Required readings

Read the following Wikipedia articles. Don't get too bogged down in the details at this time. Some of the concepts will be out of the scope of this session. They will be covered in detail in later sessions and courses.

• Accounting
• Financial Accounting
• Managerial Accounting
• Cost Accounting

Summary

• Financial accounting is the act of reporting on the historical activities of an organization by producing financial statements (defined later in this course) with accompanying notes that allow users of those financial statements to make decisions. Users can include management, investors, tax authorities and creditors among others.
• Managerial accounting is the process of making analyses and projections on those historical records (along with other pieces of information) for management to make strategic decisions regarding finance and marketing efforts.
• Cost accounting is the process of identifying the cost of inputs to producing goods and services. This allows management to better make better supply chain management and pricing decisions. It also allows management to determine if taking a product to market will be viable and how much the new product/service will contribute to operating income.
• As you can see, each of these types of accounting are important for all organizations to thrive. Without them, proper planning is not possible.

Problems

Because of the action implications of information, including accounting information, many people will want to capture the information which may mean also capturing the accounting processes that have produced it.

Solutions

• Waiting for contributors