Professional Documents
Culture Documents
To earn the stakeholders’ trust, managers provide information about their decisions and the
results of those decisions thus Management accountability requires two forms of accounting,
namely financial accounting for external reporting and managerial (or management) accounting
for internal planning and control.
SERVICE COMPANIES
Service companies such eBay (online auction), Verizon (cell phone service), and your local bank
(financial service), sell services. These service companies sell their skills, time and knowledge.
Service companies seek to provide services with the following three characteristics:
1. HIGH QUALITY
2. REASONABLE PRICES
3. TIMELY DELIVERY
They have the simplest accounting since they carry no inventories of products for sale. All of
their costs are period costs, those costs that are incurred and expensed in the same accounting
period.