Bài giảng Financial & Managerial Accounting - Chapter 1: Accounting: information for decision making

Financial & Managerial AccountingThe Basis for Business DecisionsTWELFTH EDITION Williams Haka Bettner MeigsACCOUNTING:Information for Decision MakingChapter1AccountinginformationThe accounting processDecision makersEconomic activitiesActions (decisions)Accounting “links” decision makers with economic activities ¾ and with the results of their decisions.Types of Accounting InformationFinancialManagerialTaxInformation UsersInvestorsCreditors ManagersOwnersCustomersEmployeesRegulatory agencies -SEC -IRS -EPADecision SupportCVP analysis Performance evaluationIncremental  analysisBudgetingCapital  allocationEarnings per  shareRatio analysisInformation SystemCost & Revenue DeterminationJob costingProcess costingABCSalesAssets & LiabilitiesPlant and equipmentLoans & equityReceivables, payables & cashCash FlowsFrom operationsFrom financingFrom investingBasic Functions of an Accounting System Interpret and record business transactions.PaymentCarBasic Functions of an Accounting System Summarize and communicate information to decision makers. Classify similar transactions into useful reports. Interpret and record business transactions.Objectives of External Financial ReportingThe primary external users of financial information are investors and creditors.Information about economic resources, claims to resources, and changes in resources and claims.Information useful in assessing amount, timing and uncertainty of future cash flows.Information useful in making investment and credit decisions.(Specific)(General)Objectives of Financial ReportingObjectives of External Financial ReportingThe primary financial statements.Income StatementBalance SheetStatement of Cash FlowsFinancial ReportingFinancial ReportingFinancial StatementsFinancial Statements: A Lens to View BusinessCharacteristics of Externally Reported InformationA Means to an EndBroader than Financial StatementsHistorical in NatureResults from Inexact and Approximate MeasuresBased on General Purpose AssumptionUsefulness Enhanced via ExplanationInternal Users of Accounting InformationBoard of DirectorsChief Executive Officer Chief Financial OfficerVice PresidentsBusiness Unit ManagersPlant ManagersStore ManagersLine SupervisorsInformation about decision-making authority, for decision-making support, and for evaluating and rewarding decision-making performance.Information useful in assessing both the past performance and future directions of the enterprise and information from external and internal sources.Information useful to help the enterprise achieve its goal, objectives and mission.Objectives of Managerial ReportingCharacteristics of Management Accounting InformationTimelinessIdentify Decision-Making AuthorityOriented Toward FutureMeasures of Efficiency and EffectivenessA Means to an EndIntegrity of Accounting InformationInstitutional FeaturesGenerally Accepted Accounting Principles (GAAP)Financial Accounting Standards BoardSecurities and Exchange CommissionInternal Control StructureAuditsIntegrity of Accounting InformationProfessional OrganizationsAmerican Institute of Certified Public Accountants Institute of Management AccountantsInstitute of Internal AuditorsAmerican Accounting AssociationIntegrity of Accounting InformationCompetence, Judgment and Ethical BehaviorCertified Public Accountants (CPAs)Certificate in Management Accounting (CMA)Certificate in Internal Auditing (CIA)Code of Professional ConductCPAEnd of Chapter 1