MANAGERIAL ACCOUNTING FOR DUMMIES PDF
This books (Managerial Accounting For Dummies [PDF]) Made by Mark P. Book details Author: Mark P. Holtzman Pages: pages Publisher: For Dummies Language: English ISBN ISBN Warren Buffett Accounting Book: Reading Financial. Editorial Reviews. From the Back Cover. Learn to: Interpret accounting information for Managerial Accounting For Dummies - Kindle edition by Mark P. Holtzman. Download it once and read it on your Kindle device, PC, phones or tablets. accountants, this text was written to help students make informed business decisions using managerial accounting concepts. Thorough end-of-chapter coverage.
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Read Managerial Accounting For Dummies PDF Ebook by Mark P. Holtzman. Published by For Dummies, ePUB/PDF , SCRIBD. Accounting FORDUMmIES‰4THEDITION Accounting Accounting FOR DUMmIES ‰ 4TH EDITION Accounting FOR DUMmIES ‰ 4TH DOWNLOAD PDF Business Financial Management Kit For Dummies with his son Tage Tracy. The easy way to master a managerial accounting course Are you enrolled in a managerial accounting class and finding yourself struggling? Fear not!.
They need a good understanding of accounting terms and the methods used to measure profit and put values on assets and liabilities.
Accounting For Dummies
Chapter 1: Accounting: The Language of Business, Investing, Finance, and Taxes Accounting information is indispensable for planning and controlling the financial performance and condition of the business. Likewise, administrators of nonprofit and governmental entities need to understand the accounting terminology and measurement methods in their financial statements. The rest of us are outsiders. We are not privy to the day-to-day details of a business or organization.
Therefore, we need to have a good grip on the financial statements included in the financial reports. For all practical purposes, financial reports are the only source of financial information we get directly from a business or other organization.
By the way, the employees of a business — even though they obviously have a stake in the success of the business — do not necessarily receive its financial reports. Only the investors in the business and its lenders are entitled to receive the financial reports. Of course, a business could provide this information to those of its employees who are not shareowners, but generally speaking most businesses do not. The financial reports of public businesses are in the public domain, so their employees can easily secure a copy.
However, financial reports are not automatically mailed to all employees of a public business. In our personal financial lives, a little accounting knowledge is a big help for understanding investing in general, how investment performance is measured, and many other important financial topics.
Keep in mind that this is not a book on bookkeeping and recordkeeping systems.
I offer a brief explanation of procedures for capturing, processing, and storing accounting information in Chapter 3. Even experienced bookkeepers and accountants should find some nuggets in that chapter. However, this book is directed to users of accounting information.
I focus on the end products of accounting, particularly financial statements, and not how information is accumulated. Overcoming the stereotypes of accountants I recently saw a cartoon in which the young son of clowns is standing in a circus tent and is dressed as a clown, but he is holding a business briefcase.
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He is telling his clown parents that he is running away to join a CPA firm. Why is this funny? As a CPA and accounting professor for more than 40 years, I have met and known a large number of accountants.
Most accountants are not as gregarious as used-car sales people though some are. Accountants certainly are more detail-oriented than your average person.
Accountants use very little math no calculus and only simple algebra.
Accountants are very good at one thing: They want to see both sides of financial transactions: the give and take. If you walked down a busy street in Chicago, New York, or Los Angeles, I doubt that you could pick out the accountants.
I have no idea whether accountants have higher or lower divorce rates than others, whether they go to church more frequently, whether most are Republicans or Democrats, or if they generally sleep well at night. I do think that accountants are more honest in paying their income taxes than other people, although I have no proof of this.
Well, a great deal of the information you use in making personal finance and investing decisions is accounting information. You have a stake in the financial performance of the business you work for, the government entities you pay taxes to, the churches and charitable organizations you donate money to, the retirement plan you participate in, the businesses you download from, and the healthcare providers you depend on.
The financial performance and viability of these entities has a direct bearing on your personal financial life and well-being. For example, as an employee your job security and your next raise depend on the business making a profit. If the business suffers a loss, you may be laid off or asked to take a reduction in pay or benefits.
Business managers get paid to make profit happen. If the business fails to meet its profit objectives or suffers a loss, its managers may be replaced or at least not get their bonuses. As an author, I hope my publisher continues to make profit so I can keep receiving my royalty checks.
I hope the stores I trade with make profit and continue in business. The federal government and many states depend on businesses making profit to collect income taxes from them.
When you sign a mortgage on your home, you should understand the accounting method the lender uses to calculate the interest amount charged on your loan each period. Individual investors need to understand accounting basics in order to figure their return on invested capital. And it goes without saying that every organization, profit-motivated or not, needs to know how it stands financially. All economic activity requires information. The more developed the economic system, the more the system depends on information.
Much of the information comes from the accounting systems used by the businesses, institutions, individuals, and other players in the economic system. Some of the earliest records of history are the accounts of wealth and trading activity. The need for accounting information was a main incentive in the development of the numbering system we use today. The history of accounting is quite interesting but beyond the scope of this book.
Taking a Peek into the Back Office Every business and not-for-profit entity needs a reliable bookkeeping system see Chapter 3.
Keep in mind that accounting is a much broader term than bookkeeping. For one thing, accounting encompasses the problems in measuring the financial effects of economic activity.
Key Costs Related to Managerial Accounting
Furthermore, accounting includes the function of financial reporting of values and performance measures to those that need the information. Business managers and investors, and many other people, depend on financial reports for information about the performance and condition of the entity. Of course the financial information base should be complete, accurate, and timely.
Every recordkeeping system needs quality controls built into it, which are called internal controls or internal accounting controls.
Accountants design the internal controls for the bookkeeping system, which serve to minimize errors in recording the large number of activities that an entity engages in over the period. The internal controls that accountants design are also relied on to detect and deter theft, embezzlement, fraud, and dishonest behavior of all kinds. In accounting, internal controls are the ounce of prevention that is worth a pound of cure. I explain internal controls in Chapter 3.
Here, I want to stress the importance of the bookkeeping system in operating a business or any other entity. These back-office functions are essential for keeping operations running smoothly, efficiently, and without delays and errors. This is a tall order, to say the least. Based on detailed private information in personnel files and earnings-to-date information, the correct amounts of income tax, social security tax, and several other deductions from gross wages have to be determined.
Stubs, which report various information to employees each pay period, have to be attached to payroll checks. The total amounts of withheld income tax and social security taxes, plus the employment taxes imposed on the employer, have to be paid to federal and state government agencies on time.
Retirement, vacation, sick pay, and other benefits earned by the employees have to be updated every pay period. In short, payroll is a complex and critical function that the accounting department performs. Many businesses outsource payroll functions to companies that specialize in this area. The accounting department makes sure that the cash is deposited in the appropriate checking accounts of the business and that an adequate amount of coin and currency is kept on hand for making change for customers.
Accountants balance the checkbook of the business and control who has access to incoming cash receipts. In larger organizations, the treasurer may be responsible for some of these cash flow and cashhandling functions.
The accounting department prepares all these checks for the signatures of the business officers who are authorized to sign checks. The accounting department keeps all the supporting business documents and files to know when the checks should be paid, makes sure that the amount to be paid is correct, and forwards the checks for signature.
A typical business makes many downloads during the course of a year, many of them on credit, which means that the items bought are received today but paid for later. So this area of responsibility includes keeping files on all liabilities that arise from downloads on credit so that cash payments can be processed on time. The accounting department Chapter 1: Accounting: The Language of Business, Investing, Finance, and Taxes also keeps detailed records on all products held for sale by the business and, when the products are sold, records the cost of the goods sold.
Except for relatively small-cost items, such as screwdrivers and pencil sharpeners, a business maintains detailed records of its property, both for controlling the use of the assets and for determining personal property and real estate taxes.
The accounting department keeps these property records. Embed Size px. Start on.
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Holtzman M.P. Managerial Accounting for Dummies
No notes for slide. Combination of fixed and variable costs Contribution margin: Sales less variable costs Product costs: Costs needed to make goods; considered part of inventory until sold Period costs: Costs not needed to make goods; recorded as expenses when incurred Work-in-process cost: How much you paid for goods that are started but not yet completed Finished goods cost: How much you paid for goods completed but not yet sold Cost of goods manufactured: The cost of the goods completed during a period Cost of goods sold: The cost of making goods that you sold Controllable costs: Costs that you can change Noncontrollable costs: Direct labor and overhead Incremental costs: Costs that change depending on which alternative you choose; also known as relevant costs and marginal costs Irrelevant costs: Costs of income lost because you chose a different alternative Sunk costs: How much you originally paid for something Cost per unit: Cost of a single unit of product Expense: Costs deducted from revenues on the income statement Cost driver: Factor thought to affect costs Process cost: Cost of similar goods made in large quantities on an assembly line Job order cost: Cost of a batch of specially made goods Absorption cost: Cost that includes fixed and variable product costs Target cost: Cost goal set for engineers designing a product.
The master budget contains the following elements: Sales budget Production budget Direct materials budget Direct labor budget Manufacturing overhead budget Selling and administrative budget Capital acquisitions budget Cash budget Budgeted financial statements. Cost-Volume-Profit Relationships for Managerial Accounting Managerial accounting provides useful tools, such as cost-volume-profit relationships, to aid decision-making.Here, I use a fairly common type of business example.
Bookkeeping and Accounting Systems More than you may want to know right now about types of accounts Accounts fall into two basic types according to which financial statement their balances are reported in: You see both the portrait and the landscape layouts in financial reports. I must admit that accountants use jargon more than they should. Joan was a delight to work with, and it goes without saying that she made the book much better. Selected type:
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