Session 1 - Chapter 1 - PoMA

Preparing for take-off
ACCT 130 Principles of

Management Accounting
Waqar Ali
A very warm welcome to you!
The PoMA [Spring17] Team
Waqar Wasif Sophiya Hira Wardah

Ali Ali Tauseef Sohail Hassan
AWAYS
Management tool
Financial control
Decision-making
Business management
Cost accounting
Signature MA vocabulary
Cost pooling
Intelligent techniques
Essential connection
with other disciplines
Finance / Reporting
Auditing
Marketing
IT
Operations
Work placements
locally
Professional Behavior: Course
Etiquette
Professional Timekeeping
Strict Zero-Minute Policy
University Rules
All absence / quiz / exam petitions handled by OSA
Opportunistic Behavior
Zero Tolerance to Plagiarism (colloquially ~ DC-triggering
cheating)
Instructor / TA approaching mindfulness
Instructor: Conceptual Learning Clarification / Emergency cases
TA: Day-to-day, Syllabus, Timing, Venue Queries
Who this course isnt for
The Non-morning Dude
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How I will make it achievable and
enjoyable for you
Reducing your grade anxiety by rewarding your hard work
generously.
Students without O/A Level Accounting background*
Reducing your accounting anxiety via business-focused approach,
best TAs, coaching and making past quizzes and a test bank available
for sufficient practice.
Endorphins Release: A mid-lecture in-class 5 minute video-inspired
session.
Engaging you by giving the course a memorable aura.
Achieving the
Target Grade
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How can you ace this course?
(2) Class Notes |
(1) Pre-read Slides
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Quiz
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(5) Mid-
(3) Q practice
semester
from test bank
consultation |
every weekend
Office Hours
(4) Past
quizzes
ACCT 250 | PoMA| Waqar Ali | 2017 Spring

Course Outline Review
Course Outline | Inverted U
A Typical PoMA Question
Which of the following costs would not be the
concern of the supervisor of a production department?
(a) Material costs
(b) Labor costs
(c) Maintenance costs for a machine
(d) Lease payments on a machine
(e) All of the above would be relevant.
Managerial Accounting and
the Business Environment
<< Request >>
Chapter One
McGrawHill/Irwin Copyright2008,TheMcGrawHillCompanies,Inc.
1-13
Work of Management
Planning
Planning
Directing
Directing and
and
Motivating
Motivating
Controlling
Controlling
1-14
Planning
Identify
Identify
alternatives.
alternatives.
Select
Select alternative
alternative that
that does
does
the
the best
best job
job of
of furthering
furthering
organizations
organizations objectives.
objectives.
Develop
Develop budgets
budgets to
to guide
guide
progress
progress toward
toward the
the
selected
selected alternative.
alternative.
1-15
Directing and Motivating
Directing and motivating involves managing

day-to-day activities to keep the organization
running smoothly.
Using internal data (e.g. sales/cost reports)
Employee work assignments.
Routine problem solving.
Conflict resolution.
Effective communications.
1-16
Controlling
The
The control
control function
function ensures
ensures
that
that plans
plans are
are being
being followed.
followed.
Feedback
Feedback inin the
the form
form ofof performance
performance reports
reports
that
that compare
compare actual
actual results
results with
with the
the budget
budget
are
are an
an essential
essential part
part of
of the
the control
control function.
function.
1-17
Exhibit
Planning and Control Cycle 1-2
Formulating
Formulatinglong-
long- Begin
and
andshort-term
short-termplans
plans
(Planning)
(Planning)
Comparing
Comparingactual
actual Implementing
Implementing
to
toplanned
planned Decision plans
performance Making plans(Directing
(Directing
performance and
(Controlling) andMotivating)
Motivating)
(Controlling)
Measuring
Measuring
performance
performance
(Controlling)
(Controlling)
1-18
Learning Objective 1
Identify the major

differences and similarities
between financial and
managerial accounting.
1-19
Comparison of Financial and Managerial Accounting

Financial Accounting Managerial Accounting
1. Users External persons who Managers who plan for
make financial decisions and control an organization
2. Time focus Historical perspective Future emphasis
3. Verifiability Emphasis on Emphasis on relevance

versus relevance verifiability for planning and control
4. Precision versus Emphasis on Emphasis on

timeliness precision timeliness
5. Subject Primary focus is on Focuses on segments

the whole organization of an organization
6. GAAP Must follow GAAP Need not follow GAAP
and prescribed formats or any prescribed format
7. Requirement Mandatory for Not
external reports Mandatory
1-20
From previous semesters Quiz 1
1-21
Understand the basic

concepts underlying Lean
Production, the Theory of
Constraints, and Six
Sigma.
1-22
Process Management
A business
process is a series of
steps that are followed in order to
carry out some task in
a business.
Product Customer
R&D Design Manufacturing Marketing Distribution Service
Business functions making up the value chain
1-23
Process Management
There are three approaches to

improving business processes . . .
Theory of
Constraints (TOC)
Lean Six
Production Sigma
1-24
Traditional Push
Manufacturing Company
Forecast Sales Order components Store Inventory
Make Sales from

Finished Goods Store Produce goods in
Inventory Inventory Anticipation of Sales
Traditional Push
1-25
Manufacturing Company
Traditional push Large
manufacturing inventories
Raw Work in Finished

materials process goods
Materials
Materials waiting
waiting Completed
Completed products
products
to
to be
be processed.
processed. awaiting
awaiting sale.
sale.
Partially
Partially completed
completed products
products
requiring
requiring more
more work
work before
before
they
they are
are ready
ready for
for sale.
sale.
1-26 Exhibit
Lean Production
1-6

Identify
Identify value
value
Identify
Identify the
the
in
in specific
specific business
business process
process
products/services.
products/services. that
that delivers
delivers value.
value.
The Organize
Organize work
work
The lean
lean thinking
thinking
arrangements
arrangements around
around
model
model is
is aa five
five the
the flow
flow of
of the
the
step
step approach.
approach. business
business process.
process.

Continuously
Continuously pursue
pursue
Create
Create aa pull
pull
perfection
perfection in
in the
the system
system that
that responds
responds
business
business process.
process. to
to customer
customer orders.
orders.
1-27
Lean Production
The
The five
five step
step process
process results
results in
in aa pull
pull manufacturing
manufacturing system
system
that
that reduces
reduces inventories,
inventories, decreases
decreases defects,
defects, reduces
reduces
wasted
wasted effort,
effort, and
and shortens
shortens customer
customer response
response times.
times.
Customer Places Create Production Generate Component

an Order Order Requirements
Goods Delivered Production Begins Components

when needed as Parts Arrive are Ordered
1-28
Lean Production
Lean thinking may be used to improve business

processes that link companies together.
The term supply chain management refers to

the coordination of business processes across
companies to better serve end consumers.
1-29
Theory of Constraints
A constraint (also called a bottleneck) is anything that

prevents you from getting more of what you want.
The Theory of Constraints is based on the observation that
effectively managing the constraint is the key to success.
The
The constraint
constraint inin aa system
system is
is determined
determined
by
by the
the step
step that
that has
has the
the smallest
smallest capacity.
capacity.
1-30
Theory of Constraints
Only actions 2.
2.Allow
Allow the
the
that strengthen weakest
weakest link
link to
to
the weakest link set
in the chain set the
thetempo.
tempo.
improve the
process.
3.
3. Focus
Focuson on
1.
1.Identify
Identifythe
the improving
improving
weakest
weakest link.
link. the
the weakest
weakest
link.
link.
4.
4. Recognize
Recognize that
that
the
theweakest
weakest link
link
is
is no
no longer
longer so.
so.
1-31
Six Sigma
AA process
process improvement
improvement method
method relying
relying on
on customer
customer
feedback
feedback and
and fact-based
fact-based data
data gathering
gathering and
and analysis
analysis
techniques
techniques to
to drive
drive process
process improvement.
improvement.
Refers
Refers to
to aa process
process that
that generates
generates no
no more
more
than
than 3.4
3.4 defects
defects per
per million
million opportunities.
opportunities.
Sometimes
Sometimes associated
associated
with
with the
the term
term zero
zero defects.
defects.
1-32
Understand the
importance of upholding
ethical standards.
Code of Conduct for
1-33
Management Accountants
The Institute of Management Accountants (IMA)

Standards of Ethical Conduct for Practitioners
of Management Accounting and Financial
Management have two major parts,
which offer guidelines for:
Ethical behavior.
Resolution for an ethical conflict.
1-34
IMA Guidelines for Ethical Behavior
Recognize
Recognize andand
communicate
communicate professional
professional
limitations
limitations that
that preclude
preclude
responsible
responsible judgment.
judgment.
Maintain
Maintain Follow
Follow applicable
applicable
professional
professional Competence
Competence laws,
laws, regulations
regulations
competence.
competence. and
and standards.
standards.
Provide
Provide accurate,
accurate, clear,
clear,
concise,
concise, and
and timely
timely decision
decision
support
support information.
information.
1-35
Do
Do not
not disclose
disclose confidential
confidential
information
information unless
unless legally
legally
obligated
obligated to
to do
do so.
so.
Do
Do not
not use
use
confidential
confidential
information
information forfor Confidentiality
Confidentiality
unethical
unethical or
or illegal
illegal
advantage.
advantage.
Ensure
Ensure that
that subordinates
subordinates do
do
not
not disclose
disclose confidential
confidential
information.
information.
1-36
Mitigate
Mitigate conflicts
conflicts of
of
interest
interest and
and advise
advise others
others
of
of potential
potential conflicts.
conflicts.
Refrain
Refrain from
from
conduct
conduct that
that
would
would prejudice
prejudice Integrity
Integrity
carrying
carrying out
out
duties
duties ethically.
ethically.
Abstain
Abstain from
from activities
activities that
that
might
might discredit
discredit the
the
profession.
profession.
1-37
Communicate
Communicateinformation
information
fairly
fairlyand
andobjectively.
objectively.
Disclose
Disclosedelays
delaysoror
deficiencies
deficienciesinin information
information
Credibility
Credibility timeliness,
timeliness, processing,
processing, oror
internal
internalcontrols.
controls.
Disclose
Discloseall
all relevant
relevant
information
information that
that could
could
influence
influenceaa users
users
understanding
understanding of of reports
reports
and
andrecommendations.
recommendations.
1-38
Why Have Ethical Standards?
Ethical
Ethical standards
standards in
in business
business are
are essential
essential for
for aa
smooth
smooth functioning
functioning advanced
advanced market
market economy.
economy.
Without ethical standards in business, the

economy, and all of us who depend on it for
jobs, goods, and services, would suffer.
Abandoning ethical standards in business would

lead to a lower quality of life with less
desirable goods and services at higher prices.
1-39
From previous semesters Quiz 1

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Preparing for take-off

ACCT 130 Principles of

Waqar Wasif Sophiya Hira Wardah

The Rote Learner https://

For those finding hard to follow Professional Instruction

Lets get started...

ACCT 250 | PoMA| Waqar Ali | 2017 Spring

Directing and Motivating

Directing and motivating involves managing

Identify the major

Comparison of Financial and Managerial Accounting

2. Time focus Historical perspective Future emphasis

3. Verifiability Emphasis on Emphasis on relevance

4. Precision versus Emphasis on Emphasis on

5. Subject Primary focus is on Focuses on segments

From previous semesters Quiz 1

Understand the basic

Business functions making up the value chain

There are three approaches to

Forecast Sales Order components Store Inventory

Make Sales from

Raw Work in Finished

Customer Places Create Production Generate Component

Goods Delivered Production Begins Components

Lean thinking may be used to improve business

The term supply chain management refers to

A constraint (also called a bottleneck) is anything that

The Institute of Management Accountants (IMA)

IMA Guidelines for Ethical Behavior

IMA Guidelines for Ethical Behavior

IMA Guidelines for Ethical Behavior

IMA Guidelines for Ethical Behavior

Why Have Ethical Standards?

Without ethical standards in business, the

Abandoning ethical standards in business would

From previous semesters Quiz 1

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