ACCTG 102 Lecture Notes - Lecture 2: Total Quality Management, Management Accounting, Cost Accounting
Document Summary
Management accounting must provide both financial and nonfinancial information about quality. Time is crucial in all phases of the value chain. Companies try to eliminate non-value added time. Managers must respond quickly and decisively to changing market conditions. Cost is a critical measure of efficiency. To be effective, cost must be: defined, measured and assigned. Controller: internal auditing, cost accounting, financial accounting, and system accounting. Treasurer: raises capital and manages cash and investments. Management accounting was primarily developed for manufacturing firms. Cost is the amount of cash or cash equivalent sacrificed for goods and/or services. Costs are incurred to produce future benefits. In a profit-making firm, these benefits usually mean revenues. As costs are used up in the production of revenues, they are said to expire. For a company to remain viable, revenues must be greater than expenses. Managers need to know how cost are assigned to cost objects.
