Acc-Hc561

Discussion Question #1 - Due by Thursday, January 12:

Describe the conflict between the use of cost accounting to generate information for reporting and its use to generate information for management. Discuss, explain and give examples.

Please reply to this posting and answer within your posting to this thread.

Accounting is a system for providing financial information. It is generally broken down into two principal elements: financial accounting and managerial accounting. The financial accounting aspect of accounting is a formalized system designed to record the financial history of the health care organization. The financial accountant is simply a historian who uses dollar signs.The managerial accountant looks forward; the financial accountant looks backward. Instead of reporting on what has happened, the managerial accountant provides financial information that might be used for making improved decisions regarding the future.

Cost accounting, is the process of determining the cost of a specific output or activity. Although it is sometimes confused with the managerial accounting function, cost accounting information is used by decision makers both inside and outside an organization.

Managerial accounting, or management accounting, is a set of practices and techniques aimed at providing managers with financial information to help them make decisions and maintain effective control over corporate resources. For example managerial accounting answers such questions as below:

• The examples What is the company's average cost per unit of labor (enterprise wide or within specific departments)?

• How many dollars in sales does each marketing dollar bring in?

• What is the required rate of return to make a new investment worthwhile?

• Which activities require the greatest expenditures and which earn the greatest profits (and how can the organization maximize the former and minimize the latter)?

Cost and managerial accounting differ in that...