes.
Corporate structure and governance
Line management and staff management.
Accounting positions
CFO,CIO, treasurer, controller.
What is Professional ethics
Adherence to rules of professional conduct, enabling competencies, assessing the situation, integrative analysis, conclude advise and communicate.
