Управленческий учет на предприятии

- application budgetary methods of control over expenses (it is used at the large enterprises);

- completeness and the analyticity providing exhaustive information on objects of the account (indicators of reports have to be presented in a look convenient for the analysis);

- the frequency reflecting production and operating cycles of the enterprise, established by accounting policies (information is necessary when it is expedient, the schedule of collecting primary data, their processings and group for this purpose is established).

Set of the listed principles provides effectiveness of system of management accounting, but doesn't unify registration process.

1.3 Users of accounting information.

The analysis of activity and needs of various users of accounting information shows that it is lawful to divide them into two main categories:

* internal users, i.e. users in the enterprise where the account (insiders) is carried out. The only category of these users are the persons making decisions in management of the company - managers of various levels of management;

* external users, i.e. the users, not a part enterprises (outsiders) - the external investors (shareholders) who aren't participating directly in management, creditors (banks, creditors, owners of bonds, etc.), suppliers, buyers and other business partners, government bodies (tax services, the commissions on securities and the exchanges, statistical bodies, etc.), employees of the enterprise as hired labor in the person of the representatives (labor unions), the public, charitable organizations and society as a whole.

Accounting information helps users to make better financial decisions. Users of financial information may be both internal and external to the organization.

Internal users of accounting information include the following:

· Management: for analyzing the organization's performance and position and taking appropriate measures to improve the company results.

· Employees: for assessing company's profitability and its consequence on their future remuneration and job security.

· Owners: for analyzing the viability and profitability of their investment and determining any future course of action.

Accounting information is presented to internal users usually in the form of management accounts, budgets, forecasts and financial statements.

External users of accounting information include the following:

· Creditor: for determining the credit worthiness of the organization. Terms of credit are set according to the assessment of their customers' financial health. Creditors include suppliers as well as lenders of finance such as banks.

· Tax Authourities: for determining the credibility of the tax returns filed on behalf of the company.

· Investors: for analyzing the feasibility of investing in the company. Investors want to make sure they can earn a reasonable return on their investment before they commit any financial resources to the company.

· Customers: for assessing the financial position of its supplier which is necessary for a stable source of supply in the long term.

· Regulatory Authorities: for ensuring that the company's disclosure of accounting information is in accordance with the rules and regulations set in order to protect the interests of the stakeholders who rely on such information in forming their decisions.

Information requirements of these two groups of users very differ on obobshchennost degree, depth, coverage, etc. therefore historically there was a division of accounting into two spheres management accounting and the financial account.

Management accounting aims at providing with information of managers insiders, i.e. the persons which are a part of management of the enterprise where the account is carried out.

The financial account prepares information for external users - outsiders, i.e. for the persons which aren't a part of management of this enterprise.

As a part of the financial account it is possible to allocate as the separate direction, tax accounting as information for tax service prepares not as for other external users and considers concrete requirements of the tax legislation.

1.4 Comparison of management accounting with the financial account

The differences between management accounting and financial accounting include:

1. Management accounting provides information to people within an organization while financial accounting is mainly for those outside it, such as shareholders.

2. Financial accounting is required by law while management accounting is not. Specific standards and formats may be required for statutory accounts such as in the I.A.S International Accounting Standard within Europe.

3. Financial accounting covers the entire organization while management accounting may be concerned with particular products or cost centres.

Managerial accounting is used primarily by those within a company or organization. Reports can be generated for any period of time such as daily, weekly or monthly. Reports are considered to be «future looking» and have forecasting value to those within the company.

Financial accounting is used primarily by those outside of a company or organization. Financial reports are usually created for a set period of time, such as a fiscal year or period. Financial reports are historically factual and have predictive value to those who wish to make financial decisions or investments in a company. Management Accounting is the branch of Accounting that deals primarily with confidential financial reports for the exclusive use of top management within an organization. These reports are prepared utilizing scientific and statistical methods to arrive at certain monetary values which are then used for decision making. Such reports may include:

· Sales Forecasting reports

· Budget analysis and comparative analysis

· Feasibility studies

· Merger and consolidation reports

Financial Accounting, on the other hand, concentrates on the production of financial reports, including the basic reporting requirements of profitability, liquidity, solvency and stability. Reports of this nature can be accessed by internal and external users such as the shareholders, the banks and the creditors.

The financial account prepares information for internal and external users, using thus the general for all enterprises of the rule of maintaining. Management accounting uses operational (primary) information irrespective of its quantitative measurement, for example, reviews of buyers of quality of production. Management accounting, being continuation of the financial account, has with it interrelation and certain distinctions. Interaction of the management and financial accounting is reached on the basis of continuity and complex use of primary information, unity of norms and standards, and also unity of standard reference information as a whole, additions of information of one type of the account with data of another, single fixing of all initial variable information in the primary account, interpenetrations of methods or their elements, approach of registration information to places of decision-making, uniform approach to development of tasks of the management and financial accounting of production at design or improvement of systems of automated management by production.

The features have both appearance of the account, but also have the general objects of the account, applied methods and the principles. The general objects - means of labor, objects of the labor, a manpower, movement of objects of the labor in production, a work in progress. The general methods - documentation, inventory, an assessment and accounting, group of objects of the account, the reporting (internal and external). The general principles - a choice of the purposes and tasks, planned and registration units, single introduction of registration information, continuity and addition of one type of the account with another, repeated use of the interim information, efficiency, reliability, information standardization. Comparison of system of the management and financial accounting are shown in table 1.1.

Table 1.1 - Comparison of financial and management accounting

Comparison area	Management accounting	Financial account
Regulation degree	According to the administration decision	Obligation of maintaining
Information accuracy	Set of rough estimates	Insignificant deviations in reflection of data for external users
Information scales	Insignificant deviations in reflection of data for external users	Предприятие в целом
Account purpose	Providing with information of internal users for planning and management	Drawing up the reporting for external users of information
Users of information	Group of workers of the administrative personnel which is a part of the enterprise	Group of the workers who aren't a part of the enterprise
Principles of the account	Usefulness of information for decision-making regardless of norms and legal requirements	The standard, standardized principles of the account
Account structure	There is no basic equality. Three types of objects: income, expenses, assets + liabilities it (is desirable)	Basic equality: assets = obligations + own capital
Used measuring instruments	Any suitable monetary or physical units	Monetary unit, at a course operating for date of operation
Reporting frequency	When it is required	Regularly
Object of the analysis	Economic unit as a whole	Divisions, economic units
Account period	Past and future tense For certain and for a certain period	Past tense For a certain period
Responsibility degree	Disciplinary (reprimand, remark, etc.)	Administrative (a penalty, etc.) under the law

Though between them there are fundamental differences.

1. Maintaining the financial account unlike management accounting is surely provided by the legislation. However according to tax laws of the organization have to realize production at the prices not below cost, and, calculation, is the most important function of management accounting.

2. Main objective of the financial account is drawing up financial documents for external users, while the purpose of management accounting - ensuring intra production planning, management and control.

3. Consumers of information of the first type of the account are external users (tax authorities, auditors etc.). This information doesn't represent a trade secret, i.e. is public. Information of management accounting, on the contrary, prepares for internal users and is a trade secret of the organization.

4. In the financial account accounts and double record, and also documentation and inventory are applied, and in management accounting these methods aren't always used.

5. The financial account is based on the standard principles which regulate record, an assessment and transfer of financial information.

6. Management accounting will be organized proceeding from the purposes and tasks of managing directors, not regulated in any way by the state, serves interests of the organization.

7. In the financial accounting of expense are grouped in economic elements (material inputs, labor costs, assignments on social needs, depreciation charges, other expenses).

In management accounting the group of expenses occurs on carriers of expenses in a section of articles of accounting (raw materials and materials, returnable waste, fuel and energy for technological needs).

8. Frequency of drawing up the reporting in the financial account is established legislative, regulations (following the results of a year, quarterly), in management accounting - as required (monthly, weekly, daily; sometimes - immediately).

The differences between management accounting and financial accounting include:

1. Management accounting provides information to people within an organization while financial accounting is mainly for those outside it, such as shareholders.

2. Financial accounting is required by law while management accounting is not. Specific standards and formats may be required for statutory accounts such as in the I.A.S International Accounting Standard within Europe.

3. Financial accounting covers the entire organization while management accounting may be concerned with particular products or cost centres.

Managerial accounting is used primarily by those within a company or organization. Reports can be generated for any period of time such as daily, weekly or monthly. Reports are considered to be «future looking» and have forecasting value to those within the company.

Financial accounting is used primarily by those outside of a company or organization. Financial reports are usually created for a set period of time, such as a fiscal year or period. Financial reports are historically factual and have predictive value to those who wish to make financial decisions or investments in a company. Management Accounting is the branch of Accounting that deals primarily with confidential financial reports for the exclusive use of top management within an organization. These reports are prepared utilizing scientific and statistical methods to arrive at certain monetary values which are then used for decision making. Such reports may include:

· Sales Forecasting reports

· Budget analysis and comparative analysis

· Feasibility studies

· Merger and consolidation reports

Financial Accounting, on the other hand, concentrates on the production of financial reports, including the basic reporting requirements of profitability, liquidity, solvency and stability. Reports of this nature can be accessed by internal and external users such as the shareholders, the banks and the creditors.

1.5 Production accounts and its role in management

The production account is a drawing up the internal reports intended for use by management personnel at planning, control and decision-making.

The main sections of the modern production account are:

* the accounting of costs for types which shows, what groups of expenses arose in the organization in the course of production (works, services) in the reporting period;

* the accounting of costs for places of their emergence allows to distribute them between organization divisions (the responsibility centers) in which they were carried out;

* the accounting of costs for carriers assumes definition of all expenses connected with production of unit of concrete production or implementation of a certain order.

The production account irrespective of a kind of activity has the following main functions:

*registration of expenses and submission of reports (including classification, generalization, the message and the explanation of data on expenses for internal and external using);

*definition, or assessment of size of expenses (on concrete products, services or divisions of this organization);

*management of cost (obtaining exact data on prime cost of a product and use by their administrative personnel for decision-making on such nodal questions, as price quotation, production structure, the production technology);

*the analysis of expenses (research of data on expenses, their representation in a type of information, suitable for administrative planning and control, decision-making of short-term and long-term action).

Expenses - an indicator of last or future ability of involvement of economic resources in production in interests of achievement of a goal.

Costs planning is a process of definition of the purposes as the organizations as a whole, and its separate divisions in the form of statement of production tasks and means for their performance.

Plans are concretized in estimates (plan indicators in terms of money). For example, the estimate of expenses is a plan of expected expenses; the estimate of the perspective income is a plan of receipts and expenses of future period.

In any estimate possibility of control (by comparison of the actual expenses with planned), definitions of deviations and their analysis is put.

In the course of control of expenses at first standards standards of expenses (for example, standard costs and stocks) are established. It is possible to determine efficiency indicators by these data.

Then distinctions between planned and actual indicators come to light. It allows to define unfortunate trends, to establish reasons for rejection from the plan and to introduce the corresponding amendments.

At a stage of management the assessment of the chosen exact and significant data on expenses and the analysis of received information for decision-making occurs cost.

The control system of cost has to assist the management in adoption of the optimum decisions concerning:

* development of new products;

* price quotations;

* carrying out marketing actions;

* expansions or range narrowings, etc.

1.6 Administrative process and role of the accountant in administrative process

Management process - activity of the subjects of the management integrated in a certain system, directed on achievement of the objectives of firm by realization of certain functions with use of methods of management.

As a rule, management of firm are very diverse, многомерны and have difficult structure (consist of a large number of stages and phases). In a general sense management process consists of the general functions of management which unite in cycles of management.



Figure 1.1 - Management process

The decision - the central moment of all management process. It is possible to tell that an essence of a profession of the manager is decision-making. In a broad sense this concept includes also preparation of the decision (planning), in narrow sense it is an alternative choice. Within advance planning fundamental decisions (what to do are made? ) then in the course of routine planning, the organization, motivation, coordination, regulation, changes of plans - decisions in narrow sense (how to do? ) though such border is conditional.

In practice the problem of the decision is specific pressure of terms, a lack of qualification or information to the decision, unreliability of methods, tendency of managers to routine, disagreements between the persons making the decision (decision-maker). All types of the decisions made in management process, it is possible to classify by numerous signs:

- on object of the decision (focused on the purposes or means, fundamental structural or situational);

- reliability of initial information (on the basis of a solid data, risky and unreliable);

- to periods of validity of consequences (long, average, short-term);

- communications with hierarchy of planning (strategic, tactical, quick);

- to repeatability frequency (casual, repeating, routine);

- to production coverage (for all firm, highly specialized);

- to number of decisions in the course of their acceptance (static, dynamic, one - and multistage);

- the decision-maker (individual, group, from managers, from performers);

- to the accounting of change of data (rigid, flexible);

- independence (autonomous, supplementing each other);

- difficulties (simple and difficult).

The most typical decisions made by managers of firms, it is possible to classify as follows (researches in Germany in 1983):

- situational, routine, departmental decisions;

- solutions of average complexity (the current specifications of sphere of activity, the decision under a stress and with a pressure of terms, decisions in exceptional cases);

- innovative and defining decisions.

In practice, certainly, everything passes not so smoothly:

- substages can pass not in such sequence, they can break, jump, submit to feedback, the overlappings, parallel movement;

- decision-making process especially is individual, than the decision is more difficult;

- the limited volume of information limits rationality of the decision, the intuition role grows;

- preliminary installations on alternatives influence a decision choice;

- there is no aspiration to the optimum decision if there is a satisfying;

- participation of several persons and organizational conditions change an order of passing of substages;

- managers variously interfere with structure and decision-making process, influencing, thus, their quality.

Most often the following cases of intervention of managers meet:

- aprioristic definition of the person making the decision to execution;

- definition of the circle of people, participating in the decision;

- participation of the decision-maker in his execution;

- definition of the moment of the decision and its place;

- definition of a technique and decision accounting;

- task of the purposes and their relative importance;

- restriction of number of alternatives;

- involvement of persons of a certain competence;

- control of a course of the decision;

- granting or information restriction;

- links to similar decisions;

- moral and material influence;

- freedom expansion in decisions;

- assignment of responsibility for decisions.

Two directions of distribution of powers are possible: delegation of powers, decision centralization.

The following distribution of decisions (is the most typical for the western firms). High centralization: - decisions on investments, financial decisions, personal appointments in the top management. Limited centralization: decisions on research and development. Limited delegation: decisions on investments within the budget, the decision on the personnel.

High delegation: current production questions, decisions on production sale.

Risk at decision-making

The risk is understood as danger of the wrong decision. As risk - danger of losses, it means a negative deviation from the purpose. As the future never isn't known, all decisions are connected with risk.

The risk can consist in influence on profitability, the income, expenses, a turn and liquidity (opportunity always to pay the bills).

It is possible to distinguish risk:

- the general (threatens the enterprise as whole);

- special on a factor (raw, on the equipment, energy, the personnel, the capital);

- special at production production (the marriage, not those ways, in research and development, in storage);

- special at production assessment (at sale, in shops, in guarantees, in payment).

The risk can be subdivided on kalkuliruyemy and not kalkuliruyemy, insured and isn't present.

Figure 1.2 Administrative process

Administrative process includes the following elements:

* Planning.

In the course of planning accountants help to formulate plans, providing with information for the decisions concerning production and sales of a concrete type of production, pricing, investments. Besides, the accountant plays a key role in the course of the estimating, being the financial plan, various decisions made for implementation made by managers.

* Control.

In the course of control accountants make reports on estimate execution in which the actual results are compared to the planned results for each center of responsibility (division, a segment). By means of reports managers have opportunity to study kinds of activity which disperse from the plan.

* Communication.

Accountants help communication process by means of establishment and providing effective system of the reporting. For example, by means of the estimate there is a finishing of plans to managers who are responsible for their performance. Besides, information containing in estimates, can be useful to coordination of work of managers as they learn not only about demands made by it, but also about restrictions with which heads of other divisions face.

* Motivation

Estimates and reports on execution the estimates prepared by accountants have huge impact on motivation of the personnel in the organization. Estimates motivate managers on achievement of the established purposes. In turn, reports on execution of the estimate motivate the personnel by means of reporting of information on the actual results in comparison with goals.

Let's consider decision-making process model in more detail.

1 stage. Definition is more whole.

Before making the correct decisions, it is necessary to define the purpose or the main direction to estimate preference of one option of actions before another. From here definition of the purposes or organization tasks has to be the first stage of process of decision-making. That has to be such purposes and tasks - a question far not idle time, and concerning it active polemic is conducted. The economic theory usually recognizes that the companies seek to get the maximum profit for the owners or if to speak more precisely, to increase wealth of holders of actions. Besides, maximizing profit finally leads to maximizing the general economic welfare of all society. In other words, improving own situation, thereby you work for the benefit of all other people - members of the same society. At the same time, it is easier to carry out interests of the company of subjects, than the profit will be higher at it.

2 stage. Search of alternative options of actions.

The second stage of process of decision-making consists in search of a number of possible options of actions (or strategy), directed on achievement of a goal. In particular, the company is recommended to resort to one or several of the following options of actions:

* development of new types of production for realization in the existing markets;

* development of new types of production for the new markets;

* creation (development) of the new markets for realization of let-out types of production.

3 stage. The data collection, connected with alternative actions.

As the problems connected with made decisions, are often shown in the conditions of uncertainty, it is necessary to consider a number of factors which can't be supervised by the persons making decisions, and such factors can influence each of alternative versions of decisions.

Such uncontrollable factors also are called as external conditions. Examples of such conditions: economic boom, high rate of inflation, decrease in business activity, competitiveness, etc.

During realization of option of the actions chosen by the company, its resources will be involved for a long time, and position of the company will depend in many respects on the general situation in which she will act, i.e. from the products, the served markets and ability adequately to react to future changes. The choice of a course defines also long-term prospects of the company, and, as a result, type of those decisions which it can accept in the future. Such decisions usually are called long-term or strategic, they have a great impact on future position of the company. Therefore it is very important to obtain the relevant data on opportunities of the company and on that environment in which she will act. Besides strategic, or long-term, decisions managers also make the decisions which aren't demanding long attraction of resources of the company. Such decisions belong to category short-term or quick, usually they are accepted by managers of lower levels of management. At the heart of such decisions physical, personnel and financial resources lie the current external situation, and also available at present time at the disposal of the company. Similar decisions substantially are defined by quality of long-term decisions. Examples of short-term decisions are answers to the following questions:

1. What prices of realization have to be established on company production?

2. How many production of a different look (in units) needs to make?

3. What mass media need to be used for advertizing of production of the company?

4. What level of service will be offered consumers, for example, on such indicator, how number of days for order delivery? How the aftersales service will be organized?

For development of short-term decisions it is also necessary to collect the relevant data, for example, at the prices of realization of production of the competitors, expected demand for goods at the alternative prices of sales and to predicted expenses at various options of production. This information is required for pricing and decision-making on output of products. After necessary information is collected, managers have to solve, what option of actions should be chosen.

3 stage. The data collection, connected with alternative actions.

As the problems connected with made decisions, are often shown in the conditions of uncertainty, it is necessary to consider a number of factors which can't be supervised by the persons making decisions, and such factors can influence each of alternative versions of decisions.

Such uncontrollable factors also are called as external conditions. Examples of such conditions: economic boom, high rate of inflation, decrease in business activity, competitiveness, etc.

During realization of option of the actions chosen by the company, its resources will be involved for a long time, and position of the company will depend in many respects on the general situation in which she will act, i.e. from the products, the served markets and ability adequately to react to future changes. The choice of a course defines also long-term prospects of the company, and, as a result, type of those decisions which it can accept in the future. Such decisions usually are called long-term or strategic, they have a great impact on future position of the company. Therefore it is very important to obtain the relevant data on opportunities of the company and on that environment in which she will act. Besides strategic, or long-term, decisions managers also make the decisions which aren't demanding long attraction of resources of the company. Such decisions belong to category short-term or quick, usually they are accepted by managers of lower levels of management. At the heart of such decisions physical, personnel and financial resources lie the current external situation, and also available at present time at the disposal of the company. Similar decisions substantially are defined by quality of long-term decisions. Examples of short-term decisions are answers to the following questions:

1. What prices of realization have to be established on company production?

2. How many production of a different look (in units) needs to make?

3. What mass media need to be used for advertizing of production of the company?

4.What level of service will be offered consumers, for example, on such indicator, how number of days for order delivery? How the aftersales service will be organized?

For development of short-term decisions it is also necessary to collect the relevant data, for example, at the prices of realization of production of the competitors, expected demand for goods at the alternative prices of sales and to predicted expenses at various options of production. This information is required for pricing and decision-making on output of products. After necessary information is collected, managers have to solve, what option of actions should be chosen.

4 stage. Choice of optimum option of actions from the alternatively possible.

In practice decision-making includes comparison of competing alternative options of actions and a choice from them what in the best way meets requirements of the organization. If to assume that the purpose - receiving in the future of the maximum net earnings of cash, the choice of option has to be based on comparison of distinctions between cash streams. Therefore, to each alternative option it is necessary to apply the prirostny analysis of net earnings of cash. After that all alternative options are ranged by the sizes of these net earnings and at what these indicators are maximum, of course, taking into account additional qualitative factors get out.

5 stage. Implementation of the made decisions.

After alternative options of actions are chosen, they need to be realized as part of process of drawing up the estimate. The estimate (budget) - is the financial plan made for implementation of various decisions, made by managers. Estimates consider receipts in the organization of cash and payments from it, and also receipts from production and expense realization. All estimates are consolidated in the uniform document in which in the generalized look intentions of the organization and expected results of activity are expressed. Such document is called as the generalized financial estimate (master budget) and consists of the budget profit and loss account, calculation of movement of cash and the balance sheet. Drawing up the estimate is intended in order that each employee of the organization knew about a role which he has to play at implementation of the decisions made by the top management.

6 stage. Comparison of the actual and planned results.

The last stages of model of process of decision-making, comparison of the actual and planned results, and also measures for elimination of deviations from the plan if they arise, belong to control process in the company. Administrative function of process of control and regulation includes measurement of results of activity, providing data on them and development of the correcting measures directed on that the goals were reached and plans are realized. In other words, a problem of process of control and regulation - to ensure such functioning that initial plans were executed [1].

For monitoring behind functioning indicators the accountant prepares reports on execution of the estimate and provides them to the corresponding managers responsible for implementation of these or those decisions. These reports containing data on comparison actual (the actual expenses and receipts) and the planned results (budget expenses and receipts), have to prepare systematically. Data of these reports by comparison of planned and actual results provide necessary feedback. In such reports the special attention should be paid on those kinds of activity which disperse from the plan that managers could pay to these deviations due attention and time. In this case the way of management by exception is applied. For effective control it is necessary that correcting actions were carried out so that the actual results came to the planned level. In turn, if results of comparison show that the accepted plans can't be reached, plans also can be specified.

7 stage. Taking measures to elimination of deviations from the plan.

Correcting actions on reduction of the actual results in compliance with planned or updating of plans.

Questions

1. Concept of management accounting.

2. Users of accounting information.

3. Comparison of the management and financial accounting.

4. Production and management accounting.

5. Administrative process and role of the accountant in administrative process.

Situation tasks

1. Describe difference financial from management accounting. Answers submit in the form of the table.

Indicators	Financial account	Management accounting
Purpose
Standardization
Obligation of maintaining

Tests

1. How many stages management of enterprise economy includes:

A) 1;

B) 2;

C) 3;

D)4;

E) there is no right answer.

2. At what stage of management to be set the purpose of functioning of operated object, quantitative and qualitative characteristics of its development are defined:

A)1;

B) 2;

C) 3;

D) 4;

E) there is no right answer.

3. At what stage of management are kept account also control of a condition of object for the purpose of receiving the intermediate or end results by which extent of achievement of goals is estimated:

A) 1;

B) 2;

C) 3;

D) 4;

E) there is no right answer.

4. At what stage of management necessary conditions for functioning of operated object will be organized:

A) 1;

B) 2;

C)3;

D) 4;

E) there is no right answer.

5. At what stage of management regulation of the deviations arising during realization of goals, and also stimulations of workers and collectives for the purpose of increase of productivity of their activity is carried out:

A) 1;

B) 2;

C) 3;

D) 4;

E) there is no right answer.

6. At the first stage of production management the following functions of management are applied:

A) organization and coordination;

B) economic analysis, forecasting, planning, decision-making;

C) account and control;

D) regulation and stimulation;

E) there is no right answer.

7. At the second stage of production management the following functions of management are applied:

A) organization and coordination;

B) economic analysis, forecasting, planning, decision-making;

C) account and control;

D) regulation and stimulation;

E) there is no right answer.

8. At the third stage of production management the following functions of management are applied:

A) organization and coordination;

B) economic analysis, forecasting, planning, decision-making;

C) account and control;

D) regulation and stimulation;

E) there is no right answer

9. Management accounting is:

A) the subsystem of the financial account directed on research of reserves of increase of efficiency of finance - economic activity;

B) the integrated system of the intraeconomic account submitting information on expenses and the income of the organization and its structural divisions for the purpose of adoption of necessary administrative decisions;

C) the special type of the account directed on decrease in burden of the taxation;

D) account system which is conducted only by managers of the organization;

E) there is no right answer.

10. The main functions of management accounting treat:

A) forecasting, planning, organization, account, control, regulation, stimulation, analysis, decision-making;

B) planning, orders (orders), account, control, analysis;

C) organization of administrative structures and their interaction;

D) acceptance and transfer of necessary orders, orders of instructions, recommendations, instructions;

E) there is no right answer information;

E) there is no right answer.

11 . The main objects of management accounting treat:

A) expenses, income, transfer prices, system of budgets, intraeconomic reporting;

B) assessment and accounting, receptions of the economic analysis, economic-mathematical and statistical methods;

C) documentation and inventory, economic-mathematical and statistical methods;

D) documentation and inventory, assessment and accounting, receptions of the economic analysis, economic-mathematical and statistical methods;

E) there is no right answer.

12. The method of management accounting is:

A) planning and analysis of expenses and income of the organization and its structural divisions;

B) budgeting, intraeconomic reporting, transfer pricing, system of accounts and double record;

C) organization assets and liabilities, balance generalization, intraeconomic and financial statements;

D) set of ways and the receptions reflecting a subject of management accounting;

E) there is no right answer.

13. Management accounting is:

A) component of the financial account;

B) component of the production account;

C) component of tax accounting;

D) the integrated system of information on expenses and the organization income;

E) there is no right answer.

14. The production account is:

A) component of the financial account;

B) component of management accounting;

C) component of tax accounting;

D) system of information on organization expenses;

E) there is no right answer.

Recommended literature

1. Aldaniyazov, K.N.Upravlenchesky accounting and analysis: studies. grant / Korkembay Nazarovich Aldaniyazov. - Almaty: Yurid. litas. 2008 . - 364 pages.

2. Druri K. Introduction in the management and production accounting. - M: Audit, 1994. - 10 pages.

3. Armless P.S.Uchet of expenses and calculation in the industry (Questions I of a series, methodology, the organization).- M: Finance and statistics, 2003. - 50 pages.

Chapter 2. Classification of expenses

2.1 Concept and purposes of expenses

An accounting system measures costs which are later used for a number of purposes such as: (i) profit determination, (ii) performance evaluation, (iii) inventory valuation and (iv) cost control. It is, therefore, very essential to understand what cost means and how it is calculated.

What is a cost? It is something of value given up in exchange for something else. It is price paid to acquire some goods or services. It includes money, materials, labor and time. But the term «cost» conveys multiple meanings and there are different costs for different purposes. This hub aims to provide an understanding of the cost terms and concepts that are used in literature of managerial accounting.

Expenses are one of the major economic categories.

Existence of detailed information on expenses gives the chance: to establish the price of products, services, to estimate profitability of processes, efficiency of use of resources separate divisions, the importance of customers from the point of view of their contribution to enterprise profit. Basic principles of the organization of the accounting of expenses for production.

The organization of the accounting of expenses for production is founded on the following principles: invariance of the accepted methodology of the accounting of expenses for production and calculation of product cost within a year; completeness of reflection in the accounting of all economic operations; the correct reference of expenses and the income by the reporting periods; differentiation in the accounting of the current expenses for production and capital investments; regulation of structure of product cost; coherence of the actual indicators of product cost with standard and planned.

One of the main conditions of receiving reliable information about product cost - accurate definition of structure of production expenses (Fig. 2.1).

Figure 2.1 Classification costs

Objects of the accounting of expenses for production.

Objects of the accounting of expenses for production are the organization as a whole, its productions, a place of emergence of expenses, types of production (works, services).

There are three types of expenses of the enterprise subdivided on a reproduction sign:

- costs of production and the realization of production forming its prime cost. These are the current expenses, that is these are expenses on usual kinds of activity;

- costs of expansion and production updating, large it is uniform - temporary investments of means of capital character;

- expenses on welfare, domestic and others not - production needs of the enterprise.

In management accounting the classification of expenses is applied, it is very various and depends on that what administrative task it is necessary to solve. These are such tasks as:

- calculation of prime cost of made production and determination of the size of the got profit;

- adoption of the administrative decision and planning;

- control and regulation of a production activity of the centers of responsibility.

According to the above-stated tasks classification of expenses is presented in table 2.1.

Table 2.1. - Classification of expenses depending on the purpose of management accounting

Tasks	Classification of expenses
Calculation of prime cost of made production, estimation of cost of stocks and the got profit	Entering and expired Direct and indirect The main and laid on Entering into prime cost (production) and expenses of the reporting period (periodic) Single-element and complex Current and single
Decision-making and planning	Constant (conditional and constants) and variables Accepted and not taken into consideration at estimates Irrevocable expenses Imputed (the missed benefit) Limit and incremental Planned and not planned
Control and regulation	Controllable and uncontrable

Costs of production and production realization (works, services), include expenses recognized in reporting year and in the previous reporting periods and the passing expenses, the income concerning to receiving during the subsequent reporting periods.

Depending on the purposes for which information on expenses is used, they can be classified by three directions. According to the first direction of classification, for determination of prime cost and financial results of activity of the enterprise of expense it is possible to divide as direct and indirect. Factor cost - is what are directly connected with process of production or production realization by the enterprise. This type of expenses can be easily carried to a certain type of a product. A factor cost treat: raw materials and materials accessories; main salary of workers; others. Indirect expenses are connected with work of the enterprise or its division as a whole, or with production of several types of production, they can't be carried directly on prime cost of a concrete type of production. To indirect expenses carry: - heating and lighting; compensation of managers; depreciation; others.

Expenses is the cost of the resources used on definite purposes.

In this definition it is necessary to allocate three moments:

* expenses are defined by the size of the used resources (material, labor, financial);

* the size of the used resources has to be presented in terms of money for providing a soizmereniye of various resources;

* the concept of expenses has to correspond surely to specific goals and tasks (production, performance of work, rendering services, implementation of capital investments, functioning of department, service, etc.). Without the indication of the purpose the concept of expenses becomes uncertain.

Leaving of assets doesn't admit organization expenses:

* in connection with acquisition and creation of non-current assets;

* as deposits to the authorized (depository) capitals of other organizations, in connection with acquisition of actions of joint stock company and other securities not for the purpose of resale (sale);

* under contracts of the commissions, agency and other similar contracts in favor of the committent, the principal, etc.;

*as advance payment of material and production stocks and other values, works, services;

* in repayment of the credit, the loan received by the organization.

The provided list of leaving of the assets which aren't recognized as expenses, shows that the concept «expenses» provides restriction on the purpose of use of resources.

For example, costs of acquisition of fixed assets in the reporting period won't be recognized as expenses - only amortized assignments will be referred to expenses on the acquired fixed assets.

Expenses is the cost of the resources used on definite purposes.

In this definition it is necessary to allocate three moments:

* expenses are defined by the size of the used resources (material, labor, financial);

* the size of the used resources has to be presented in terms of money for providing a soizmereniye of various resources;

* the concept of expenses has to correspond surely to specific goals and tasks (production, performance of work, rendering services, implementation of capital investments, functioning of department, service, etc.). Without the indication of the purpose the concept of expenses becomes uncertain.

Leaving of assets doesn't admit organization expenses:

* in connection with acquisition and creation of non-current assets;

* as deposits to the authorized (depository) capitals of other organizations, in connection with acquisition of actions of joint stock company and other securities not for the purpose of resale (sale);

* under contracts of the commissions, agency and other similar contracts in favor of the committent, the principal, etc.;

* as advance payment of material and production stocks and other values, works, services;

* in repayment of the credit, the loan received by the organization.

The provided list of leaving of the assets which aren't recognized as expenses, shows that the concept «expenses» provides restriction on the purpose of use of resources.

For example, costs of acquisition of fixed assets in the reporting period won't be recognized as expenses - only amortized assignments will be referred to expenses on the acquired fixed assets.

Organization expenses depending on their character, conditions of implementation and activity of the organization are divided into expenses on usual kinds of activity and an other expenses (operational, non-operating, extraordinary).

Economically justified expenses are considered as the reasonable. For this purpose on some expenses for the taxation limits (consumption rates) within which they are subject to recognition, - on payment of daily allowance when finding workers in business trip, a field allowance, compensation for use for office trips of personal cars and to some other expenses are set. Similar expenses admit accounting on the actual expenses.

The expenses documented, issued in the order established by the legislation are considered as the documentary confirmed. It should be noted that this condition of recognition of expenses in the taxation doesn't differ from recognition of expenses in accounting as in accounting all entries in registration registers are carried out only on the basis of correctly prepared accounting document.

The structure of the expenses recognized in the taxation, differs from structure of the expenses recognized in accounting a little.

Significantly classifications of expenses for accounting and the taxation differ. Unlike the classification of expenses of the organization given above in tax accounting expenses are divided into the expenses connected with production and realization of production, and non-operating expenses (without allocation of operating and extraordinary expenses).

The concept «expenses» is used generally in the economic theory as the concept «expenses» in relation to production (works, services). The concept «and «costs of production» can be considered costs of production as identical.

As identical it is possible to consider also concept «costs of production and production sale», «costs of production and addresses» and «expenses on usual kinds of activity». Thus the concept «costs of production and addresses» is applied now generally by the organizations of trade and public catering.

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