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Accounting for Management: Concepts and Tools

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Accounting for Management: Concepts and Tools Accounting for Management: Concepts and Tools Accounting for Management: Concepts and Tools Copyright 2014 by DELTACPE LLC All rights reserved. No part of this course may be reproduced in any form or by any means, without permission in writing from the publisher. The author is not engaged by this text or any accompanying lecture or electronic media in the rendering of legal, tax, accounting, or similar professional services. While the legal, tax, and accounting issues discussed in this material have been reviewed with sources believed to be reliable, concepts discussed can be affected by changes in the law or in the interpretation of such laws since this text was printed. For that reason, the accuracy and completeness of this information and the author's opinions based thereon cannot be guaranteed. In addition, state or local tax laws and procedural rules may have a material impact on the general discussion. As a result, the strategies suggested may not be suitable for every individual. Before taking any action, all references and citations should be checked and updated accordingly. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert advice is required, the services of a competent professional person should be sought. —-From a Declaration of Principles jointly adopted by a committee of the American Bar Association and a Committee of Publishers and Associations. Course Description A primer on the basic theoretical concepts and the practical procedures of financial record keeping and reporting, and the use of financial and cost data in managerial decision making. It provides an understanding and working knowledge of the fundamentals of financial and managerial accounting that can be put to practical application in day-to-day jobs of managers. It also concentrates on providing a working vocabulary for communication. Topics include accounting principles and reporting trends, accounting conventions and systems, interpretation and analysis of financial statements; cast flow statement; break-even analysis; activity-based costing (ABC); responsibility accounting; budget for profit planning; short-term and long-term investment decision making. A list of computer software for accounting, ABC, and budgeting is presented. Field of Study Accounting Level of Knowledge Basic to Intermediate Prerequisite None Advanced Preparation None Table of Contents Chapter 1: Introduction to Accounting ................................................................................. 1 Learning Objectives: .......................................................................................................................1 Nature and Scope of Accounting .....................................................................................................1 Accounting: The Basis for Decision Making .......................................................................................................... 2 The Major Areas of Accounting .......................................................................................................2 Private Accounting ................................................................................................................................................ 2 Public Accounting.................................................................................................................................................. 2 Governmental Accounting .................................................................................................................................... 3 Major Accounting Rule-Making Organizations .................................................................................3 American Institute of CPAs ................................................................................................................................... 3 Financial Accounting Standards Board (FASB) ...................................................................................................... 3 Securities and Exchange Commission (SEC) .......................................................................................................... 4 The International Accounting Standards Board (IASB) ......................................................................................... 4 Public Company Accounting Oversight Board (PCAOB) ........................................................................................ 4 Governmental Accounting Standards Board (GASB) ............................................................................................ 4 Other Organizations .............................................................................................................................................. 4 The Global Trends and Developments in Financial Reporting ...........................................................5 The Basic Accounting Principles ......................................................................................................6 Historical Cost ....................................................................................................................................................... 6 Conservatism ........................................................................................................................................................ 6 Consistency ........................................................................................................................................................... 6 Comparability ........................................................................................................................................................ 6 Going Concern ...................................................................................................................................................... 6 Matching ............................................................................................................................................................... 7 Realization ............................................................................................................................................................ 7 Accrual .................................................................................................................................................................. 7 Materiality ............................................................................................................................................................ 7 Disclosure .............................................................................................................................................................. 7 Objectivity ............................................................................................................................................................. 7 Timeliness ............................................................................................................................................................. 7 Relevant ................................................................................................................................................................ 8 Stable Dollar .......................................................................................................................................................... 8 Accounting Period ................................................................................................................................................. 8 Entity ..................................................................................................................................................................... 8 The Concept of the Business Entity .................................................................................................8 Sole Proprietorship ............................................................................................................................................... 8 Partnership ........................................................................................................................................................... 9 Corporation ........................................................................................................................................................... 9 Presenting Accounting Information through Financial Statements ...................................................9 Balance Sheet........................................................................................................................................................ 9 Owners’ Equity .................................................................................................................................................... 10 Income Statement .............................................................................................................................................. 10 Statement of Cash Flows .................................................................................................................................... 11 Chapter 1 Review Questions ............................................................................................................................... 12 Chapter 2: Understanding the Financial Statements .........................................................
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