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  1. Preface
  2. 1 Accounting as a Tool for Managers
    1. Why It Matters
    2. 1.1 Define Managerial Accounting and Identify the Three Primary Responsibilities of Management
    3. 1.2 Distinguish between Financial and Managerial Accounting
    4. 1.3 Explain the Primary Roles and Skills Required of Managerial Accountants
    5. 1.4 Describe the Role of the Institute of Management Accountants and the Use of Ethical Standards
    6. 1.5 Describe Trends in Today’s Business Environment and Analyze Their Impact on Accounting
    7. Key Terms
    8. Summary
    9. Multiple Choice
    10. Questions
    11. Exercise Set A
    12. Exercise Set B
    13. Thought Provokers
  3. 2 Building Blocks of Managerial Accounting
    1. Why It Matters
    2. 2.1 Distinguish between Merchandising, Manufacturing, and Service Organizations
    3. 2.2 Identify and Apply Basic Cost Behavior Patterns
    4. 2.3 Estimate a Variable and Fixed Cost Equation and Predict Future Costs
    5. Key Terms
    6. Summary
    7. Multiple Choice
    8. Questions
    9. Exercise Set A
    10. Exercise Set B
    11. Problem Set A
    12. Problem Set B
    13. Thought Provokers
  4. 3 Cost-Volume-Profit Analysis
    1. Why It Matters
    2. 3.1 Explain Contribution Margin and Calculate Contribution Margin per Unit, Contribution Margin Ratio, and Total Contribution Margin
    3. 3.2 Calculate a Break-Even Point in Units and Dollars
    4. 3.3 Perform Break-Even Sensitivity Analysis for a Single Product Under Changing Business Situations
    5. 3.4 Perform Break-Even Sensitivity Analysis for a Multi-Product Environment Under Changing Business Situations
    6. 3.5 Calculate and Interpret a Company’s Margin of Safety and Operating Leverage
    7. Key Terms
    8. Summary
    9. Multiple Choice
    10. Questions
    11. Exercise Set A
    12. Exercise Set B
    13. Problem Set A
    14. Problem Set B
    15. Thought Provokers
  5. 4 Job Order Costing
    1. Why It Matters
    2. 4.1 Distinguish between Job Order Costing and Process Costing
    3. 4.2 Describe and Identify the Three Major Components of Product Costs under Job Order Costing
    4. 4.3 Use the Job Order Costing Method to Trace the Flow of Product Costs through the Inventory Accounts
    5. 4.4 Compute a Predetermined Overhead Rate and Apply Overhead to Production
    6. 4.5 Compute the Cost of a Job Using Job Order Costing
    7. 4.6 Determine and Dispose of Underapplied or Overapplied Overhead
    8. 4.7 Prepare Journal Entries for a Job Order Cost System
    9. 4.8 Explain How a Job Order Cost System Applies to a Nonmanufacturing Environment
    10. Key Terms
    11. Summary
    12. Multiple Choice
    13. Questions
    14. Exercise Set A
    15. Exercise Set B
    16. Problem Set A
    17. Problem Set B
    18. Thought Provokers
  6. 5 Process Costing
    1. Why It Matters
    2. 5.1 Compare and Contrast Job Order Costing and Process Costing
    3. 5.2 Explain and Identify Conversion Costs
    4. 5.3 Explain and Compute Equivalent Units and Total Cost of Production in an Initial Processing Stage
    5. 5.4 Explain and Compute Equivalent Units and Total Cost of Production in a Subsequent Processing Stage
    6. 5.5 Prepare Journal Entries for a Process Costing System
    7. Key Terms
    8. Summary
    9. Multiple Choice
    10. Questions
    11. Exercise Set A
    12. Exercise Set B
    13. Problem Set A
    14. Problem Set B
    15. Thought Provokers
  7. 6 Activity-Based, Variable, and Absorption Costing
    1. Why It Matters
    2. 6.1 Calculate Predetermined Overhead and Total Cost under the Traditional Allocation Method
    3. 6.2 Describe and Identify Cost Drivers
    4. 6.3 Calculate Activity-Based Product Costs
    5. 6.4 Compare and Contrast Traditional and Activity-Based Costing Systems
    6. 6.5 Compare and Contrast Variable and Absorption Costing
    7. Key Terms
    8. Summary
    9. Multiple Choice
    10. Questions
    11. Exercise Set A
    12. Exercise Set B
    13. Problem Set A
    14. Problem Set B
    15. Thought Provokers
  8. 7 Budgeting
    1. Why It Matters
    2. 7.1 Describe How and Why Managers Use Budgets
    3. 7.2 Prepare Operating Budgets
    4. 7.3 Prepare Financial Budgets
    5. 7.4 Prepare Flexible Budgets
    6. 7.5 Explain How Budgets Are Used to Evaluate Goals
    7. Key Terms
    8. Summary
    9. Multiple Choice
    10. Questions
    11. Exercise Set A
    12. Exercise Set B
    13. Problem Set A
    14. Problem Set B
    15. Thought Provokers
  9. 8 Standard Costs and Variances
    1. Why It Matters
    2. 8.1 Explain How and Why a Standard Cost Is Developed
    3. 8.2 Compute and Evaluate Materials Variances
    4. 8.3 Compute and Evaluate Labor Variances
    5. 8.4 Compute and Evaluate Overhead Variances
    6. 8.5 Describe How Companies Use Variance Analysis
    7. Key Terms
    8. Summary
    9. Multiple Choice
    10. Questions
    11. Exercise Set A
    12. Exercise Set B
    13. Problem Set A
    14. Problem Set B
    15. Thought Provokers
  10. 9 Responsibility Accounting and Decentralization
    1. Why It Matters
    2. 9.1 Differentiate between Centralized and Decentralized Management
    3. 9.2 Describe How Decision-Making Differs between Centralized and Decentralized Environments
    4. 9.3 Describe the Types of Responsibility Centers
    5. 9.4 Describe the Effects of Various Decisions on Performance Evaluation of Responsibility Centers
    6. Key Terms
    7. Summary
    8. Multiple Choice
    9. Questions
    10. Exercise Set A
    11. Exercise Set B
    12. Problem Set A
    13. Problem Set B
    14. Thought Provokers
  11. 10 Short-Term Decision Making
    1. Why It Matters
    2. 10.1 Identify Relevant Information for Decision-Making
    3. 10.2 Evaluate and Determine Whether to Accept or Reject a Special Order
    4. 10.3 Evaluate and Determine Whether to Make or Buy a Component
    5. 10.4 Evaluate and Determine Whether to Keep or Discontinue a Segment or Product
    6. 10.5 Evaluate and Determine Whether to Sell or Process Further
    7. 10.6 Evaluate and Determine How to Make Decisions When Resources Are Constrained
    8. Key Terms
    9. Summary
    10. Multiple Choice
    11. Questions
    12. Exercise Set A
    13. Exercise Set B
    14. Problem Set A
    15. Problem Set B
    16. Thought Provokers
  12. 11 Capital Budgeting Decisions
    1. Why It Matters
    2. 11.1 Describe Capital Investment Decisions and How They Are Applied
    3. 11.2 Evaluate the Payback and Accounting Rate of Return in Capital Investment Decisions
    4. 11.3 Explain the Time Value of Money and Calculate Present and Future Values of Lump Sums and Annuities
    5. 11.4 Use Discounted Cash Flow Models to Make Capital Investment Decisions
    6. 11.5 Compare and Contrast Non-Time Value-Based Methods and Time Value-Based Methods in Capital Investment Decisions
    7. Key Terms
    8. Summary
    9. Multiple Choice
    10. Questions
    11. Exercise Set A
    12. Exercise Set B
    13. Problem Set A
    14. Problem Set B
    15. Thought Provokers
  13. 12 Balanced Scorecard and Other Performance Measures
    1. Why It Matters
    2. 12.1 Explain the Importance of Performance Measurement
    3. 12.2 Identify the Characteristics of an Effective Performance Measure
    4. 12.3 Evaluate an Operating Segment or a Project Using Return on Investment, Residual Income, and Economic Value Added
    5. 12.4 Describe the Balanced Scorecard and Explain How It Is Used
    6. Key Terms
    7. Summary
    8. Multiple Choice
    9. Questions
    10. Exercise Set A
    11. Exercise Set B
    12. Problem Set A
    13. Problem Set B
    14. Thought Provokers
  14. 13 Sustainability Reporting
    1. Why It Matters
    2. 13.1 Describe Sustainability and the Way It Creates Business Value
    3. 13.2 Identify User Needs for Information
    4. 13.3 Discuss Examples of Major Sustainability Initiatives
    5. 13.4 Future Issues in Sustainability
    6. Key Terms
    7. Summary
    8. Multiple Choice
    9. Questions
    10. Thought Provokers
  15. Financial Statement Analysis
  16. Time Value of Money
  17. Suggested Resources
  18. Answer Key
    1. Chapter 1
    2. Chapter 2
    3. Chapter 3
    4. Chapter 4
    5. Chapter 5
    6. Chapter 6
    7. Chapter 7
    8. Chapter 8
    9. Chapter 9
    10. Chapter 10
    11. Chapter 11
    12. Chapter 12
    13. Chapter 13
  19. Index

The resources listed provide further information on several topics: financial statements from real-world companies, accounting software and tools, personal finance, accounting organizations, and exams and professional certifications for accountants.

Sample Financial Statements

The following income statements and balance sheets show the finances of companies representing the manufacturing, retail, and service industries.

Manufacturing Company: General Motors

  • Income statement: https://www.nasdaq.com/symbol/gm/financials?query=income-statement
  • Balance sheet: https://www.nasdaq.com/symbol/gm/financials?query=balance-sheet

Retail Company: Costco Wholesale

  • Income statement: https://www.nasdaq.com/symbol/cost/financials
  • Balance sheet: https://www.nasdaq.com/symbol/cost/financials?query=balance-sheet

Service Company: Prudential

  • Income statement https://www.marketwatch.com/investing/stock/pru/financials
  • Balance sheet: https://www.marketwatch.com/investing/stock/pru/financials/balance-sheet

Accounting Software and Tools

The resources listed offer a variety of tutorials, training videos, and practice activities using software and tools common in accounting.

QuickBooks

  • QuickBooks tutorials: https://quickbooks.intuit.com/tutorials/

Peachtree/Sage 50

  • Peachtree 2011 guide: https://www.perdisco.com/peachtreeLearning/quickReferenceGuide/2011.aspx
  • Sage 50 training course with videos: https://www.freebookkeepingaccounting.com/single-post/Sage-50-Accounts-Training-Course-Part-1

Microsoft Excel

  • Excel tutorials, video guides, trainings, and worksheets: https://chandoo.org/wp/welcome/
  • YouTube channel with accounting-specific video tutorials: https://www.youtube.com/user/ExcelIsFun

Financial Calculators

  • HP10B setup video guide: https://www.youtube.com/watch?v=lmMdRfKre44
  • HP10BII video introduction and examples: https://www.youtube.com/watch?v=fTqkkeG1xlw
  • HP10B and HP12C time value of money calculations video guides: https://www.youtube.com/user/mssuprof/videos

Personal Finance

These resources can assist you with personal financial planning.

Earnings

  • Current starting salaries for recent college graduates for various majors and degrees: https://careers.kennesaw.edu/employers/docs/2018-nace-salary-survey-winter.pdf
  • Accounting-specific salaries and positions: https://www.roberthalf.com/blog/salaries-and-skills/the-rise-of-the-accountant-salary-and-10-top-accounting-jobs

Take-Home Pay

  • Salary calculator that determines your net pay—the amount you’ll take home in your paycheck that you need to plan your budget around. In addition to calculating state and federal taxes, this resource allows you to input other withholdings such as health insurance or 401K contributions: https://www.paycheckcity.com/

Saving and Retirement Planning

Determining how much your savings will grow and how much you will have in retirement are very important components of personal financial planning. These links will help you better plan for those aspects of saving.

  • This basic savings growth calculator includes graphs that provide helpful visuals of the impact of changing any assumptions such as the timing or amount of contributions or the interest rate earned: https://smartasset.com/investing/investment-calculator
  • To estimate retirement savings growth, use this calculator that allows you to see the impact of saving now (enter your current age) versus saving later (enter a future age): https://www.daveramsey.com/smartvestor/investment-calculator
  • This calculator lets you more accurately plan how your retirement savings will grow by allowing you to input any matching amounts contributed by employers: https://nb.fidelity.com/public/nb/401k/tools/calculators/contributioncalculator

Budgeting

  • A well-planned budget is the cornerstone of personal financial planning. Using the salary, pay and savings numbers obtained from the resources above, this calculator will help you create a detailed financial budget: https://www.clearpoint.org/tools/budget-calculator/

Debt Reduction

  • Whether it is student loans, credit cards, car loans or any other kind of debt, it is always beneficial to understand the impact of differing payments on paying off debt. This resource will help you see the impact of changing the amount paid on the payoff timing and interest paid on the debt: https://www.money-zine.com/calculators/loan-calculators/debt-reduction-calculator/

Accounting-Related Organizations

A number of organizations are dedicated to regulating and supporting the variety of work undertaken in the discipline of accounting.

  • Governmental Accounting Standards Board (GASB): https://www.gasb.org
  • Financial Accounting Standards Board (FASB): https://www.fasb.org
  • U.S. Securities and Exchange Commission (SEC): https://www.sec.gov
  • Association of Chartered Certified Accountants (ACCA): https://www.accaglobal.com
  • Institute of Management Accountants (IMA): https://www.imanet.org

Accounting Exams and Certificates

These sites provide information on exams and professional certifications.

Certified Public Accountant (CPA)

  • American Institute of Certified Public Accountants (AICPA): https://www.aicpa.org/content/aicpa/
  • National Association of State Boards of Accountancy (NASBA): https://nasba.org/
  • This Way to the CPA: https://thiswaytocpa.com/

Certified Management Accountant (CMA)

  • Institute of Management Accountants (IMA): https://www.imanet.org/cma-certification?ssopc=1

Certified Internal Auditor (CIA)

  • Institute of Internal Auditors (IIA)-Global: https://global.theiia.org/Pages/globaliiaHome.aspx
  • Institute of Internal Auditors (IIA)-North America: https://na.theiia.org/Pages/IIAHome.aspx

Certified Fraud Examiner (CFE)

  • Association of Certified Fraud Examiners (ACFE): http://www.acfe.com/default.aspx

Chartered Financial Analyst (CFA)

  • CFA Institute: https://www.cfainstitute.org/Pages/index.aspx

Certified Financial Planner (CFP)

  • Certified Financial Planners (CFP) Board: https://www.cfp.net/home
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© Feb 14, 2019 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License 4.0 license. The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.