Managerial Accounting in Today's Environment
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Managerial Accounting in Today's Environment
Suggest at least four reasons that indicate that managers need to be knowledgeable about, understand, and use accounting information, even if not working as accountants.
Enumerate and briefly explain how management accounting and financial accounting differ. Do not reproduce the table on the Module 1 Homepage, but elaborate further about the role of management's accountants and future trends. How can management accounting information add value to the organization?
Describe the connection between planning, controlling, and feedback, all parts of management accounting.
Management accounting is interdisciplinary and evolving at a fast pace. Discuss this statement and provide support for your thoughts.
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Solution Summary
Your commentary is 764 words and gives examples of the wide variety of management accounting work, the reason for the fast pace, and reasons why you need to know accounting to be a successful manager.
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Suggest at least four reasons that indicate that managers need to be knowledgeable about, understand, and use accounting information, even if not working as accountants.
1. Need to be able to pinpoint where profits occur. Without understanding profits, it is difficult to know what parts of the business, which product or which customer groups are profitable and which are creating a drag on profits.
2. Need to be able forecast profits for potential decisions. Businesses face a constant stream of decisions and managers need to be able to interrogate accounting data to discern the future cash flows of potential projects to be able to decide which will increase success and which will not.
3. Ensure enough cash. While profits measure the success in the market place and the resource consumed in meeting those needs, businesses without adequate cash fail, even if they generate huge profits. Understanding the difference between cash flow and profits will allow managers to plan to ensure adequate cash and financing needs before a crisis occurs.
4. Provide feedback. Management accounting information can tell managers what worked and what is not working, where items are off budget or off standard, providing early warnings systems before problems get large and interfere with overall ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
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