Chapter 1 extract from our ExPress notes for use with the current video.

A full set of F2 ExPress notes can be downloaded free of charge at www.theexpgroup.com.

Notes
ACCA Paper F2
Management Accounting
For exams in 2011

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ExPress Notes
ACCA F2 Management Accounting

Chapter 1

The Nature and Purpose of Cost and Management Accounting

The Characteristics of Good Information

The qualities of good information can be summarized in the word ACCURATE: Accurate, Complete, Cost-beneficial, User-targeted, Relevant, Authoritative, Timely and Easy to use

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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.

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ExPress Notes
ACCA F2 Management Accounting

Responsibility centres

Cost Centres

Revenue Centres

Profit Centres

Investment Centres

Cost centres: Responsible for current expenses only Revenue centres: Responsible for revenues, but not current expenses other than marketing expenses Profit centres: Responsible for revenues and current expenses Investment centres: Responsible for revenues, current expenses and capital expenditure

KEY KNOWLEDGE Management Accounting

The process of identification, measurement, accumulation, analysis, preparation, interpretation and reporting of information used by management to set targets, plan resource allocation, evaluate investment choices and monitor/control the operating performance and the orderly conduct of the business.

Differences in purpose and scope, compared to Financial Accounting Aimed at internal users (as opposed to financial accounting, which is aimed at external stakeholders) Focused on present and future performance (as opposed to financial accounting, which reports past performance) Not required by law and not regulated by accounting frameworks (as opposed to financial accounting, which is a legal requirement and is regulated by accounting frameworks)

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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.

theexpgroup.com

ExPress Notes
ACCA F2 Management Accounting

Focused on specific areas or activities (as opposed to financial accounting, which provides a holistic view of companys performance) Employs non-financial indicators as well financial, while financial accounting uses only financial measures.

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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.

theexpgroup.com