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 - site edition by Mark P. Holtzman. Download it once and read it on your site 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!.
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Why not share! An annual anal Embed Size px. Start on. Show related SlideShares at end. WordPress Shortcode. To use this information, company decision-makers must understand managerial-accounting terms. When planning for the future, they follow a master budgeting process. To prepare this budget, and to understand how costs behave, the decision-makers should understand cost-volume-profit relationships, which explain how changes in volume or price affect profits.
Managerial accounting must give managers accurate cost information relevant to their management decisions. Here are several cost-related terms you encounter in managerial accounting:. Indirect cost: Indirect materials, indirect labor, and other miscellaneous costs needed to make products.
Variable costs: Costs that change in direct proportion with activity level. 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. Incremental costs: Costs that change depending on which alternative you choose; also known as relevant costs and marginal costs. Irrelevant costs: Opportunity costs: But I talk a lot about how accountants communicate information in financial statements, and I explain the valuation methods accountants use — ranging from measuring profit and loss to putting values on assets and liabilities of businesses.
As you go through life, you come face to face with accounting information more than you would ever imagine. Accounting information is presented on the assumption that you have a basic familiarity with the vocabulary of accounting and the accounting methods used to generate the information.
In short, most of the accounting information you encounter is not transparent. The main reason for studying accounting is to learn its vocabulary and valuation methods, so you can make more intelligent use of the information. The purpose of this book is to make you a knowledgeable spectator of the accounting game.
Let me point out another reason you should know accounting basics — I call it the defensive reason. A lot of people out there in the cold, cruel financial world may take advantage of you, not necessarily by illegal means but by withholding key information and by diverting your attention from unfavorable aspects of certain financial decisions. These unscrupulous characters treat you as a lamb waiting to be fleeced. Accounting Is Not Just for Accountants One main source of accounting information is in the form of financial statements that are packaged with other information in a financial report.
Accountants keep the books and record the financial activities of an entity such as a business. From these detailed records the accountant prepares financial statements that summarize the results of the activities. Financial statements are sent to people who have a stake in the outcomes of the activities.
If you own stock in General Electric, for example, or you have money in a mutual fund, you receive regular financial reports. If you invest your hard-earned money in a private business or a real estate venture, or you save money in a credit union, you receive regular financial reports. In summary, one important reason for studying accounting is to make sense of the financial statements in the financial reports you get.
I guarantee that Warren Buffett knows accounting and how to read financial statements. Affecting both insiders and outsiders People who need to know accounting fall into two broad groups: insiders and outsiders. Business managers are insiders; they have the authority and responsibility to run a business. They need a good understanding of accounting terms and the methods used to measure profit and put values on assets and liabilities. 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.
Managerial Accounting For Dummies
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. 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.Even the cost of buildings can be depreciated over shorter life spans than the actual lives of most buildings.
Asking questions! Opening the Books on Accounting complied with GAAP in reporting its cash flows, profit-making activities, and financial condition — unless the business makes very clear that it has prepared its financial statements using some other basis of accounting or has deviated from GAAP in one or more significant respects. The total wages and salaries earned by every employee every pay period, which are called gross wages or gross earnings, have to be calculated. Managerial accounting must give managers accurate cost information relevant to their management decisions.
Close the books — bring the bookkeeping for the fiscal year just ended to a close and get things ready to begin the bookkeeping process for the coming fiscal year.
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Double-entry bookkeeping is based on the accounting equation — the fact that the total of assets on the one side is counterbalanced by the total of liabilities, invested capital, and retained profit on the other side.
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