Introduction to Accounting 311

1. Introduction to Accounting 311 • Student information sheets • Syllabus • Chapter 1 in text • Words of wisdom for life & business

2. My Office Fees* Answers: 5 cents Solutions: 25 cents Advice: Priceless * Effective 1/1/2009

3. Advice • Four things you need for business success: • 1) Hard work • 2) Network of relationships • 3) A little luck • 4) Reasonable intelligence

4. Cell Phones • Turn cell phones OFF before class • 1st offense = $1 • 2d offense = $5 • You cannot afford a 3d offense. • During tests = $20/offense

5. Accounting  Is hard to do/understand without proper training/knowledge.  takes extensive exposure/practice to learn.

6. Accounting Areas (“Specialties”) • 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!

7. Cost versus Managerial Accounting • The same? • Managerial Accounting: • Product/service costing • Planning & Control • Decision making

8. Financial versus ManagerialAccounting What is the difference between the two?

9. Strategic Cost Management Developing strategy Building resources and capabilities Implementing strategy

10. Planning and Controlling Management Decision Management Accounting System Planning Budgets Feedback Accounting System Control Performance Evaluation Performance Reports

11. Planning and Controlling What is planning? Setting goals Predicting results Deciding how to attain goals

12. Planning and Controlling What is control? Deciding and taking actions Deciding on performance evaluation and feedback

13. 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.

14. 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.

15. Performance Report Example Boone Shop, July 2008 BudgetActualVariance Revenues $59,000 $60,000 $1,000 F Cost of goods sold 42,000 43,400 1,400 U Wages 6,700 7,000 300 U General 1,300 900 400 F Fixed costs 5,000 5,000 0 Operating income $ 4,000 $ 3,700 $ 300 U

16. Key Themes in ManagementDecision Making Customer Focus Value Chain and Supply Chain Analysis Key Success Factors: Cost and Efficiency, Time, Quality, Innovation Continuous Improvement and Benchmarking

17. 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.

18. Typical Value Chain R & D Design Production Management Accounting Marketing Distribution Service

19. 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

20. Professional Ethics (very important to Management Accountants) Competence Integrity Confidentiality Objectivity

21. 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

22. 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