Introduction to management

Question 1

Define management accounting

Answer 1

A continuous improvement process that involves planning, designing, measuring, and operating nonfinancial and financial information systems. This process helps guide management action, motivates behavior, and creates cultural values necessary to achieve an organization’s operating objectives.”

Question 1

What is management accounting easy

Answer 1

It is the processes and techniques that focus on the effective use of resources to support managers in their tasks of enhancing customer value and shareholder value.

Question 2

3 ways management add value to organisation -

Answer 2

1. providing info for decision and planning
2. motivating manager and other employee towards their gaols
3. assessing the organisations competitive positions

Question 3

Financial accounting defination

Answer 3

The practice of preparing and reporting accounting information for parties outside the organization

Question 4

3 major difference of MA and FA

Answer 4

• info in financial statements suits the needs of all the users as it is the same info for everybody .- info in the statements is strategically relevant and not accessible and available to the public - just for the managers’ eyes to manage the business

The reporting interval time is specific in management accounting

No legal obligations to produce management accounting reports so a similar report for one company can be different to another whereas in financial a/c they cannot do so.

Question 5

Differences in defination

Answer 5

Financial accounting predicts the past whereas management accounting is more focused on forward thinking prepping plans and so offers estimates on management accounting reports. Financial a/c is measured in monetary terms and info is readily available whereas in management a/c info is financial and non-financial, so it requires more info.

Question 6

role of management accountants

Answer 6

1. problem solving
2. score keeping
3. attention directing

Question 7

how management affect strategic decisions

Answer 7

1. developing strategy
2. building resource and capabilities
3. implementing strategies

Question 8

4 professional ethics.

Answer 8

competence
confidentiality
integrity
objectivity