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Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann
Edition 7ISBN: 978-1111219512Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann
Edition 7ISBN: 978-1111219512 Exercise 1
Arnold Finkelstein and Associates owns a shopping mall in a City of 50.000 people. The mall, containing 240,000 square feet of retail space, was built more than 10 years ago and is in need of repairs and decoration. However, Finkelstein is considering a larger project to upgrade the mall's image and install a food court. The project might also include a 40-percent expansion to bring in more specialty shops and another big name retail store. At percent 65 small and 2 major retailers lease space in the mall. The owner is responsible for the mall's upkeep and promotion and for 4II janitorial and security services.
Required:
What types of accounting information does Finkelstein need to make a decision on the proposed project? How much of this information can be extracted from the owner's accounting records? What additional accounting and non-accounting information is needed?
Required:
What types of accounting information does Finkelstein need to make a decision on the proposed project? How much of this information can be extracted from the owner's accounting records? What additional accounting and non-accounting information is needed?
Explanation
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Accounting is concerned with providing the information, which will help the decision makers in decision making. It involves the process of identifying, measuring, and communicating economic information to users. Such information can be reports, including balance sheets, income statements and cash flows. These are the standard reports which present financial information in a different way. Here, Finkelstein is considering a project to upgrade the mall. Finkelstein will need Management accounting information to make a decision on the proposed project because of following reasons:
• It is primarily forward looking, instead of historical.
• It is based with a degree of abstraction to support the decision making.
• It is designed and intended to use within the organization.
Management accounting is concerned with the activity of providing financial and non-financial information to enable the management to take decisions. It develops both quantitative and qualitative information, which is futuristic in character and relevant for decision-making in the organization. Financial and quantitative information can be extracted from the owner's accounting records.
Additional accounting and non- accounting information, which are needed, are following:
Additional accounting information:
• Information related to the profits.
• Position of the organization.
• What accounting period to follow?
Additional non-accounting information:
• Customer preferences towards the expansion.
• Strength and weakness of the competitors.
• It is primarily forward looking, instead of historical.
• It is based with a degree of abstraction to support the decision making.
• It is designed and intended to use within the organization.
Management accounting is concerned with the activity of providing financial and non-financial information to enable the management to take decisions. It develops both quantitative and qualitative information, which is futuristic in character and relevant for decision-making in the organization. Financial and quantitative information can be extracted from the owner's accounting records.
Additional accounting and non- accounting information, which are needed, are following:
Additional accounting information:
• Information related to the profits.
• Position of the organization.
• What accounting period to follow?
Additional non-accounting information:
• Customer preferences towards the expansion.
• Strength and weakness of the competitors.
Accounting Information Systems 7th Edition by Cynthia Heagy,Constance Lehmann
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