Chapter 1 of Management Accounting: Concepts, Techniques, and Controversial Issues. Managerial Accounting, Finance basic concepts pdf Accounting and Cost Management Systems.
Discuss the concept of control. Discuss the relationship between the matching concept and cost accounting. If you pursue it diligently, this course of study will become an invaluable experience regardless of your particular career path. On the other hand, operational definitions are very specific.
Operational definitions contain sufficient clarity so that they cannot be misinterpreted. For example, a conceptual definition of clean is “free from dirt. But suppose we are talking about cleaning the instruments needed for brain surgery. Another more relevant example in the area of accounting is the term “net income”. The definitions presented in this chapter are conceptual definitions.
Accounting is made up of several specialty areas that might be defined in a variety of ways. Although important, public accounting is outside the scope of this textbook. The concept definitions and relationships between these branches of management accounting are also discussed below. Financial accounting, on the other hand, involves preparing general purpose financial statements for stockholders and creditors. This requirement causes external financial statements to be of limited usefulness for internal purposes. The specific requirements of GAAP and the SEC are outside the scope of this textbook.
Internal auditing is an area of accounting that is mainly concerned with the organization’s internal control system. Internal auditors may examine, or audit, all of the organization’s accounting and management systems. Managerial accounting and the connecting branches highlighted in Exhibit 1-2 provide the focus of this textbook. These costs are needed for several purposes. Information about costs is also needed for a variety of management decisions. These courses had a fairly narrow orientation towards inventory valuation for external reporting. Vatter’s work was definitely a turning point.