Introduction to Accounting 311
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Student information sheets
Syllabus
Chapter 1 in text
Words of wisdom for life & business
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My Office Fees*
Answers: 5 cents
Solutions: 25 cents
Advice: Priceless
* Effective 1/1/2009
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Advice
• Four things you need for business success:
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1) Hard work
2) Network of relationships
3) A little luck
4) Reasonable intelligence
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Cell Phones
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Turn cell phones OFF before class
1st offense = $1
2d offense = $5
You cannot afford a 3d offense.
During tests = $20/offense
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Accounting
 Is hard to do/understand without
proper training/knowledge.
 takes extensive exposure/practice to
learn.
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Accounting Areas (“Specialties”)
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Financial
Audit
Managerial
Tax
AIS
Not-for-profit, Governmental
All are interrelated. However, managerial is most important.
Financial gets your foot in the door; managerial is needed in order to
advance to the top of an organization!
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Cost versus Managerial Accounting
• The same?
• Managerial Accounting:
– Product/service costing
– Planning & Control
– Decision making
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Financial versus Managerial
Accounting
What is the difference between the two?
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Strategic Cost Management
Developing strategy
Building resources and capabilities
Implementing strategy
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Planning and Controlling
Management Accounting System
Planning
Budgets
Control
Accounting
System
Performance
Evaluation
Performance
Reports
Feedback
Management Decision
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Planning and Controlling
What is planning?
Setting
goals
Predicting
results
Deciding how
to attain goals
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Planning and Controlling
What is control?
Deciding
and
taking
actions
Deciding on
performance
evaluation
and feedback
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Planning and Controlling
What are budgets?
They are
quantitative
expressions
of a proposed
plan of action.
They aid in the
coordination
and
implementation
of the plan.
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Planning and Controlling
What are performance reports?
These are reports that
compare actual results
with budgeted amounts.
A single report that contains both financial and nonfinancial
measures of performance is called a Balanced Scorecard.
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Performance Report Example
Boone Shop, July 2008
Budget
Revenues
$59,000
Cost of goods sold 42,000
Wages
6,700
General
1,300
Fixed costs
5,000
Operating income $ 4,000
Actual
$60,000
43,400
7,000
900
5,000
$ 3,700
Variance
$1,000 F
1,400 U
300 U
400 F
0
$ 300 U
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Key Themes in Management
Decision Making
Customer Focus
Value Chain
and
Supply Chain
Analysis
Key Success Factors:
Cost and Efficiency,
Time, Quality,
Innovation
Continuous
Improvement
and
Benchmarking
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Value Chain
The term “value chain” refers to the sequence of
business functions in which usefulness is added
to the products or services of an organization.
The term “value” is used because as the usefulness
of the product or service is increased, so is its value
to the customer.
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Typical Value Chain
R&D
Design
Production
Management Accounting
Marketing
Distribution
Service
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3-Key Management Accounting
Guidelines
1. Cost-benefit approach
2. Full recognition of behavioral as well as
technical considerations
3. Using different costs for different purposes
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Professional Ethics
(very important to Management Accountants)
Competence
Integrity
Confidentiality
Objectivity
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Ethical Guidelines
The Institute of Management Accountants (IMA)
is the largest association of management
accountants in the United States.
The IMA has issued a Standards of Ethical
Conduct for Management Accountants.
See Exh. 1-7 in text
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Four- vs. Five-year Program
CMA versus the CPA
Page 843-4 in text gives a very brief outline of
the CMA exam.
IMA web site = http://www.imanet.org
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