(PDF) Operational Process Management in the Financial

Added on - 30 Apr 2021

  • 11

    Pages

  • 3716

    Words

  • 8

    Views

  • 0

    Downloads

Trusted by +2 million users,
1000+ happy students everyday
Showing pages 1 to 4 of 11 pages
Advanced Operation Finance inFood and Beverage ManagementThere are two types of accounting.1.Management Accounting2.Financial AccountingQuestion and answers related to advanced operationfinance in food and beverage management.1.What is the difference between financial accounting andmanagement accounting?Answer :Definition of Financial AccountingFinancial Accounting is an accounting system which is concerned with thepreparation of financial statement for the outside parties like creditors,shareholders, investors, suppliers, lenders, customers, etc. It is the purest formof accounting in which proper record keeping and reporting of financial data aredone, to provide relevant and material information to its users.Financial Accounting is based on various assumptions, principles andconventions like going concern, materiality, matching, realisation, convention,
consistency, accrual, historical cost, etc. The financial statement consists of aBalance Sheet, Income Statement and Cash flow statement which are preparedas per the guidelines provided by the relevant statute.Definition of Management AccountingManagement Accounting, also known as Managerial Accounting is the accounting formanagers which helps the management of the organisation to formulate policies andforecasting, planning and controlling the day to day business operations of theorganisation. Both the quantitative and qualitative information are captured andanalysed by the management accounting.The functional area of management accounting is not limited to providing a financial orcost information only. Instead, it extracts the relevant and material information fromfinancial and cost accounting to assist the management in budgeting, setting goals,decision making, etc. The accounting can be done as per the requirement of themanagement, i.e. weekly, monthly, quarterly, etc. and there is no format set on thebasis of which it is to be reported.Comparison ChartBasis forComparisonFinancialAccountingManagementAccountingMeaningFinancial Accounting is anaccounting system thatfocuses on thepreparation of financialstatements of anorganization to providethe financial information tothe interested parties.The accounting system whichprovides relevant information tothe managers to makepolicies, plans and strategiesfor running the businesseffectively is known asManagement Accounting.Is itYesNo
compulsory?InformationMonetary informationonly.Monetary and non-monetaryinformationObjectiveTo provide financialinformation to outsiders.To assist the management inplanning and decision makingprocess by providing detailedinformation on various matters.FormatSpecifiedNot specifiedTime FrameFinancial Statements areprepared at the end of theaccounting period whichis usually one year.The reports are prepared as perthe need and requirements ofthe organization.UserInternal and externalpartiesOnly internal management.ReportsSummarized Reportsabout the financialposition of theorganizationComplete and Detailed reportsregarding various information.Publishingand auditingRequired to be publishedand audited by statutoryauditorsNeither published nor audited bystatutory auditors.ConclusionFinancial Accounting and Management Accounting are of great significance, infact, they help the organisation in various ways. As financial accounting is helpfulin the proper record keeping of innumerous transactions and comparison of theperformance of two periods of an entity or between the two entities, while themanagement accounting is helpful in analysing the performance, making astrategy, taking an effective judgement and preparation of policies for the future.
2 .QuestionWhat are examples of variable costs in the food and beverage industryand why it is difficult to control them in the short run?Variable Costs:Variable costs are clearly related to hotel occupancy and business volume. Asbusiness volume or occupancy increases, variable costs will increase; as hoteloccupancy decreases, variable costs should decrease as well.The technical definition for variable costs are those costs that change with the change insales. The obvious ones in the restaurant industry are the food and staff. The staffincludes everyone from the hostess through the dishwashers. The chef, waiters andbusboys; everyone that participates in getting that patron served food and refreshments;all of them are considered staff. The entire staff’s payroll is variable in nature. If you didnot have the customer, you would not need them to provide the service, so their costs dochange with the volume of sales.Here are some examples ofvariable cost of raw material, direct labor, commission.Direct Raw MaterialsDirect raw materials are what the business uses to create the final product. Examples includewood, metals, meat, vegetables, and tobacco, among many others. An important distinction tomake is that these materials only cover those that businesses use to create the final product – notother factors of production.The more demand there is for a final product, the more raw materials the firm needs. In turn, thisincreases its variables costs that increase alongside demand and final output.Direct LaborDirect expenses are costs that are connected to a specific cost object, such as raw materials usedto develop a specific product or software implemented to quality control a consumer good orservice. The majority of direct costs are labor and direct materials. According to the FinancialAccounting Standards Board (FASB), which is the authority on nongovernmental generallyaccepted accounting principles (GAAP), variable and fixed labor costs can be categorized asdirect or indirect.Direct labor includes all employees responsible for producing a company’s products or services.Some examples of direct labor include quality control engineers, assembly line workers,production managers and delivery truck drivers. Unlike indirect labor, direct labor encompasses
desklib-logo
You’re reading a preview
Preview Documents

To View Complete Document

Click the button to download
Subscribe to our plans

Download This Document