chapter 1 accounting for management.pptx

7/27/2019 Chapter 1 Accounting for Management.pptx

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Chapter 1Accounting forManagement

Ibrahim Sameer (MBA - Specialized in Finance, B.Com Specializedin Accounting & Marketing)


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Information

What is the difference between Data &

Information?


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InformationData is the raw materia for data !rocessin".

Data reate to facts, events and

transections and so forth.

Information is data that has been !rocessed

in s#ch a wa$ as to be meaningful to the

!erson who recei%es it. Information is an$thin"

that is comm#nicated.


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InformationQualities of good information

ood information sho#d be relevant, complete,

accurate (not com!ete$ acc#rate or '

acc#rate)* clear,it sho#d be inspire confidence* it

sho#d be appropriately communicated, its

volumesho#d be mana"eabe* it sho#d be timely

and its cost sho#d be ess than the benefits it

!ro%ides.


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Planning, Control & Decision

MakingPlanning

Information for mana"ement is i+e$ to be #sed for

planning, control and decision making.

,annin" in%o%e estalishing o!ectives and selecting

appropriate strategies to achieve those o!ectives.

,annin" can be short term or long term


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Making"!ectives of organi#ation

An o!ectiveis the intentor aimor goal of

an or"aniation (or an indi%id#a). A strategy

is a possile course of action that mi"ht

enabe an or"aniation (or an indi%id#a) to

achie%e its obecti%es.


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Making$ong term strategic Planning

/on" term strate"ic !annin" aso +nown as

corporate planning* in%o%es seectin"

a!!ro!riate strate"ies so as to !re!are a on"

term !an to attain the obecti%es.


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Making%hort term tactical Planning

Short term tactica !annin" con%ert the

cor!orate !annin" into a series of short

term plans* #s#a$ co%erin" one year*

which reate to sections, functions or

department


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MakingDecision making

Decision ma+in" awa$s in%o%es a choiceet'een alternatives and it is the roe of

the mana"ement acco#ntant to !ro%ide

information so that mana"ement can reach an

informed decision.


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Anthony(s )ie' of Management

ActivityAnthon$ di%ides mana"ement acti%ities into

strate"ic !annin"* mana"ement contro and

o!erationa contro.

Mana"ement contro is concerned with

decisions aout the efficient and

effective use of an organi#ation(s

resources to achie%e obecti%es or tar"et.


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Management Control %ystemA mana"ement contro s$stem is a s$stem

which meas#res and corrects the !erformance

of acti%ities of s#bordinates in order to ma+e

s#re that the obecti%es of an or"aniation are

bein" met and the !ans de%ised to attainthem are bein" carried o#t.


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*ypes of InformationInformation within an or"aniation can be

ana$ed into three e%es ass#med in

Anthon$0s hierarch$ strategic, tactical and

operational.


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*ypes of Information%trategic information is #sed b$ senior

manger. 1"2 ,re!arin" Strate"ic ,an of the

or"aniation.

*actical information is #sed b$ the middle

management 1"2 Month$ %ariance re!ort.

"perational information is #sed b$ 3front+

line( managers 1"2 An$ ro#tine wor+.


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inancial Accounting & Cost &

Management Accountinginancial accounting systems ens#re that the

assets and iabiities of a b#siness are !ro!er$

acco#nted for* and !ro%ide information abo#t !rofits

and so on to sharehoders and other interested

!arties.

Management accounting systems !ro%ide

information s!ecifica$ for the #se of mana"ers

within an or"aniation.


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Management Accounting


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Management AccountingCost Accounts

Cost acco#ntin" and mana"ement acco#ntin"are terms which are often #sed

interchan"eab$. It is not correct to do so. Cost

acco#ntin" is !art of mana"ement acco#ntin".

Cost acco#ntin" !ro%ides a ban+ of data for

the mana"ement acco#ntant to #se.


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Management AccountingCost acco#ntin" is concerned with the

foowin"2

,re!arin" statement (e"2 b#d"et* costin")

Cost data coection

A!!$in" costs to in%entor$* !rod#ct and

ser%ices.


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Management AccountingManagement accounting

It is concerned with the foowin"2

4sin" financia data and comm#nicatin" it as

information to #sers.


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5 & A

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