Accounting

Chapter 1 Notes

Managerial Accounting

Definitions:

1. Managerial Accounting

– provides useful information for management to make decisions

2. Managerial vs. Financial

| | |Managerial |Financial |

|a. |Users |Internal |External |

|b. |Type of reports |Internal reports as needed |F/S and quarterly and annual reports |

|c. |Reason |Specific |General |

|d. |Contents |Segments or units, |Aggregated and in accordance with GAAP |

| | |Relevant to operations | |

|e. |Verification |Non-audited |Audited |

3. Functions of Management

a. Planning/organizing – looking ahead by establishing company objectives and performing only activities that add value to the business.

b. Directing/leading – coordinating of human resources and directing detailed activities to run smoothly

c. Controlling – measuring and monitoring, insuring that planned goals and activities are being followed or achieved by the use of budgets, responsibility reports and performance evaluations.

4. Types of Organizations

a. Manufacturing firms – purchase raw materials from suppliers and convert them into finished products.

b. Merchandising...