UNIT 5:

MANAGEMENT ACCOUNTING
Cost accounting is about
manufacturing and sales costs.
But what exactly is management
accounting?
 Starter Which of the following are
true statements
1. Management accountants prepare
information which managers use to
make decisions T

2. Management accountants
sometimes suggest ways to improve
financial performance. T

3. Management accounts are

normally for internal use only. T
5.1 LISTENING
a. Listen and fill in each gap with suitable
words and phrases

great ideas Capital markets

companies investments

Investment plans overview

economic conditions
5.1 LISTENING
a. Listen and fill in each gap with suitable
words and phrases

1. overview 5. investments

2. economic conditions

3. companies 6. Capital markets

4. great ideas 7. Investment plans

 5.1 Listening
 I'm sorry, but the external accounts don't help me much. Doesn't matter if
they're in English or Chinese. I need information from you which will help
me run this department.
 What exactly would you like?
 Well, for example, I need something which tells me about the profit we
make on our customers, with some sort of breakdown based on the size
of the company. I want to compare the money we make to the size of the
customer.
 True. We can do that. And how about the costs per customer?
 Exactly. How much we spend on each customer, compared to the size of
their orders.
 That should be possible.
 Great. Also, the profit made per employee. I would like to know where we
are profitable and with which employees we make our money.
 You realize that this is going to be a lot of work for my department.
 Yes, I know. But it's very important for me.
 Can I also have a complete breakdown of our overhead expenses, and
the allocation of them to each of the products that we sell?
 OK. How would you like all this information to be presented?
 In plain English, please. So that even I can understand it.
 b. Listen to the conversation again and
complete the table below

CUSTOMERS EMPLOYEES OVERHEADS

Profits we make on
customers (with Breakdown
breakdown based of overhead
on company size) expenses
Profit per
employee
Allocation of
Cost per overhead
customer expenses to
products
 5.2 a. Complete the word table

Verb Noun Adjective

to allocate allocation -
to complete completion complete
to cost cost costly
to employ employee/er employable
to inform information informative
to produce production productive
to profit profit profitable
to sell sale -
b. Complete sentences
a. We have far too much work. We need to
employ an assistant to help us.
………………….
b. Everything we do depends on having accurate
………………
information
produces/ sells
c. The company……………..…………………. electrical
goods like photocopiers and scanners.
d. We can’t have new laptops for everyone because it’s
costly
simply too ………………
e. The pre-tax …………………
profit was over 12$.
f. We have been ………………………
allocated the conference
room on the ground floor. Let’s meet down there at 2
p.m there at 2 p.m
complete/ produce the report.
g. They hope to ……………………………………..
sales
h. We usually have the highest ………………at Chrismas.
 5.3 True4.1 b
or False

a. Amortization of goodwill and other

intangibles rose in 2007. F

b. More dividends were paid in 2007 than in

2006. T

c. Net earnings increased from 2005 to 2007. T

d. Depreciation and amortization of property,

plant and equipment went up in 2006. T
 5.3 True4.1 b
or False

e. Inventories remained stable during the

period 2005-2007. F

f. There were no additions to property, plant F

and equipment in 2007.

g. Deferred income taxes fell in 2007. F

h.Cash from operating activities was more than

cash for investing activities in 2007 F
 5.4 Match words with definitions

1. Dividend a money that is owed

2. Cash b purchase price minus real value of assets
3. Plant c reduction in value due to wear and tear
4. amortization d money paid out to shareholders
5. goodwill e writing an intangible asset off over a number
of years
6. cumulative f increasing by successive additions
7. depreciation g coins, bank notes, or something that can be
easily exchanged for these
8. Debt h building and equipment for manufacturing

1. d 2. g 3.h 4. e 5.b 6. f 7. c 8.a

 Accounting is "the language of (11)
................... It provides financial
information about a business entity
(12) ...................... people inside and
outside the company. There are 2
types of accounting which are (13)
........... accounting and financial
accounting. (14) ....................
accounting that concentrates on
reporting to people inside the business
entity. (15) ....................... accounting
concentrates on providing
information to people outside the
business entity.
 5.5 Match words with pictures

1. I'm totally out of cash.

2. We would expect cash in advance so that we can
buy the materials.
3. Cash on delivery, please.
4. The A120 is the best - it's a real cash cow.
5. Use the petty cash to pay for the tea, and we'll sort
it out later.
6. They're trying to raise cash by selling some assets,
but they've only got until the end of the month. It's
going to be tight.
 5.5 Match words with pictures

1. b 2. e 3. f 4. a 5. d 6. c
 5.6 a. Matching

A. Beatrice: Managing director

B. Peter: Marketing director
C. Simon: R&D director
D. Gavin: Investment director
E. Shally: Finance director

(1) Consumers simply don’t have the confidence to spend their

money on fancy new products.
(2) We have been working really hard to come up with some
great ideas.
(3) Our investment programme has been ready to go for
months.
(4) Everybody’s forecasts seem to indicate hard times ahead.
(5) I’d like to move to the next item on the agenda.
 5.6 a. Matching

A. Beatrice: Managing director - (5) I’d like to

move to the next item on the agenda.
B. Peter: Marketing director - (1) Consumers
simply don’t have the confidence to spend their
money on fancy new products.
C. Simon: R&D director - (2) We have been
working really hard to come up with some great
ideas.
D. Gavin: Investment director - (3) Our investment
programme has been ready to go for months.
E. Shally: Finance director - (4) Everybody’s
forecasts seem to indicate hard times ahead.
4.3 Rearrange the sentences in the
conversations below to make sense

1. d 6. l 11. c

2. k 7. g 12. h

3. e 8. n 13. f

4. m 9. a 14. i

5. b 10. j
a) Janet: Glad to be of assistance
(j) Claude: Erm, One other thing. There are some
other things I’d like to go over with you, but I’d
prefer to do it in person, not over the phone. Could
you come by the office next week sometime?
Tuesday, say?
(c) Janet: Tuesday? No, sorry, I’m afraid I’m busy on
Tuesday. What about Wednesday morning? At,
say, 9 am?
(h) Claude: Yes, that sounds good, Wednesday at
9. So, Janet, I’ll see you then. Have a good
weekend.
(f) Janet: Yes, you too. Bye.
(i) Claude: Bye
5.6.b Listen and fill in the gap

Peter: Ideas and investments don’t mean (1) ………….cash

in the bank. Consumers simply don’t have the (2)
……………………
confidence to spend their money on fancy new
products. And as for expansion, I think the good old
days are long gone. We should be (3) ……………….
cutting back
Beatrice: Sally, how do you feel about all this?
Shally: We are talking about budgets for the upcoming
year. Everybody’s (4) ………………..
focasts seem to indicate
(5) ……………………….
hard times ahead. And we don’t
even have the money to spend. How are we going to
(6) ……….………..
service more debt, or (7) ……………….. raise more
cash in the capital markets.
Beatrice: So despite our great ideas and investment
plans, it seems the reality is that our budgets for this
year will have to be (8) ………………………...
tight
5.6.b Listen and fill in the gap

1. What will be discussed after this. next time

2. The state of the economy
economic conditions
3. A programme for getting money to grow
investment plan
4. A bad view of the future
negative outlook
5. A reduction in something cut back
6. A difficult situation hard times
7. A period between soon and the distant future
middle term
8. A place where you can buy and sell debt or equity
securities.
capital market
5.7. c. Here are some useful phrases for meetings. Write the
number in the cor
Starting objectives

1 . We have to make a decision today about...

4. What I want to look at is ...

13. Our aim today is to …

5.7. c. Here are some useful phrases for meetings. Write the
number in the cor

Asking for contributions

3. Anything to add, Harry?

15. Sally?
5.7. c. Here are some useful phrases for meetings. Write the
number in the cor

Moving on

9. Shall we move on to the next item

11. I’d like to move on if I may

12. Perhaps we could discuss that at lunch?

5.7. c. Here are some useful phrases for meetings. Write the
number in the cor

Dealing with communication problems

2. So, in other words ...

5. Can you say that again

6. You did say the 24th, didn't you?

8. What I'm saying is ...

14. I didn’t quite catch that…

5.7. c. Here are some useful phrases for meetings. Write the
number in the cor

Summarizing

7. Let me just go over what we have agreed.

10. To sum up then, …………………………..

Practice Look at the following graphs. They
are incomplete. You have one
part, while your partner has the
missing part. Work with partner to
describe the graph.

increase dramatically stable

Practice Look at the following graphs. They
are incomplete. You have one
part, while your partner has the
missing part. Work with partner to
describe the graph.

stable, increase steadily

Practice Look at the following graphs. They
are incomplete. You have one
part, while your partner has the
missing part. Work with partner to
describe the graph.

increase steadily, have some

decrease slightly fluctuation
Practice Look at the following graphs. They
are incomplete. You have one
part, while your partner has the
missing part. Work with partner to
describe the graph.

decrease increase
dramatically, stable steadily
 4.6 Read and answer
We have audited the accompanying
statement of financial position of Megatrap
Corp and consolidated affiliates as of
December 31, 2007 and 2006, and the
statements of earnings, changes in share
owners' equity and cash flows for each of
the years in the three-year period ended
December 31.2007. These consolidated
financial statements are the responsibility of
the Company's management. We have to
express an opinion on these consolidated
financial statements based on our audits.
 4.6 Read and answer
We conducted our audits in accordance with
auditing standards generally accepted in the
United States of America. Under these
standards we have to plan and perform the
audit to obtain reasonable assurance that the
financial statements do not have any material
misstatement. We examined on a test basis the
evidence supporting the figures and disclosures
in the financial statements. We also assessed
the accounting principles used and significant
estimates made by management, and we
evaluated the presentation of the statements.
 4.6 Read and answer

In our opinion, the aforementioned financial

statements present fairly, in all material
respects, the financial position of Megatrap
Corp and consolidated affiliates at December
31.2007 and 2006, and the results of their
operations and their cash flows for each of the
years in the three-year period ended
December 31.2007. in conformity with
accounting principles generally accepted in
the United States of America.
 4.7 Translation

 Kiểm toán được thực hiện để xác định

tính hiệu lực và độ tin cậy của thông tin,
cũng để đánh giá sự kiểm soát nội bộ của
một hệ thống. Mục tiêu của kiểm toán là đưa
ra ý kiến về hệ thống/ tổ chức / ngưởi (...)
được đề cập đến, được đánh giá dựa trên
công việc được thực hiện trên cơ sở thử
nghiệm.
 4.7 Translation

Do những ràng buộc thực tế, kiểm toán cố gắng

cung cấp sự đảm bảo tương đối rằng các báo cáo
không có những sai sót trọng yếu. Do đó, mẫu
thống kê thường được áp dụng trong kiểm toán.
Trong trường hợp của kiểm toán tài chính, một tập
hợp các báo cáo tài chính được cho là đúng sự
thật và công bằng khi họ không mắc những sai sót
trọng yếu, một khái niệm bị ảnh hưởng bởi cả hai
yếu tố định lượng (số) và định tính (chất lượng).
Nhưng gần đây, lập luận rằng kiểm toán vượt qua
tính xác thực và công bằng đang tăng lên.
 4.7 Translation
 Kiểm toán là một phần quan trọng của kế toán. Theo
truyền thống, kiểm toán chủ yếu liên quan đến việc thu
thập thông tin về các hệ thống tài chính và các hồ sơ tài
chính của một công ty hoặc một doanh nghiệp. Tuy
nhiên, kiểm toán gần đây đã bắt đầu bao gồm các lĩnh
vực chủ thể phi tài chính, chẳng hạn như an toàn, an
ninh, hệ thống thông tin, và các vấn đề liên quan đến
môi trường. Với các tổ chức phi lợi nhuận và các cơ
quan chính phủ, nhu cầu đối với hoạt động kiểm toán
ngày càng tăng để kiểm tra thành công của họ trong
việc đáp ứng các mục tiêu nhiệm vụ. Kết quả là, hiện
nay có các chuyên gia kiểm toán là những người
chuyên kiểm tra an ninh, kiểm toán hệ thống thông tin
và kiểm toán môi trường.
 4.7 Translation
 Trongkế toán chi phí, nó là một quá trình xác minh
chi phí sản xuất hoặc việc sản xuất bất kỳ sản phẩm
nào, trên cơ sở tài khoản đo lường việc sử dụng
các vật liệu, lao động hoặc các chi phí khác. Nói
một cách đơn giản hạn, kiểm toán chi phí là sự
kiểm tra các tài khoản chi phí và sổ sách (hồ sơ
minh chứng) có hệ thống và chính xác, và kiểm tra
sự gắn kết với các mục tiêu kế toán chi phí. Theo
Viện Kế toán chi phí và quản lý của Pakistan, kiểm
toán chi phí là "việc kiểm tra sổ sách kế toán chi phí
và xác minh sự việc để xác định chi phí của sản
phẩm phù hợp với các nguyên tắc kế toán chi phí.