...Accounting: Text and Cases Managerial Accounting Anthony, Hawkins and Merchant 13th Edition Garrison, Noreen and Bewer 13th Edition Management Accounting 1 2 Because… 3 4 5 6 ! " # 7 Chapter 15 The Nature of Management Accounting 8 Learning Agenda Describe the differences between financial and management accounting Measurement used in management accounting system Textbook problem exercises 9 Differences Between Financial and Managerial Accounting Financial Accounting 1. Users 2. Time focus 3. Verifiability versus relevance 4. Precision versus timeliness 5. Subject 6. Requirements External persons who make financial decisions Historical perspective Emphasis on verifiability Emphasis on precision Primary focus is on the whole organization Must follow GAAP and prescribed formats Managerial Accounting Managers who plan for and control an organization Future emphasis Emphasis on relevance for planning and control Emphasis on timeliness Focuses on segments of an organization Need not follow GAAP or any prescribed format 10 Accounting Differences Financial External focus Whole organization Historical Quantitative Monetary Verifiable GAAP Formal recordkeeping Managerial Internal focus Segments or divisions Current/projected Quantitative/qualitative Monetary and nonmonetary Timely/reasonable estimate Benefits exceed costs Formal and informal recordkeeping 11 Management vs. Financial accounting ...
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...BACK FLUSH ACCOUNTING 1.0 Introduction Back flush accounting is one of the accounting systems that support Just in Time system. Just in time is the inventory system that produced the required items at the right time and the right place. Accounting was delay the recording of transaction during process is known as back flush accounting. The system is the transaction was only recorded once the product was completed. Back flush accounting is the system that focuses on the output of organization and then work backwards when allocating costs between costs of goods sold and inventories, with no separate accounting for work in progress. According to ACCA article, in back flush accounting costs are not associated with units until they are completed or sold. Back flush accounting is also called delayed costing, as costs are not allocated to production until after events have occurred. From view by other author, back flush accounting is a costing system that omits recording some of all of the journal entries relating to the cycle from purchase of direct materials to the sales of finished goods (Robert, 2011). According to Grahame Steven, Financial Management 2006, an approach called back flush accounting has been developed to meet the requirement of JIT manufacturing which on it is not a sequential tracking system and does not account for individual transaction. Backflush accounting meshes well with Just-In-Time production system because, according to the Tax Shield Education, both...
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...(a) A number of accounting concepts and conventions have been used by the accountant as a guide in preparing the accounts. These concepts and conventions have been derived over the years from the general accounting practices. Critically discuss the purpose of accounting concepts and conventions and its importance and contribution towards preparing the accounting reports. Purpose of Accounting Concepts The main aim for accounting concept is to maintain the uniformity and consistency in accounting records. These concepts constitute the very basic and premise of accounting. All the concepts have been created and developed throughout the years from experience and consequently they are all around acknowledged tenets. Accounting supposition and concept offer the bases in preparing, presenting and displaying even in interpreting general-purpose financial statements. There are some important accounting concepts that support the readiness and preparation of any accounting arrangement or financial statements such as Going Concern Concept, Consistency Concept, Prudence Concept, and Accruals Concepts. For example, Going Concern Concept is a company or organizations will not be going to bankrupt unless there have a confirmation and evidence to the contrary and this is supported by accountants. Purpose of Accounting Conventions An accounting convention refer to regular and common practices which are all around followed in recording and exhibiting accounting data and information...
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...Internship Report On Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ by Syeda Afrina Sarwar ID: 07304063 BRAC Business School BRAC University, Bangladesh August 2011 ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ Submitted By: Syeda Afrina Sarwar ID: 07304063 BRAC Business School Submitted To: ------------------------------------------------Ms. Rahnuma Ahmed Lecturer BRAC Business School BRAC University, Bangladesh August 2011 Letter of Transmittal August 10, 2011 Ms. Rahnuma Ahmed Lecturer BRAC BUSINESS SCHOOL BRAC University 66, Mohakhali Dhaka-1212 Subject: Submission of Internship Report Dear Madam, I am submitting an internship report titled for ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review of Costing Function’ as a part of the requirement of the course. Your guideline has been followed in every aspect of preparing this report. I have really enjoyed working on this project and I hope that my work would meet the level of your expectation. Any query on this report is appreciated. Thank You. Sincerely, Syeda Afrina Sarwar ID:07304063 Acknowledgement It’s difficult for me to thank all of those marvelous people who have contributed something of them to this report. There are of course some very special people who cannot go...
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...Internship Report On Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ by Syeda Afrina Sarwar ID: 07304063 BRAC Business School BRAC University, Bangladesh August 2011 ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function’ Submitted By: Syeda Afrina Sarwar ID: 07304063 BRAC Business School Submitted To: ------------------------------------------------Ms. Rahnuma Ahmed Lecturer BRAC Business School BRAC University, Bangladesh August 2011 Letter of Transmittal August 10, 2011 Ms. Rahnuma Ahmed Lecturer BRAC BUSINESS SCHOOL BRAC University 66, Mohakhali Dhaka-1212 Subject: Submission of Internship Report Dear Madam, I am submitting an internship report titled for ‘Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review of Costing Function’ as a part of the requirement of the course. Your guideline has been followed in every aspect of preparing this report. I have really enjoyed working on this project and I hope that my work would meet the level of your expectation. Any query on this report is appreciated. Thank You. Sincerely, Syeda Afrina Sarwar ID:07304063 Acknowledgement It’s difficult for me to thank all of those marvelous people who have contributed something of them to this report. There are of course some very special people who cannot go...
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...in financial accounting are general-purpose reports, whereas reports prepared in managerial accounting are usually special-purpose reports. 2. Managerial accounting information generally pertains to an entity as a whole and is highly aggregated. 3. Managerial accounting applies to all forms of business organizations. 4. Determining the unit cost of manufacturing a product is an output of financial accounting. 5. Managerial accounting internal reports are prepared more frequently than are classified financial statements. 6. The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity. 7. The Sarbanes-Oxley Act replaces generally accepted accounting principles in a manufacturing company. 8. Controlling is the process of determining whether planned goals are being met. 9. Decision-making is an integral part of the planning, directing, and controlling functions. 10. Direct materials costs and indirect materials costs are manufacturing overhead. 11. Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead. 12. Raw materials are equal to direct materials minus indirect materials. 13. Raw materials that can be conveniently and directly associated with a finished product are called materials overhead. ...
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...MANAGEMENT ACCOUNTING Introduction: Accounting may be broadly classified into two categories – accounting which is meant to serve all parties external to the operating responsibility of the firms and the accounting which is designed to serve internal parties who take care of the operational needs of the firm. The first category which is conventionally referred to as financial accounting, looks to the interest of those who have primarily a financial stake in the organization’s affairs – creditors, investors, employees etc. On the other hand the second category of accounting is primarily concerned with providing information relating to the conduct of the various aspects of a business like cost or profit associated with some portions of business operations to the internal parties viz., management. This category of accounting is called as Management accounting. In order to perform the primary task of decision making managers of business enterprises need information about the past, present and future in the functional areas of management such as personnel, finance, marketing and production. Right decision making has to be based on quantitative and qualitative information. The management thus constantly needs accounting information to base its decisions upon. Thus management accounting provides the information needed by management personnel. Definition: The Institute of Chartered Accountants of England has defined management accounting as: “Any form of accounting which enables...
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...in financial accounting are general-purpose reports, whereas reports prepared in managerial accounting are usually special-purpose reports. 2. Managerial accounting information generally pertains to an entity as a whole and is highly aggregated. 3. Managerial accounting applies to all forms of business organizations. 4. Determining the unit cost of manufacturing a product is an output of financial accounting. 5. Managerial accounting internal reports are prepared more frequently than are classified financial statements. 6. The management function of organizing and directing is mainly concerned with setting goals and objectives for the entity. 7. The Sarbanes-Oxley Act replaces generally accepted accounting principles in a manufacturing company. 8. Controlling is the process of determining whether planned goals are being met. 9. Decision-making is an integral part of the planning, directing, and controlling functions. 10. Direct materials costs and indirect materials costs are manufacturing overhead. 11. Manufacturing costs that cannot be classified as direct materials or direct labor are classified as manufacturing overhead. 12. Raw materials are equal to direct materials minus indirect materials. 13. Raw materials that can be conveniently and directly associated with a finished product are called materials overhead. ...
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...CHAPTER 14 Managerial Accounting ASSIGNMENT CLASSIFICATION TABLE Brief Exercises 1 A Problems B Problems Study Objectives *1. Explain the distinguishing features of managerial accounting. Identify the three broad functions of management. Define the three classes of manufacturing costs. Distinguish between product and period costs. Explain the difference between a merchandising and a manufacturing income statement. Indicate how cost of goods manufactured is determined. Explain the difference between a merchandising and a manufacturing balance sheet. Identify trends in managerial accounting. Prepare a worksheet and closing entries for a manufacturing company. Questions 1, 2, 3 Do It! 1 Exercises 1 *2. 4, 5, 6, 7, 8 11, 12 2, 3 1 *3. 4, 5, 7 2 2, 3, 4, 5, 6 3, 4, 5, 7, 13 8, 12, 13, 14, 15, 17 1A, 2A 1B, 2B *4. 13 6 2 1A, 2A 1B, 2B *5. 9, 14 3A, 4A, 5A 3B, 4B, 5B *6. 15, 16, 17, 18 8, 10, 11 3 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 14, 15, 16, 17 3A, 4A, 5A 3B, 4B, 5B *7. 10, 19, 20, 21 9 3A, 4A 3B, 4B *8. 22, 23, 24 25, 26 27, 28, 29 12 4 18 *9. 19 6A *Note: All asterisked Questions, Exercises, and Problems relate to material contained in the appendix to the chapter. Copyright © 2011 John Wiley & Sons, Inc. Kimmel, Accounting, 4/e, Solutions Manual (For Instructor Use Only) 14-1 ASSIGNMENT CHARACTERISTICS TABLE Problem Number 1A Difficulty Level Simple Time Allotted (min.) 20–30 Description Classify manufacturing costs into different...
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...FICO: SAP FICO Stands for FI (Financial Accounting) and CO (Controlling). SAP FICO is the important module of ERP and both FI and CO modules stores the financial transactions data. ◾SAP FI is the important module of all SAP implementations ◾SAP FI (Financial Accounting) is used for external reporting i.e. Balance sheet, Profit and Loss statements ◾SAP FICO Module integrates with various other SAP Modules such as MM (Materials Management), SD (Sales and Distribution), PP (Production Planning), PM (Plant Maintenance), and PS (Project Systems). ◾SAP FI (Financial Accounting) Module receives postings from various other modules such as Materials Management, Sales and Distribution, Human Resource) through integration. ◾All accounting-relevant transactions which are made in Logistics (LO) are posted real-time to Financial Accounting by automatic account determination. This data can also be passed on to Controlling (CO). SAP FI Modules contains the following sub-modules ◾General Ledger accounting ◾Accounts Receivables ◾Accounts Payable ◾Asset Accounting ◾Bank Accounting ◾Consolidation ◾Special Purpose Ledger ◾Travel Management General Ledger Accounting: - The general ledger accounting is to provide a complete report for external and internal accounting i.e. Accounts, Journals, Monthly debits and Credit, Balance sheet and Recording all business transactions. Accounts Payable: - The Accounts Payable records and manages all accounting data related to vendors Accounts Receivable:...
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...Q1. (a) “Managerial accounting is a field of accounting that provides economic information for all interested parties.” Do you agree? Explain. No, I don’t. Managerial accounting provides economic and financial information for managers and other internal users but not for all interested parties. (b) Joe Delong believes that managerial accounting serves only manufacturing firms. Is Joe correct? No, he isn’t. Managerial accounting can be serves to all kind of business for making a decision, so it has not necessary to serve only manufacturing firms. Q2. Distinguish between managerial and financial accounting as to (a) primary users of reports, (b) types and frequency of reports, and (c) purpose of reports. The primary users of managerial accounting are managers and officers. The reports usually come out as frequent as needed. Their purposes are for making specific goals. On the other hand, the users of financial accounting are stockholders, creditors, and regulators. The reports usually come out quarterly and annually. Their purposes are usually generally. Q3. How do the content of reports and the verification of reports differ between managerial and financial accounting. The content of reports of the managerial accounting pertains to subunits of the business, and they are very detailed. The content extends beyond double-entry accounting to any relevant data, and the standard is relevance to decisions. The content usually has no independent audits. On the other hand,...
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...of fixed assets and cost determination, and preparing consolidated financial statements. Other topics include the professional responsibilities of CPAs, deferred taxes, cash flow statements, balance sheet preparation, restructuring of troubled debt, and the intricacies of comprehensive income. Week 1 - Topic 1: Reporting Issues Objectives Differentiate among the services provided by auditors. Explain procedures for reporting accounting changes and error corrections. Describe the professional responsibilities of accountants in financial reporting. Compare and contrast the forms of business structure. Explain the methodology used to determine deferred taxes. Materials SUPPLEMENT: Week One Content Outline SUPPLEMENT: Week One Mind Map SUPPLEMENT: Week One Student Road Map SUPPLEMENT: Sample Final Exam EBOOK COLLECTION: Auditing and Assurance Services, Ch. 1 EBOOK COLLECTION: Intermediate Accounting, Ch. 19 EBOOK COLLECTION: Intermediate Accounting, Ch. 22 EBOOK COLLECTION: Advanced Accounting, Ch. 7 EBOOK COLLECTION: Financial Accounting Theory and Analysis, Ch. 17 Assessment Individual Assignment: CPA Report As the CPA for a large organization, your manager has asked you to provide information to outside CPAs who are examining a subsidiary that has been set up as a corporation. As part of their review, the CPAs have asked you to provide them with the following explanations: The methodology used to determine deferred taxes The...
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...Cost Accounting (Assignment – 1) Quaid-i-Azam School of Management Sciences, Quaid-i-Azam University, Islamabad Fall Semester 2012 Course: Course Instructor: Class: Cost Accounting Wasim Abbas Shaheen BBA – III (A) Assignment No 1: Instructions for Assignment: This is an individual assignment. The assignment should be hand written. All the students are advised to submit their assignments on maximum 14th of October, 2012 (Monday). There will be no late submission of the assignments. The assignments will be collected in the class at start and after that no assignment will be accepted. Q1: Define the following terminologies: a. Cost Accounting b. Financial Accounting c. The organizational Chart (Also draw it graphically) d. Treasurer & Controller (Also write down their functions) Q2 (a): Write down the similarities of cost accounting and financial accounting? Q2 (b): What are the difference between cost accounting and financial accounting? Q2 (c): What is the concept of management in cost accounting and explain its different levels and functions? Q3 (a): Define cost, expenses and expenditures and also write down the main differences between these three terms? Q3 (b): There are 4 broad categories of costs in cost accounting. Explain in detail all these categories and their sub-categories with practical examples? 1|Page Cost Accounting (Assignment – 1) Q4:Alpha Company has the following information available for the month of February-2012: Items Sales Indirect Labor Cost...
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...people who had been so easy to let us understand what we needed from time to time for completion of this report. We want to express our special gratitude towards Ma’am Rafia Ayub of Cost Accounting, for giving us such a unique project. CHAPTER O5: CLASSIFICATION OF COST Cost can be classified into two categories i.e. product cost and period cost. 5.1.1 Product cost Product cost includes; • Direct material • Direct labor • Factory overheads All elements of product cost are already stated above. 5.1.2 Period cost It consists of all the cost related to Marketing, Selling and Administrative...
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...Chapter 1--Managerial Accounting Concepts and Principles Key 1. Accounting is an information system that provides essential data about the economic activities of an entity to various users to aid them in making informed judgments and decisions. TRUE 2. Managerial accounting reports are prepared according to generally accepted accounting principles. FALSE 3. Managerial accounting information includes both historical and estimated data. TRUE 4. Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change. TRUE 5. A diagram of the operating structure of an organization is called an organization chart. TRUE 6. In most business organizations, the chief accountant is called the treasurer. FALSE 7. In most business organizations, the chief accountant is called the controller. TRUE 8. A staff department or unit is one that provides services, assistance, and advice to the departments with line or other staff responsibilities. TRUE 9. The vice presidents of production and sales and the controller hold line positions in most large organizations. FALSE 10. A staff department has no direct authority over a line department. TRUE 11. The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting. TRUE 12. Managerial...
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