Academic Wiki

MGMT Accounting                                                      Financial Accounting

Accounting for decision makers                                            GAAP

No formal rules                                                                     SEC

Used for company decision making                               Historic in nature

Planning (budgeting, special decision)

Execute

Control  ß really important!!

More future oriented

Three basic types of costs:

• Direct Labor
• Direct Material
• Manufacturing overhead

Costs:

• Period costs (aka expenses): Used up in the period, has no future value.
• Product costs (aka asset): Funds spent that become part of the product (electricity, etc).  Thought of as part of the product.
• Purchased assets: Assets that are purchased and function as a support role for the operations.  These do not contribute directly to the product.

Income statements:

Merchandising organizations                                          Manufactering Organizations

Sales                                                                            Sales

-Cogs (starting inv + purch – ending inv)                       -Cogm (Fin. Good beg of year + fin goods – ending inv)