Foundations of Management Accounting: concepts, users and cost classification

Apuntes

Part I Introduction to Management Accounting • Scope and objectives of Management Accounting • Introduction to cost terms, concepts and classifications Colin Drury Management and Cost Accounting, 7th edition • Chapter 1 • Chapter 2 2 3 Definition of accounting The process of identifying,measuring and communicating financial and non-financial information to help its users to make good decisions Users of accounting information: External parties outside the organization Internal parties within the organization 4 External parties outside the organization Internal parties within the organization Management accounting Financial accounting • Reports to those outside the organization • Is legally required • Must follow GAAP (for instance financial accounting data should be objective and verifiable) • Prepares summarized data for the whole of the business • Reports what has happened in the past in the organization • Its report frequency is annual, and less detailed accounts are published semi-annually 5 Major differences between Financial and Management accounting: Financial accounting • Reports to those inside the organization • Is entirely optional (only if benefits > costs of collecting ...