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Prepared by Diane Tanner University of North Florida

Chapter 1. Introduction to Managerial Accounting. Prepared by Diane Tanner University of North Florida. Comparing Managerial and Financial Accounting. Financial Accounting Provides information to stockholders, creditors, government agencies, customers . Managerial Accounting

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Prepared by Diane Tanner University of North Florida

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  1. Chapter 1 Introduction to Managerial Accounting Prepared by Diane Tanner University of North Florida

  2. Comparing Managerial and Financial Accounting Financial Accounting • Provides informationto stockholders,creditors, government agencies, customers Managerial Accounting • Provides informationfor managers and other internal users • Aids planning and controlling operations

  3. Compared to Financial Accounting, How Does Managerial Accounting Differ? • Managerial Accounting is….. • More flexible • Not GAAP --- Doesn’t have to meet requirements of SEC, GAAP, IRS • Forward-lookingrather than backward emphasis • More timely, may sacrifice accuracy • Emphasizes segments and products of an organization rather than the company as a whole • Emphasizes both quantitative and qualitative considerations

  4. Goal of Managerial Accounting Primary goal To provide information for internal decision making Tools to achieve the goal

  5. Planning - A Managerial Accounting Tool • The communication of a company’s goals • Guides decisions • Financial plans are called ‘Budgets’ • Identifies sources and uses of resources

  6. Controlling - A Managerial Accounting Tool • Measuring performance • Comparing performance with budgets • Taking action • What performance is measured? • Performance of managers • Performance of a segment, product, division

  7. Major impact on the value chain Value chain includes all the ‘value-adding’ activities of a company, including Acquiring materials Operations/production of products or services Selling and marketing Delivery to customers and service/maintenance Related "support activities" including: administration, human resources, R&D, etc. Shift from labor to machinery Effects of Technology on Manager Decisions Increases a company’s risk

  8. The End

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