CERTIFICATE LEVEL. SUBJECT BA2 Fundamentals of Management Accounting CIMA OFFICIAL REVISION CARDS

Transcription

1 CERTIFICATE LEVEL SUBJECT BA2 Fundamentals of Management Accounting CIMA OFFICIAL REVISION CARDS

2 FUNDAMENTALS OF MANAGEMENT ACCOUNTING Published by: Kaplan Publishing UK Unit 2 The Business Centre, Molly Millars Lane, Wokingham, Berkshire RG41 2QZ Copyright 2017 Kaplan Financial Limited. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Acknowledgements The CIMA Publishing trademark is reproduced with kind permission of CIMA. Notice The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN Printed and bound in Great Britain 2

3 FUNDAMENTALS OF MANAGEMENT ACCOUNTING How to use Revision Cards The concept Revision Cards are a new and different way of learning, based upon research into learning styles and effective recall. The cards are in full colour and have text supported by a range of images, making them far more effective for visual learners and easier to remember. Unlike a bound text, Revision Cards can be rearranged and reorganised to appeal to kinaesthetic learners who prefer to learn by doing. Being small enough to carry around means that you can take them anywhere. This gives the opportunity to keep going over what you need to learn and so helps with recall. The content has been reduced down to the most important areas, making it far easier to digest and identify the relationships between key topics. Revision Cards, however you learn, whoever you are, wherever you are... 3

4 FUNDAMENTALS OF MANAGEMENT ACCOUNTING How to use them Revision Cards are a pack of approximately 52 cards, slightly bigger than traditional playing cards but still very easy to carry and so convenient to use when travelling or moving around. They can be used during the tuition period or at revision. They are broken up into 4 sections. An overview of the entire subject in a mind map form (orange). A mind map of each specific topic (blue). Content for each topic presented so that it is memorable (green). Exam tips with references to past questions on each topic (purple). Each one is a different colour, allowing you to sort them in many ways. Perhaps you want to get a more detailed feel for each topic, why not take all the green cards out of the pack and use those. You could create your own mind maps using the blue cards to explore how different topics fit together. If at the revision phase why not take all the purple cards and work through the past questions identified. And if there are some topics that you understand, take those out of the pack, leaving yourself only the ones you need to concentrate on. There are just so many ways you can use them. 4

5 FUNDAMENTALS OF MANAGEMENT ACCOUNTING Contents The context of management accounting Costing Planning and control Decision making 5

6 FUNDAMENTALS OF MANAGEMENT ACCOUNTING Exam guidance Format of exam The assessment for Fundamentals of Management Accounting (BA2) is a two hour computer based exam consisting of 60 compulsory questions, each with one or more parts. A variety of objective test question styles and types will be used within the assessment, such as: Multiple choice, multiple response, number entry, drag and drop and hot spot. Core areas of the syllabus The syllabus comprises of A The context of management accounting 10% B Costing 25% C Planning and control 30% E Decision making 35% 6

7 FUNDAMENTALS OF MANAGEMENT ACCOUNTING Quality and accuracy are of the utmost importance to us so if you spot an error in any of our products, please send an to with full details. Our Quality Co-ordinator will work with our technical team to verify the error and take action to ensure it is corrected in future editions. 7

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9 overview fundamentals of management accounting RevisionCards

10 FUNDAMENTALS OF MANAGEMENT ACCOUNTING Investment appraisal Make or buy decisions Cost-Volume- Profit analysis Risk The context of management accounting Limiting factor decisions Presenting management information Decision making Integrated accounting systems Fundamentals of management accounting Classification of costs Costing Overhead analysis Cost definitions Relevant cost Planning and control Budgeting Marginal and absorption costing Costing systems Standard costing Performance measurement 10

11 the context of management accounting fundamentals of management accounting RevisionCards

12 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting Position in organisation The Global Management Account Principles Role of management accountant Compared to financial accountant CIMA/IFAC definitions Planning ca$h Need for professional body CIMA The context of management accounting Purpose of management accounting Decision making Controlling CHOICES CHOICES CHOICES Role of CIMA Decision making levels Information Characteristics 12

13 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting The Global Management Accounting Principles CIMA, together with the American AICPA, have developed the Global Management Accounting Principles which should be used to guide best practice in management accounting. Communication provides insight that is influential Influence Relevant Information is relevant Stewardship build trust Trust Value The impact on value is analysed 13

14 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting Management accounting Management accounting: the application of the principles of accounting and financial management to create, protect, preserve and increase value for the stakeholders of for profit and not-for-profit enterprises in the public and private sectors. Management accounting For internal use no legal requirement no set formats or rules main purposes are planning, controlling and decision making Financial accounting For external use required by law governed by rules and regulations purpose is the production of statutory accounts 14

15 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting Management accounting Planning Establishing the objectives of an organisation and formulating strategies that can be used to achieve those objectives Management Accounting Decision making involves considering the information that has been provided and using it to make informed decisions Decision making Controlling Once planning has been carried out, targets can be set. This allows for the evaluation of performance 15

16 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting Information Characteristics of information at different levels: Strategic forecast long term subjective wide summarised Operational historic short term objective narrow detailed A C C CCURATE OST BENEFICIAL OMPLETE U NDERSTANDABLE R A T E ELEVANT UTHORITATIVE IMELY ASY TO USE 16

17 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting The role of the management accountant Reporting performance Enhancing performance Roles include: formulating strategic plans acquisition of finance deriving performance and benchmarks improving business systems generating, communicating and interpreting financial information risk management The role of the management accountant is no longer simply reporting performance to management it is now as a value-adding business partner 17

18 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting The finance function The finance function Dedicated business partner Shared Service Centre (SSC) Business Process Outsourcing (BPO) Part of business Cost saving Cost saving Strong business relationships Detailed knowledge Best practice Consistency Specialists Releases capacity 18

19 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting CIMA Chartered Institute of Management Accountants INTEGRITY established 1919 world s largest professional body of management accountants committed to upholding the highest ethical and professional standards globally recognised as CGMA PROFESSIONAL BEHAVIOUR PROFESSIONAL COMPETENCE AND DUE CARE Fundamental principles OBJECTIVITY CONFIDENTIALITY 19

20 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting Be inspired make your own notes: 20

21 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting Exam tips Questions in this area will be narrative. Know the purpose and definition of management accounting. Be able to contrast this with the purpose of financial accounting. Know the types of decisions made at various levels in an organisation. Know the characteristics of information required at the different levels and know the characteristics of good information. Know the options for the position of the management accountant within the organisation and understand the advantages and disadvantages of each option. Learn the history and purpose of CIMA. Know the five basic principles of the CIMA code of ethics. Know the Global Management Accounting Principles Remember all parts of the syllabus are examinable 21

22 FUNDAMENTALS OF MANAGEMENT ACCOUNTING The context of management accounting Sample exam questions Which THREE of the following are characteristics of good information? (a) Available (b) Complete (c) Reliable (d) Relevant (e) Correct (f) Timely Answer: B, D and F Which of the following show the three main purposes of management accounting? (a) Planning, reporting and controlling (b) Reporting, auditing and controlling (c) Decision making, planning and reporting (d) Planning, controlling and decision making Answer: D 22