F2 Revision Notes

Accounting for
management

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 Management And Financial Accounting

Strategic, Tactical and Operational planning

Strategic Planning

• Senior management

• Long-term objectives and plans (e.g. 5 to 10 years)

• e.g. What new products to launch?

Tactical Planning

• Medium-term, more detailed plans for the next year

• e.g. How many more staff to employ next year?

Operational Planning

• Short-term, day-to-day decisions

• e.g. Which supplier to choose to purchase from next week?

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 Data And Information

• Data is the raw material for data processing.

• Data on its own is meaningless.

• Information is data that has been processed in such a way as to be meaningful to the
person who receives it.

Attributes of good information

Good information should be ACCURATE.

Accurate - Information should be accurate because using incorrect information could have
serious and damaging consequences.

Complete - An information user should have all the information he needs but it should not
be excessive.

Cost-effective - The benefits obtainable from the information must exceed the costs of
acquiring it.

Understandable - Information must be clear to the user. If the user does not understand it
properly he cannot use it properly.

Relevant - Information must be relevant to the purpose for which a manager wants to use
it.

Accessible – Information should be accessible via the appropriate channels of

communication and to the right people.

Timely - Information which is not available until after a decision is made will be useful only
for comparisons and longer-term control, and may serve no purpose even then.

Easy to Use

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