What types of cost information are reported to support managerial purposes and decisions

In a world where business units are becoming more self sufficient and knowledgeable about managing their overall processes through the use of technology, it becomes more important to identify the value of data and its interaction. The ability to break down concepts and understand how things work enables business units to build and manage applications on their own. Alternatively, this knowledge allows executives to understand how disparate business units function and what IT needs in order to do their jobs and develop effective end user applications. With the increasing ability to deploy solutions without the aid of IT, organizations may be asking, why is knowing about data and its infrastructure important?

What types of cost information are reported to support managerial purposes and decisions

Financial Accounting Introduction The purpose of accounting is to provide the information that is needed for sound economic decision making. The main purpose of financial accounting is to prepare financial reports that provide information about a firm's performance to external parties such as investors, creditors, and tax authorities.

Managerial accounting contrasts with financial accounting in that managerial accounting is for internal decision making and does not have to follow any rules issued by standard-setting bodies.

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CPA's The primary accounting professional association in the U. To be eligible to become a CPA, one needs an undergraduate degree in any major with credit hours of course work.

Of these credit hours, a minimum of 36 credit hours must be in accounting. Accounting Standards In order that financial statements report financial performance fairly and consistently, they are prepared according to widely accepted accounting standards.

Generally Accepted Accounting Principles are those that have "substantial authoritative support". Cash Method Many small businesses utilize an accounting system that recognizes revenue and expenses on a cash basis, meaning that neither revenue nor expenses are recognized until the cash associated with them actually is received.

Most larger businesses, however, use the accrual method. Under the accrual method, revenues and expenses are recorded according to when they are earned and incurred, not necessarily when the cash is received or paid.

For example, under the accrual method revenue is recognized when customers are invoiced, regardless of when payment is received. Similarly, an expense is recognized when the bill is received, not when payment is made.

What types of cost information are reported to support managerial purposes and decisions

Under accrual accounting, even though employees may be paid in the next accounting period for work performed near the end of the present accounting period, the expense still is recorded in the current period since the current period is when the expense was incurred.

Underlying Assumptions, Principles, and Conventions Financial accounting relies on the following underlying concepts: Separate entity assumption, going-concern assumption, stable monetary unit assumption, fixed time period assumption. Historical cost principle, matching principle, revenue recognition principle, full disclosure principle.

Materiality, cost-benefit, conservatism convention, industry practices convention. Financial Statements Businesses have two primary objectives: Earn a profit Remain solvent Solvency represents the ability of the business to pay its bills and service its debt.

The four financial statements are reports that allow interested parties to evaluate the profitability and solvency of a business.

These reports include the following financial statements: Balance Sheet Statement of Owner's Equity Statement of Cash Flows These four financial statements are the final product of the accountant's analysis of the transactions of a business.

As indicated in the exhibit, managerial accounting is linked to cost accounting, cost management, activity management and investment management. Managerial accounting involves generating information for internal users including all levels of management and others within the organization. Historical Cost Accounting Historical cost is defined as the aggregate price paid by the firm to acquire ownership and use of an asset, including all payments necessary to obtain the asset in the location and condition required for it to provide ser- vices in the production or other operations of the firm (Hendriksen & Breda, , p. ). ADVERTISEMENTS: Some of the important types of pricing strategies normally adopted by firm are as follows: 1. Pricing a New Product: Pricing is a crucial managerial decision. Most companies do not encounter it in a major way on a day-to-day basis. But there is need to follow certain additional guidelines in the pricing of the [ ].

A large amount of effort goes into the preparation of the financial statements. The process begins with bookkeeping, which is just one step in the accounting process.

Understanding the Importance of Data Management A citation to Your Federal Income Tax would be appropriate.
Tactical HRIS In general, the forces of competition are imposing a need for more effective decision making at all levels in organizations.
Managerial Accounting Problems Said Academicians as well as practitioners have long debated the issue of historical cost accounting versus current value accounting.
Historical Cost Accounting Versus Current Cost Accounting | Nur Barizah Abu Bakar - ashio-midori.com Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.
Discussion: Managerial accounting is defined as the activities carried out in a firm to provide its managers and other employees with financial and related information to help them make strategic, organizational, and operational decisions. We begin by distinguishing between financial and managerial also called management accounting and by investigating how competitive strategy affects the way organizations, such as Carbon Motors, use managerial accounting information.

Bookkeeping is the actual recording of the company's transactions, without any analysis of the information. Accountants evaluate and analyze the information, making sense out of the numbers. For the reports to be useful, they must be:Experts in the HIT world are beginning to pay attention to the need to capture healthcare quality information for measurement purposes, and on the national level, the health information community and the quality community are beginning to work with a broad-based set of stakeholders to define how HIT can effectively support quality improvement.

Cost Accounting provides information for managerial accounting and financial accounting. Cost Accounting measures, analyses and reports financial and non-financial information relating to the costs of acquiring or using resource in an organization; Often used synonymously with Managerial Accounting.

Agency theorists have long contended that managerial entrenchment is detrimental for shareholders, because it protects managers from the discipline of corporate governance.

Jun 30,  · In small business, every dollar counts, so keeping an eye on your bottom line is a necessary review process. Managerial accounting reports can provide you with the information needed to trim costs.

Jun 27,  · Managerial decisions are usually made after consideration of the relevant costs related to the issue. However, some costs are relevant, while others are not.

This document provides instructions for preparing a contract pricing proposal when certified cost or pricing data are required. Note 1. There is a clear distinction between submitting certified cost or pricing data and merely making available books, records, and other documents without identification.

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