About This Chapter
Who's It For?
Anyone who needs help learning or mastering managerial accounting material will benefit from the lessons in this chapter. There is no faster or easier way to learn managerial accounting. Among those who would benefit are:
- Students who have fallen behind in understanding the purposes of budgeting or the steps involved in preparing a budget
- Students who struggle with learning disabilities or learning differences, including autism and ADHD
- Students who prefer multiple ways of learning business (visual or auditory)
- Students who have missed class time and need to catch up
- Students who need an efficient way to learn about managerial accounting
- Students who struggle to understand their teachers
- Students who attend schools without extra business learning resources
How It Works:
- Find videos in our course that cover what you need to learn or review.
- Press play and watch the video lesson.
- Refer to the video transcripts to reinforce your learning.
- Test your understanding of each lesson with short quizzes.
- Verify you're ready by completing the Managerial Accounting chapter exam.
Why It Works:
- Study Efficiently: Skip what you know, review what you don't.
- Retain What You Learn: Engaging animations and real-life examples make topics easy to grasp.
- Be Ready on Test Day: Use the Managerial Accounting chapter exam to be prepared.
- Get Extra Support: Ask our subject-matter experts any managerial accounting question. They're here to help!
- Study With Flexibility: Watch videos on any web-ready device.
Students Will Review:
This chapter helps students review the concepts in a managerial accounting unit of a standard business management course. Topics covered include:
- Functions of managerial accounting
- The four types of budget controls
- Methods for preparing financial plan
- Balance sheet formatting
- Income statement components
- Objectives of a cash flow statement
- Formatting for a statement of retained earnings
- Purposes of financial statement audits
- The fundamental principles of accounting
- Elements of a financial statement analysis
1. Managerial Accounting Functions
Managerial accounting is used to improve the efficiency of the management process by focusing on management planning, cost controls and financial monitoring to ensure the financial success of departments and the overall company.
2. Budget Controls: Top-Down, Bottom-Up, Zero-Based & Flexible Budgeting
In this lesson, we will explain the purpose of budget controls and explore several key related concepts including top-down budgeting, bottom-up budgeting, zero-based budgeting and flexible budgeting.
3. The Balance Sheet: Purpose, Components & Format
There are four financial reports that make up a group known as the financial statements. We will take a walk with one of those reports - the balance sheet - and learn what it is, what items are included on it and what its role in the group is.
4. What Is an Income Statement? - Purpose, Components & Format
There are four financial reports that are created during the accounting cycle. These four reports make up what is commonly known as the financial statements. In this lesson, we will focus our attention on the income statement. We will learn what the income statement is, what its role in the financial statements is, and why it is important in accounting.
5. The Statement of Cash Flows: Purpose, Format & Examples
There are four financial reports that are required in financial statements. In this lesson, you will learn about the fourth and final report - the statement of cash flows. You'll learn what the makeup of the statement is, its purpose, and why it is important to users of the financial statements.
6. Preparing the Basic Income Statement and Statement of Retained Earnings
Preparing financial statements can be tricky. In this lesson, we are going to talk about how to prepare the first two basic financial statements: the income statement and the statement of retained earnings.
7. How to Prepare the Basic Balance Sheet and Statement of Cash Flows
There are four reports that make up the financial statements. In this lesson, we will talk about how to create the balance sheet and the statement of cash flows. You will learn how to format the reports, as well as what information is reported on them.
8. External Audits of Financial Statements
Financial statements are one of the most heavily relied upon group of reports in the business world, and they must be accurate and reliable. In this lesson, you'll learn about financial statement audits, who performs them, and why they are important.
9. The Fundamental Principles of Accounting
Accounting is an art, but just as with any form of art, you need the right tools to make your masterpiece. For accounting, those tools are the seven major accounting principles. In this lesson, you will learn what those principles are and what they are used for.
10. Financial Statement Analysis: Definition, Purpose, Elements & Examples
In this lesson, we'll define financial statement analysis and discuss the main categories. You'll also learn how to calculate a financial ratio in each category and analyze the results.
11. What is a Financial Investment? - Definition, Types & Examples
Learn about the basics of financial investments and some of the key terminology that is important to understand. Find out about some of the most common types of financial investments and the unique attributes of each.
12. What Is a Financial Plan for a Business? - Definition & Example
A financial plan for a business can help managers determine if they can achieve the organization's goals. The financial plan is one of the first things created to help managers make decisions that are in the best interest of the organization.
13. Financial Goal: Definition & Examples
In this lesson, you will learn what financial goals are as well as look at some examples. Goal length and the steps to achieving financial goals will be discussed.
14. Flexible Budgeting: Advantages & Explanation
What is flexible budgeting? Well, it certainly has nothing to do with being able to touch your toes! It's a way of budgeting that gives better feedback on company performance when sales or production volume is different than what was originally anticipated.
15. Top-Down Budgeting: Definition, Process & Advantages
In top-down budgeting, a company's high-level targets and goals are defined by senior management, and then managers are given an allocation from those targets. In this lesson, we'll discuss why companies use this method and how the process works.
16. Variances in Budgets: Definition, Calculations & Analysis
What are variances in budgets, and why do we calculate them? In this lesson, we discuss what they are, why we care about them, and how to analyze variances in our own reports to obtain information we can use to improve our results.
17. Normal Costing: Definition, Example & Formula
Normal costing is a fast and fairly accurate way to calculate production costs. This lesson will present the formula for normal costing and illustrate its use with an example.
18. Normal Costing vs. Actual Costing
Both actual and normal costing methods use actual amounts for direct material and labor costs. The difference is in how the overhead is allocated to each item produced. This lesson will walk you through an example to illustrate both methods.
19. Normal Costing vs. Standard Costing
Check out some examples to see how normal and standard costing are used for different reasons: to calculate costs after the fact when they're known vs. using the materials and labor that it should take to make a product to calculate costs.
20. Administrative Costs in Accounting: Definition & Examples
In this lesson, you will learn more about the definition and examples of administrative expenses. Further, you will also learn how this category of expenses is presented on the face of the income statement.
21. What is Cost Avoidance? - Definition & Examples
Cost avoidance is an important concept in business that is rarely mentioned because it gets confused with a similar concept called cost savings. In this lesson, we will discuss the what cost avoidance is and show you some examples of it.
22. Cost Avoidance vs. Cost Savings
In this lesson, we will compare cost avoidance and cost savings. We'll describe what each is, and we'll give examples of each and highlight the similarities and differences.
23. What is Decentralization in Accounting? - Definition & Examples
Many business organizations are becoming decentralized. In this lesson, you will learn more about decentralization, what responsibility centers are, and how these responsibility centers are evaluated.
24. Decentralization in Accounting: Advantages & Disadvantages
More companies are veering away from the traditional centralized management approach and are decentralizing operations. Continue on to learn more about the advantages and disadvantages of decentralization.
25. What is Cost Structure? - Definition, Types & Examples
In this lesson, you'll learn how important it is for businesses to know just what kinds of costs they need to be aware of in order to stay in operation. You'll also learn how a business figures out just what kinds of costs it will incur.
26. Residual Risk vs. Inherent Risk
An important part of identifying and mitigating risk is understanding what risks you can avoid and what risks you must accept. In this lesson, we will discuss the difference between residual and inherent risk, two types of risk good managers must understand.
27. What is Inherent Risk? - Definition & Assessment
In this lesson, you will learn about the concept of inherent risk in accounting. Then, the lesson explains how this risk is assessed, with the help of an example.
28. Inherent Risk & Control Risk
In this lesson, we will define risk. We will also identify the various types of risks found in the accounting and finance professions. We will explore the reasons for the risk and provide examples of each type.
29. Risk Control vs. Risk Management
In this lesson, we'll clarify the difference between risk management and risk control. We'll also describe a five step process commonly used in risk management, and then highlight four basic categories of risk controls.
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Other chapters within the Business Management: Help & Review course
- Introduction to Management: Help & Review
- Leadership Types and Styles: Help & Review
- Individual Decision Making
- Motivation Theory: Help & Review
- Management Theory: Help & Review
- Strategic Management: Help & Review
- Human Resources Management: Help & Review
- Labor Relations: Help & Review
- International Business Management: Help & Review
- Business Ethics: Help & Review
- Tuition Reimbursement: Help & Review
- Using Kanban in Business Management: Help & Review
- Accounting Basics for Entrepreneurs
- Business Law for Entrepreneurs
- Contract Enforcement & Administration
- U.S. Labor Law in the Private Sector Post-1960
- HR Management
- Rights, Ethics & Employment
- Government Regulation on Business