week 8 internal accounting intro

Question 1

what is internal accounting?

Answer 1

internal accounting is information produced by accountants for internal use by managers for decision making.

Question 2

what does internal accounting involve?

Answer 2

internal accounting involves planning, monitoring and controlling. overall the process of setting objectives and formulating strategies and plans to achieve them, once these strategies are implemented they should be continuously reviewed and evaluated ensuring that they are inline with objectives. lastly ensure that these strategies are in accordance with their planning.

Question 3

what type of data does internal accounting use?

Answer 3

both historical data and future forecasts

Question 4

what happens for internal accounting when the size of a business increases? (also if the quantity of output increases)

Answer 4

the internal accounting framework or system can become more sophisticated

Question 5

what is the cost-benefit principle of internal accounting?

Answer 5

the cost-benefit principle of internal accounting is the concept that the account of certain things within the internal accounts must be justified and the pros must outweigh the cons and also add value to the organisation (be useful). this is because internal accounting is not mandated so accountants must work out what should be included in the internal accounts based of what is useful.

Question 6

what are the characteristics of internal/management accounting?

Answer 6

1. internal users - such as managers
2. mostly forward looking
3. unregulated
4. particular - related tot he usefulness and doesn’t include everything.

Question 7

explain management accounting in full

Answer 7

internal or management accounting is the collection, analysis, and communication of information through accounts used internally to assist managers in making informed decisions to achieve an organisations objectives. the information collected depends on chats considered important Maning that the costs and benefits must be analysed. these accounts are not bound by regulation and will be presented in a way this in=s most useful to managers.