ACT500 Discussion 1

Management Accounting

Financial accounting and managerial accounting are subdivisions of accounting and play an essential role within an organization.

Discuss the major differences between managerial and financial accounting then apply your understanding to the following 4 scenarios. Discuss if these are managerial accounting or financial accounting and why.

A company is looking to increase its gross profit by reducing costs for the upcoming periods. To further investigate, the production manager pulls reports that detail costs in the previous year. After discussions with the purchasing manager, he creates a budget based on assumptions and estimates.

An investor researching profitable companies pulls quarterly reports of various corporations. The reports are prepared according to GAAP with objective information and focus on the business as a whole. Are the reports prepared using managerial or financial accounting?

To fund its expansion in the upcoming year, Deacon Corporation negotiates a $4,000,000 loan with a local bank. The bank requires financial statements to ensure the company’s ability to pay interest and repay the principal. Would Deacon Corporation use managerial or financial accounting to create the reports for the bank?

During an audit, an agent looks at the company’s financial statements to verify that the same accounting practices were used in the tax return for a certain expense. Would the financial statements used by the agent be prepared using managerial or financial accounting?

Directions:

Discuss the concepts, principles, and theories from your textbook. Cite your textbooks and cite any other sources if appropriate.

7/3/23, 11:55 AM
ACT-500-MASTER-Managerial Accounting
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Discussion 25
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25 points
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Meets
Expectation
Some
Expectations
Unsatisfactory
Quantity
5 to 6 points
3 to 4 points
1 to 2 points
0 to 0 points
Initial post and
two other posts
of substance.
Initial post and
one other post
of substance.
Initial post only.
Did not
participate.
5 to 6 points
3 to 4 points
1 to 2 points
0 to 0 points
Demonstrates
excellent
knowledge of
concepts, skills,
and theories
relevant to the
topic.
Demonstrates
knowledge of
concepts, skills,
and theories.
Demonstrates
satisfactory
knowledge of
concepts, skills,
and theories.
Did not
participate.
5 to 6 points
3 to 4 points
1 to 2 points
0 to 0 points
Discussion
post(s) exceed
expectations in
terms of support
provided and
extend the
discussion.
Discussion
post(s) meet
expectations in
terms of
support
provided.
Statements are
satisfactory in
terms of
support
provided.
Did not
participate.
6 to 7 points
4 to 5 points
1 to 2 points
0 to 0 points
Writing is well
organized, clear,
concise, and
focused; no
errors.
Some significant
but not major
errors or
omissions in
writing
organization,
focus, and
clarity.
Numerous
significant
errors or
omissions in
writing
organization,
focus, and
clarity.
Did not
participate.
Content
Support
Writing
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