Cost Accounting

Tutorial 1 – Management Accounting

1. Managerial accounting
a. is governed by generally accepted accounting principles.
b. places emphasis on special-purpoise information.
c. pertains to the entity as a whole and is highly aggregated.
d. is limited to cost data

2. The management of an organisation performs severl broad functions. They are:

a. Planning, directing, and selling.
b. Planning, directing, and controlling.
c. Planning, manufacturing, and controlling.
d. Directing, manufacturing, and controlling.

3. “Managerial accounting is a field of accounting that provides economic information for

all interested parties.” Do you agree? Explain.

4. Jenny Gardner believes that managerial accounting serves only manufacturing firms. Is
Jenny correct? Explain.

5. How does the content of reports and the verification of reports differ between managerial
and financial accounting?

6. What are the differences between managerial accounting and financial accounts in terms
of the folloing issues?

Management accounting Financial accounting

Purpose of
information
Primary users
Focus
Emphasis
Rules of measurement
and reporting
Time span
Type of report
Behavioral
implications
Mandatory
7. Denis Mayer has prepared the following list of statements about managerial
accounting and financial accounting. Identify each statement as true or false.
If false, indicate how to correct the statement.

a) Financial accounting focuses on providing information to internal users.

b) Analyzing cost-volume-profit relationships is part of managerial
accounting.
c) Preparation of budgets is part of financial accounting.
d) Managerial accounting applies only to merchandising and manufacturing
companies
e) Both managerial accounting and financial accounting deal with many of
the same economic events
f) Managerial accounting reports are prepared only quarterly and annually
g) Financial accounting reports are general-purpose reports
h) Managerial accounting reports pertain to subunits of the business.
i) Managerial accounting reports must comply with general accepted
accounting principles.
j) Although in managerial accountants are expected to behave ethically,
there is no code of ethical standards for managerial accountants.

8. Listed below are the three functions of the management of an organization:

a) Planning b) Directing c) Controlling

Identify which of the following statements best describes each of the above
functions.

(i) ______ requires management to look ahead and to establish objectives.

A key objective of management is to add value to the business.
(ii) ______involves coordinating the diverse activities and human
resources of a company to produce a smooth-running operation. This
function relates to the implementation of planned objectives.
(iii) ______is the process of keeping the activities on track. Management
must determine whether goals are being met and what changes are
necessary when there are deviations.

12. What are the objectives of having information on Costing?

13. Explain the importance of managerial process in costing.