Intro to MA, cost terms, concepts & classifications

Question 1

What is MA?

Answer 1

The process of identifying, measuring and communicating economic info for the purpose of permitting informed judgements & decisions.

Question 2

Users of Accounting

Answer 2

1) Managers- Info to help with decision making.
2) Shareholders- For investing.
3) Employees- For wages and employability
4) Creditors- Firm’s ability to pay back loans.
5) Government- Taxes and Statistics

Question 3

Types of users

Answer 3

1) Internal- Managers, employees

2) External- Shareholders, Creditors, Government.

Question 4

Management vs Financial Accounting.

Answer 4

Internal v External
Discretional v Regulated(GAAP, IFRS, IAS)
Future/Budget v Historic
Individual segments v Whole business
Frequent Reports v Annual

Question 5

The Decision making process consists of?

Answer 5

ID objectives- Search for alternatives-Select action-implement[planning] — Compare planned v actual- Respond to divergencies.[control]