(PDF) Operational Process Management in the Financial
11 Pages3716 Words67 Views
Added on 2021-04-30
(PDF) Operational Process Management in the Financial
Added on 2021-04-30
ShareRelated Documents
Advanced Operation Finance in Food and Beverage ManagementThere are two types of accounting.1.Management Accounting2.Financial AccountingQuestion and answers related to advanced operation finance in food and beverage management.1.What is the difference between financial accounting and management accounting?Answer : Definition of Financial AccountingFinancial Accounting is an accounting system which is concerned with the preparation of financial statement for the outside parties like creditors, shareholders, investors, suppliers, lenders, customers, etc. It is the purest form of accounting in which proper record keeping and reporting of financial data are done, to provide relevant and material information to its users.Financial Accounting is based on various assumptions, principles and conventions like going concern, materiality, matching, realisation, convention,
consistency, accrual, historical cost, etc. The financial statement consists of a Balance Sheet, Income Statement and Cash flow statement which are prepared as per the guidelines provided by the relevant statute.Definition of Management AccountingManagement Accounting, also known as Managerial Accounting is the accounting for managers which helps the management of the organisation to formulate policies and forecasting, planning and controlling the day to day business operations of the organisation. Both the quantitative and qualitative information are captured and analysed by the management accounting.The functional area of management accounting is not limited to providing a financial or cost information only. Instead, it extracts the relevant and material information from financial and cost accounting to assist the management in budgeting, setting goals, decision making, etc. The accounting can be done as per the requirement of the management, i.e. weekly, monthly, quarterly, etc. and there is no format set on the basis of which it is to be reported.Comparison ChartBasis forComparisonFinancialAccountingManagement AccountingMeaning Financial Accounting is anaccounting system that focuses on the preparation of financial statements of an organization to provide the financial information tothe interested parties.The accounting system which provides relevant information to the managers to make policies, plans and strategies for running the business effectively is known as Management Accounting.Is it YesNo
compulsory?InformationMonetary information only.Monetary and non-monetary informationObjectiveTo provide financial information to outsiders.To assist the management in planning and decision making process by providing detailed information on various matters.FormatSpecifiedNot specifiedTime FrameFinancial Statements are prepared at the end of theaccounting period which is usually one year.The reports are prepared as per the need and requirements of the organization.UserInternal and external partiesOnly internal management.ReportsSummarized Reports about the financial position of the organizationComplete and Detailed reports regarding various information.Publishing and auditingRequired to be published and audited by statutory auditorsNeither published nor audited bystatutory auditors.ConclusionFinancial Accounting and Management Accounting are of great significance, in fact, they help the organisation in various ways. As financial accounting is helpfulin the proper record keeping of innumerous transactions and comparison of the performance of two periods of an entity or between the two entities, while the management accounting is helpful in analysing the performance, making a strategy, 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 of variable 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
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Assignment on Management Accounting (pdf)lg...
|25
|5201
|57
Difference between Management and Financial Accountinglg...
|8
|1313
|94
Difference between Management and Financial Accountinglg...
|7
|1428
|69
Management Accounting and Reportinglg...
|14
|1027
|47
Financial Accounting vs. Managerial Accountinglg...
|4
|336
|55
Management Accounting and Its Importance in Wiz Phone Limitedlg...
|11
|2833
|26