200-120: Decision Making In Accounting
Managers are tasked with making many important daily decisions. These decisions must be based on reliable information. Being able to measure a phenomenon is the first step at being able to manage it. Decision making in accounting focuses on the managerial aspect of accounting for internal use. Managerial accounting places the emphasis on internal users—executives, product managers, sales managers, and any other personnel within the organization who use accounting information to make important decisions. Managerial accounting often focuses on making future projections for segments of a company. Although historical financial accounting data is useful, preparing projections for the new products would be a managerial accounting function. Managerial accounting data is of a high level of detail such as information on product profitability. Also, managerial accounting information often takes the form of nonfinancial measures. The two important functions that enable management to continually plan for the future and assess implementation are called planning and control. Planning is the process of establishing goals and communicating these goals to employees of the organization. The control function is the process of evaluating whether the organization’s plans were implemented effectively. This course focuses on providing the student with a solid understanding of these critical aspects of managerial accounting and decision making.