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Essay / Research Paper Abstract
This 3-page paper discusses the difference between management accounting (also known as cost accounting) and financial accounting. Also included is how management accounting reports can keep track of business operations. Bibliography lists 4 sources.
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3 pages (~225 words per page)
File: D0_MTcomaac.rtf
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Unformatted sample text from the term paper:
actual worth of a company. Beyond that however, there are different types of accounting that need to be taken into consideration. For
example, management accounting, which is also known as cost accounting, is defined as the "recording and controlling of all the expenditures of an enterprise in order to facilitate the control
of separate activities" (Wordreference.com, 2003). In other words, cost/management accounting follows expenditures to better match such expenditures with the activities for which the resources are being allocated.
Then there is another type of accounting, financial accounting. Financial accounting is the activity that records activities in such a way so as to represent
the financial picture of a company to its investors (Gibbons, 2003). Financial accounting means such reports are issued on a regular basis (Gibbons, 2003). In an attempt to provide an
accurate picture of a companys worth, financial accounting relies on tools such as ratios, percentages, balance sheets and cash flow statements.
Again, in order to separate the two above definitions, management accounting (cost accounting) is concerned primarily with cost activity assigned to departments, while financial accounting is more concerned with a
firms financial position and value of company assets. How can management accounting reports be better developed to help businesses better track operations?
As can be expected, a good deal of literature exists on this topic. For example, writer Tony Grundy notes that management accounting reports many times dont reflect underlying factors of
performance issues (Grundy, 1997). He recommends two approaches to linking management accounting with strategic performance (Grundy, 1997). There is the root cause, or "fishbone" analysis and performance driver analysis (Grundy,
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