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    Management Accounting:: Major Differences: Legal Requirements, Focus On, Bodies, Time Dimension, Report Frequency

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    Olga Sîrbu
    Accounting involves identifying, measuring, and communicating financial information to internal and external users of a business. Management accounting provides future-oriented information to help managers make better decisions and improve operations, while financial accounting focuses on the whole business and provides externally reported information semi-annually to meet legal requirements. The decision making process involves planning by setting objectives and considering alternatives, selecting a course of action, implementing it, and controlling by comparing actual outcomes to plans and responding to any differences. Factors that influence competition include globalization, privatization, changing customer preferences, and e-commerce. Customer satisfaction is directly affected by cost efficiency, quality, timeliness, innovation, and continuous improvement. A cost and management accounting system allocates costs, provides

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    Management Accounting:: Major Differences: Legal Requirements, Focus On, Bodies, Time Dimension, Report Frequency

    Uploaded by

    Olga Sîrbu
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    Accounting involves identifying, measuring, and communicating financial information to internal and external users of a business. Management accounting provides future-oriented information to help managers make better decisions and improve operations, while financial accounting focuses on the whole business and provides externally reported information semi-annually to meet legal requirements. The decision making process involves planning by setting objectives and considering alternatives, selecting a course of action, implementing it, and controlling by comparing actual outcomes to plans and responding to any differences. Factors that influence competition include globalization, privatization, changing customer preferences, and e-commerce. Customer satisfaction is directly affected by cost efficiency, quality, timeliness, innovation, and continuous improvement. A cost and management accounting system allocates costs, provides

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    Accounting involves identifying, measuring, and communicating financial information to internal and external users of a business. Management accounting provides future-oriented information to help managers make better decisions and improve operations, while financial accounting focuses on the whole business and provides externally reported information semi-annually to meet legal requirements. The decision making process involves planning by setting objectives and considering alternatives, selecting a course of action, implementing it, and controlling by comparing actual outcomes to plans and responding to any differences. Factors that influence competition include globalization, privatization, changing customer preferences, and e-commerce. Customer satisfaction is directly affected by cost efficiency, quality, timeliness, innovation, and continuous improvement. A cost and management accounting system allocates costs, provides

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    16 views2 pages

    Management Accounting:: Major Differences: Legal Requirements, Focus On, Bodies, Time Dimension, Report Frequency

    Uploaded by

    Olga Sîrbu
    Accounting involves identifying, measuring, and communicating financial information to internal and external users of a business. Management accounting provides future-oriented information to help managers make better decisions and improve operations, while financial accounting focuses on the whole business and provides externally reported information semi-annually to meet legal requirements. The decision making process involves planning by setting objectives and considering alternatives, selecting a course of action, implementing it, and controlling by comparing actual outcomes to plans and responding to any differences. Factors that influence competition include globalization, privatization, changing customer preferences, and e-commerce. Customer satisfaction is directly affected by cost efficiency, quality, timeliness, innovation, and continuous improvement. A cost and management accounting system allocates costs, provides

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    of 2

    CH.

    01

    Accounting- the process of identifying, measuring and communicating economic information to permit
    informed judgements and decisions by users of information.

    User of accounting information:

    1. Internal users within the organization;


    2. External such as SH, creditors – outside the organization
    Management accounting vs. Financial Accounting
    Management accounting:
    - help internal users to make better decision ad improve the efficiency and effectiveness of
    operations;
    - Provides info relating to different parts of the business;
    - Future oriented;
    - Reports often published on a daily basis.
    Financial accounting:
    - provides information to external users;
    - Focus on the whole business;
    - Reports are published semi-annually.
    Major differences: legal requirements, focus on, bodies, time dimension, report frequency

    Decision making process


    Planning process:
    1. Identify the objectives;
    2. Search for alternative courses of action;
    3. Select appropriate courses of action;
    4. Implement the decisions;
    Control process:
    5. Compare actual and planned outcomes;
    6. Respond to divergences from plan
    Factors that influenced the changes in the competitive environment:
    - Globalization of the world trade;
    - Privatization of government-controlled companies and deregulation in various industries;
    - Changing customer preferencies in accordance with the level of service in cost, quality , delivery
    and the choice of new products;
    - The emergence of e-business
    Factors that directly affect customer satisfaction;
    - Cost efficiency;
    - Quality;
    - Time and innovation
    - Continuous improvement
    Functions of a cost and management accounting system:
    - Allocate cost between cost of goods sold and inventories for internal and external profit
    reporting and inventory valuation;
    - Relevant information to help managers make better decisions;
    - Provide info for planning, control and performance measurement.

    CH.02
    Cost- amount of resources ( in monetary terms) required for obtaining a certain object.
    Cost object: any activity for which a separate measurement of costs is required. Cost of new product,
    the cost of operating a sales outlet and the cost of operating a specific machine.
    Some costs and revenues in the short term are not relevant for decision-making: if you wish to
    determine the costs of driving to work in your own car or using public transport, the cost of the road
    fund taxation licence and insurance will remain the same for both alternatives, assuming that you intent
    to keep your car for leisure purposes. Cost that remain unchanged for all alternatives are not relevant
    for decision-making.
    Cost information is required for:
    - Allocate cost between cost of goods sold and inventories for internal and external profit
    reporting and inventory valuation;
    - Relevant information to help managers make better decisions;
    - Provide info for planning, control and performance measurement.
    Direct costs- costs that can be specifically and exclusively identified with a particular cost object:
    1. Materials;
    2. Labour costs
    Indirect cost- cannot be identified specifically and exclusively with a given cost object (indirect
    materials, indirect labour and expenses).
    In a manufactory organization – 3 types of overheads:
    1. Manufacturing overheads
    2. Distribution overheads
    3. Administrative overheads
    Cost allocation- process of assigning cost to cost objects when a direct measure of resources
    consumed by those objects is not possible or not convenient.
    Product costs: are identified with 1. goods purchased or 2. Goods produced
    Attached to inventory evaluation
    Period costs: 1.do not increase the value of the product; 2. They are not directly related to the
    product. Not attached to inventory evaluation

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