We will start to summarize the
certified management accountant book from Gleim 2015 edition, Part 1 contain 13
units as the below,
Unit 1. External financial statements
and revenue recognition.
Unit 2. Measurement, valuation,
and Disclosure: investments and short items.
Unit 3.measurement, valuation, and
Disclosure: Long-term Items
Unit 4.Cost management concepts.
Unit 5.Cost accumulation systems
Unit 6.Cost allocation techniques.
Unit 7.operational efficiency and business
process performance.
Unit 8.Analysis and forecasting techniques.
Unit 9.budgeting concepts,
methodologies and preparation.
Unit 10. Cost and variance
measures.
Unit 11. Responsibility accounting
and performance measures
Unit 12. Internal Controls Risk
and procedures for control
Unit 13. Internal controls
internal auditing and systems controls
Summarizing for Unit One (External financial statements and revenue
recognition.
Unit one consists of seven sub
units they all related to the financial statements and the last two sub units
talking about revenue recognition.
This unit is the first of three on
external financial reporting decisions, the relative weight assigned to this
major topic in part one of the exam is 15%.
1.1
concepts of financial accounting
A-
The objective of general purpose financial reporting
·
The objective of general purpose financial reporting is to report
financial information that is useful in making decisions about providing
resources to the reporting entity.
·
The information reported relates to the entity's economic resources and
claims to them (financial position or balance sheet).
1-
Information about economic resources and claims helps to evaluate
liquidity, solvency, financing needs, and the probability of obtaining
financing.
·
information about financial performance is useful for
1-
Understanding the return on economic resources, its variability and its
components.
2-
Evaluating management.
3-
Predicting future returns.
·
For general purpose financial reporting to be useful to external
parties, they must be prepared in conformity with generally accepted accounting
principles (GAAP).
·
Financial accounting differs from management accounting.
B-
users of financial statements
The first
segmentation,
-
Users with direct interests
1-
Investors or potential investors.
2-
Suppliers and creditors.
3-
Employees
4-
management
-
Users with indirect interests
1-
Financial advisors and analysts.
2-
Stock markets or exchanges
3-
regulatory authorities
The second segmentation,
-
External Users (investors, creditors, financial advisors, stock
exchanges, regulatory agencies.)
-
Internal Users (Management and employees)
C-
Features of financial statements
-
the notes are considered part of the basic financial statements
-
A full set of financial statements include the following statements
1-
balance sheet
2-
income statement
3-
statement of comprehensive income
4-
cash flow statement
5-
equity statement
-
Comparability, to be useful the financial statements should be comparable
with similar information for other entities and the same entity for another
period.
-
Going concern assumption, assumed that the entity will continue
operating indefinitely, as a result liquidation value is not important.
D- Financial statement relationships.
-
Net income or loss from statement of income, is reported and accumulated
in the retained earnings account, a component of the equity section of the statement
of financial position.
-
The component of cash and equivalents from the statement of financial
position are reconciled with the corresponding items in the statement of cash
flow.
E-
Accrual basis of accounting.
-
Financial statements are prepared under the accrual basis of accounting
-
Under GAAP financial statements cannot be prepared under the cash basis
of accounting.
1.2
Statement of financial position (Balance Sheet).
A-
Overview
