Tricia Jingfang Sapitula

ABM-11 FABM

Review Question:

1. What are the similarities and differences of financial accounting and management
accounting?

- Revenues, expenses, assets, liabilities, and cash flows are all topics that are common to both
financial and management accounting. Both are a part of the larger accounting information system, and
the same system used for financial accounting can also be utilized for management accounting to
generate at least some of the reports and analyses used in the former. The difference between this two
is that when it comes to making decisions, a financial accounting system is designed for those outside
of the company, such investors, regulators, and creditors, while a management accounting system is
created with internal decision-makers in mind, like company executives also known as our managers.

2. Explain how management accounting helps managers in their day-to-day decision

making.

- The cornerstone of management accounting is the analysis and interpretation of financial data
relevant to the internal operations of an organization. This provides managers with the ability to plan,
course-correct, and make choices based on accurate information. The knowledge that can be gained
from management accounting provides business managers with the tools they need to steer their
companies in the proper path.

3. How does management accounting provide value to the business?

- Profit and loss reports, comparisons of budgets, and an analysis of processes and procedures are just
a few of the ways in which management accountants help businesses run more efficiently. To achieve
the anticipated revenue growth, management can use the data in these reports to allocate resources
more effectively.

Activity

1. Explain the function of cost accounting. What are its main users?

- Costing is crucial. Cost accounting helps management control daily operations and plan ahead. Cost
accounting calculates the per-unit costs of a firm's products and finds waste in supplies, money, time,
and equipment. Help set prices and accurately calculate the company's product profit margins and
maximizes these profits. Cost accounting manages raw supplies and orders. This functionality is
needed because overordering holds needless money in reserve. To minimize underordering and
production inefficiency, you'll need to control supplies, labor, and other costs. That’s why management
should be given data to make judgments. Upper management productivity incentive and helps with
budgets and spending. Main users of cost accounting are the internal users such as employees,
directors, managers, supervisors.

2. Distinguish accounting education from accounting research

- Accounting education creates applicable curriculum to train accountants. Accounting research seeks
new knowledge about how economic events affect summarizing, analyzing, verifying, and reporting
standardized financial information and how reported information affects economic events. Accounting
educators influence students to become accountants, publish their research, and teach well. Researchers
usually choose a topic and approach. Accounting research covers information systems, auditing,
assurance, corporate governance, financials, managerial, and tax.

3. Discuss the current status of accounting education in the Philippines.

-Since I have noticed that some high schools in the Philippines teach accounting-related content (the
ABM strand) that is not taught in other high schools, including private schools, I am of the opinion that
the accounting education system in the Philippines is in need of reform. The reason for this is that I
have observed that certain high schools in the Philippines teach accounting-related material. In
addition, I have the impression that they do not teach us in any way, which will make things more
difficult for us when we start college. My friend who is majoring in accounting in college told me that
she has observed that many of her fellow students in the major are unfamiliar with some basic
accounting words and lessons that wasn't covered in their previous years of senior high school, and that
they have had to improve their learning as a result. My friend is one of the many people who have
made this observation. She also mentioned that she has had to improve her learning as a consequence
of the fact that she was not taught these concepts in high school, which makes her emotionally
dissatisfied and stressed out. This is a result of the fact that she has been forced to enhance her learning.
In spite of the fact that she enjoys what she is doing and what she is gaining from it, she still finds it
challenging. Therefore, I believe that they need to make some changes and make sure that we are
taught everything that we need to know in a way that is both fun and active. Some educators choose to
instruct their students using the more time-consuming manner, while others prefer to use an approach
that is not only efficient but also enjoyable.

4. What is auditing? How does it help the whole economy of the country?
- Auditing usually means checking a company's financial statements or giving them an objective look
and evaluation. There are two types of auditing: external auditing and internal auditing. External
auditing is when an independent Certified Public Accountant (CPA) looks at a company's financial
statements to see if they are presented fairly and follow Generally Accepted Accounting Principles
(GAAP). Internal auditing is when a company's operations are looked at to see how well they protect
the company's assets, are accurate, and reliable. It tests the segregation of duties, policies and
procedures, degrees of authorization, and other controls put in place by management to see how well
they work. It is beneficial to the economies of all countries because auditors lower the costs of
financing and contribute to an efficient allocation of capital to drive economic growth.