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Study Unit 1.1

Management accounting provides information to managers for planning, directing operations, and decision making. It involves setting goals and objectives, identifying actions to achieve them, monitoring plans, and providing feedback. The basic functions of management are planning, organizing, leading, and controlling, which managers engage in through a continuous decision making process. Management accounting differs from financial accounting in that it provides internal, non-financial information to managers and emphasizes future-oriented detailed reports, while financial accounting provides external, historical financial information to stakeholders. Cost accounting bridges financial and managerial accounting by deriving reports from the same database originally created for financial reporting.

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Vee-Jaye Virgino
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22 views

Study Unit 1.1

Management accounting provides information to managers for planning, directing operations, and decision making. It involves setting goals and objectives, identifying actions to achieve them, monitoring plans, and providing feedback. The basic functions of management are planning, organizing, leading, and controlling, which managers engage in through a continuous decision making process. Management accounting differs from financial accounting in that it provides internal, non-financial information to managers and emphasizes future-oriented detailed reports, while financial accounting provides external, historical financial information to stakeholders. Cost accounting bridges financial and managerial accounting by deriving reports from the same database originally created for financial reporting.

Uploaded by

Vee-Jaye Virgino
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Management Aounting

Management - the planning and integration of effort, GOALS vs. OBJECTIVES


judicious use of resources, motivation of people, and
Goal - outcome Objectives - actions to take
the provision of leadership in order to guide an
to achieve the goal
organization toward its goals and objectives in an
efficient manner
SMART
Specific
Basic functions. PDCA cycle
Measurable
(deming wheel) and decision
Attainable
making
Realistic
BASIC FUNCTIONS PDCA CYCLE Time-bound

• to carry out the management functions,


Planning Plan managers are engaged in a continuous process of
Organizing Do Decision making making decisions. Managers decide when they plan,
Leading Check organize, lead and control. They plan when they
Controlling Act organize and by leading they are controlling.

• management = decision making

MANAGEMENT PROCESS

Planning Controlling Decision making


• setting objectives • monitoring a plan's implementation • choosing among
• identify ways to achieve • feedback is information used to competing alternatives
the objectives evaluate or correct implementation
of a plan

MANAGEMENT ACCOUNTING VS. FINANCIAL ACCOUNTING

MANAGEMENT ACCOUNTING FINANCIAL ACCOUNTING


• internal users (managers) • external users stockholders and creditors
• no mandatory rules for preparing reports • must follow GAAP when preparing FS
• financial and non financial information • financial information
• emphasize future • historical orientation
• detailed info about product line, departments, etc • information about overall firm performance

• The accounting system should be flexible Cost Accounting in Relation to


enough to supply different information for Management and Financial
different users and different purposes. Accounting
Frequently the reports of both management
Financial Cost Managerial
accounting and financial accounting are derived
Accounting Accounting Accounting
from the same database, which was originally
Information Data Information
established to support the reporting
requirements of financial accounting.
• Cost accounting acts as a bridge
between financial accounting and
management accounting.

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