Managerial Accounting Midterm Notes

ACTG 2020-Managerial accounting midterm notes

Chapter 1 chronicle: information for decision making
Four step framework for decision making
Step 1: specify the problem, including the decision makers goals
Step 2: identify options
Step 3: measure benefits (advantages) and costs (disadvantages) to watch out the value (benefits reaped less costs incurred) of each option
Step 4: Make the decision, choosing the option with the highest value

Differentiate between Financial score and Managerial accounting system
Characteristic| Financial Accounting| Managerial Accounting|
Primary users| Persons external to the organization| Persons internal to the organization|
judicature principles| Generally accepted accounting principles (GAAP), as established by bodies such as the Accounting Standards Board (AcSB) and the International Accounting Standards Board| Evaluating the costs and benefits of decision options. In most situations, entropy are collected, reported, and analyzed as needed and do not conform to specified standards.



|
Unit of analysis| Usually, the entire organization, with curb disclosures about individual lines of business| Varies, with the decision context dictating the relevant unit of analysis|
Emphasis| Information reliability, sometimes at the expense of relevance| Information relevance|
Periodicity| rooted(p) periodicity, with external reports usually released at the end of each ass| Often generated on an as?needed basis|
Types of data considered| Past financial data| All available data, including estimates on future performance, whether financial or nonfinancial|

Role of ethics in Decision Making
Step in Decision modeling| How Ethical Considerations Might Influence This Step|
What Is the Problem?| performing in an ethical manner is an important factor in the goals of most individuals and is the stated policy for numerous organizations. Thus, ethics work how we frame decision problems.|
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