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Managerial Accounting Terms - Ch. 1 (Managerial Accounting and Concepts and Principles)

Terms in this set (55)

-Managerial accounting information is provided primarily to internal managers and employees who make and implement decisions about a company's business activities.
-Internal decision makers must plan a company's future to take advantage of opportunities or to overcome obstacles. They also try to control activities. Point: It is desirable to accumulate some information for management reports in a database separate from financial accounting records.
-Managerial accounting does not rely on extensive rules. Instead, companies determine what information they need to make planning and control decisions, and then they decide how that information is best collected and reported.
-For Managerial Accounting, External auditors need not review managerial accounting information. Estimates and projections are acceptable. To get information quickly, managers often accept less precision in reports.
-Managerial accounting regularly includes predictions. One important managerial accounting report is a budget, which predicts revenues, expenses, and other items. Making predictions, and evaluating those predictions, are important skills for managers.
-For Managerial Accounting, its' Reports to internal users focus on company units and divisions. Lower-level managers need reports on their specific activities. This information includes the level of success achieved by each individual, product, or department in each division of the whole company.
-Both financial and managerial accounting systems report monetary information. Managerial accounting systems also report considerable nonmonetary information. Common examples of nonmonetary information include customer and employee satisfaction data, percentage of on-time deliveries, product defect rates, energy from renewable sources, and employee diversity.