CERTIFICATE LEVEL SUBJECT BA2 Fundamentals of … · SUBJECT BA2 Fundamentals of Management Accounting. 2 ... stakeholders of for profit and not-for-profit enterprises in the public

CIMA OFFICIAL REVISION CARDS

CERTIFICATE LEVEL

SUBJECT BA2

Fundamentals of Management Accounting

2

FUNDAMENTALS OF MANAGEMENT ACCOUNTING

Published by: Kaplan Publishing UK

Unit 2 The Business Centre, Molly Millars Lane, Wokingham, Berkshire RG41 2QZ

Copyright © 2017 Kaplan Financial Limited. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher.

AcknowledgementsThe CIMA Publishing trademark is reproduced with kind permission of CIMA.

Notice The text in this material and any others made available by any Kaplan Group company does not amount to advice on a particular matter and should not be taken as such. No reliance should be placed on the content as the basis for any investment or other decision or in connection with any advice given to third parties. Please consult your appropriate professional adviser as necessary. Kaplan Publishing Limited and all other Kaplan group companies expressly disclaim all liability to any person in respect of any losses or other claims, whether direct, indirect, incidental, consequential or otherwise arising in relation to the use of such materials.

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN 978-1-78415-909-2

Printed and bound in Great Britain

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How to use Revision Cards

The concept

• Revision Cards are a new and different way of learning, based upon research into learning styles and effective recall.

• The cards are in full colour and have text supported by a range of images, making them far more effective for visual learners and easier to remember.

• Unlike a bound text, Revision Cards can be rearranged and reorganised to appeal to kinaesthetic learners who prefer to learn by doing.

• Being small enough to carry around means that you can take them anywhere. This gives the opportunity to keep going over what you need to learn and so helps with recall.

• The content has been reduced down to the most important areas, making it far easier to digest and identify the relationships between key topics.

• Revision Cards, however you learn, whoever you are, wherever you are.........

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How to use them

Revision Cards are a pack of approximately 52 cards, slightly bigger than traditional playing cards but still very easy to carry and so convenient to use when travelling or moving around. They can be used during the tuition period or at revision.

They are broken up into 4 sections. • An overview of the entire subject in a

mind map form (orange). • A mind map of each specific topic (blue). • Content for each topic presented so that

it is memorable (green). • Exam tips with references to past

questions on each topic (purple).

Each one is a different colour, allowing you to sort them in many ways.

• Perhaps you want to get a more detailed feel for each topic, why not take all the green cards out of the pack and use those.

• You could create your own mind maps using the blue cards to explore how different topics fit together.

• If at the revision phase why not take all the purple cards and work through the past questions identified.

• And if there are some topics that you understand, take those out of the pack, leaving yourself only the ones you need to concentrate on.

There are just so many ways you can use them.

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Contents

• The context of management accounting

• Costing

• Planning and control

• Decision making

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Exam guidanceFormat of exam

The assessment for Fundamentals of Management Accounting (BA2) is a two hour computer based exam consisting of 60 compulsory questions, each with one or more parts.

A variety of objective test question styles and types will be used within the assessment, such as:

Multiple choice, multiple response, number entry, drag and drop and hot spot.

Core areas of the syllabus

The syllabus comprises of

A The context of management accounting 10%

B Costing 25%

C Planning and control 30%

E Decision making 35%

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Quality and accuracy are of the utmost importance to us so if you spot an error in any of our products, please send an email to [email protected] with full details.

Our Quality Co-ordinator will work with our technical team to verify the error and take action to ensure it is corrected in future editions.

RevisionCards

overviewfundamentals of management accounting

RevisionCards

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10

Costing

Cost-Volume-Profit analysis

Fundamentalsof

management accounting

Overhead analysis

Marginal and absorption costing

Planning and control

Integrated accounting

systems

Investment appraisal

Presenting management information

Performance measurement

Budgeting

Standard costing

Make or buy decisions

Limiting factor decisions

Relevant cost

Classification of costs

Cost definitions

The context of management accounting

Decision making

Costingsystems

Risk

the context of management accountingfundamentals of management accounting

RevisionCards

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FUNDAMENTALS OF MANAGEMENT ACCOUNTING – The context of management accounting

CIMA

Need for professional body

Role of CIMA

Decision making

Role of management accountant

Controlling

Planning

Purpose of management accounting

The context of management accounting

Position in organisation

Compared to financial accountant

CHOICES

CHOICES

CHOICES

ca$h

Characteristics

Decision making levels

Information

CIMA/IFAC definitions

The Global Management Account

Principles

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Stewardship build trust

The Global Management Accounting Principles

CIMA, together with the American AICPA, have developed the Global Management Accounting Principles which should be used to guide best practice in management accounting.

Communication provides insight that is influential

The impact on value is analysed

Information is relevantInfluence Relevant

ValueTrust

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Management accounting


• For internal use

• no legal requirement

• no set formats or rules

• main purposes are planning, controlling and decision making

Management accounting: “the application of the principles of accounting and financial management to create, protect, preserve and increase value for the stakeholders of for profit and not-for-profit enterprises in the public and private sectors.”

Financial accounting • For external use • required by law • governed by rules and regulations • purpose is the production of

statutory accounts

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Establishing the objectives of an organisation and formulating strategies that can be used to achieve those objectives

Decision making involves considering the information that has been provided and using it to make informed decisions

Once planning has been carried out, targets can be set. This allows for the evaluation of performance


Planning

Decision making Controlling

Management Accounting

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Information

Characteristics of information at different levels:

Strategic Operational

• forecast

• long term

• subjective

• wide

• summarised

• historic

• short term

• objective

• narrow

• detailed

A CCURATE

C OST BENEFICIAL

C OMPLETE

U NDERSTANDABLE

R ELEVANT

A UTHORITATIVE

T IMELY

E ASY TO USE

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The role of the management accountant Roles include:

• formulating strategic plans

• acquisition of finance

• deriving performance and benchmarks

• improving business systems

• generating, communicating and interpreting financial information

• risk management

The role of the management accountant is no longer simply reporting performance to management – it is now as a value-adding business partner

Reporting performance

Enhancing performance

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Dedicated business partner

The finance function

Shared Service Centre (SSC)

Business Process Outsourcing (BPO)

Part of business

Strong business relationships

Detailed knowledge

Cost saving

Best practice

Consistency

Cost saving

Specialists

Releases capacity

The finance function

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INTEGRITY

OBJECTIVITYPROFESSIONAL

BEHAVIOUR

PROFESSIONAL COMPETENCE

AND DUE CARE

CONFIDENTIALITY

Fundamental principles

CIMA

Chartered Institute of Management Accountants

• established 1919

• world’s largest professional body of management accountants

• committed to upholding the highest ethical and professional standards

• globally recognised as CGMA

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Be inspired – make your own notes:

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Exam tips

Questions in this area will be narrative.

• Know the purpose and definition of management accounting. Be able to contrast this with the purpose of financial accounting.

• Know the types of decisions made at various levels in an organisation.

• Know the characteristics of information required at the different levels and know the characteristics of good information.

• Know the options for the position of the management accountant within the organisation and understand the advantages and disadvantages of each option.

• Learn the history and purpose of CIMA.

• Know the five basic principles of the CIMA code of ethics.

• Know the Global Management Accounting Principles

Remember – all parts of the syllabus are examinable

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Sample exam questions

Which THREE of the following are characteristics of good information?

(a) Available(b) Complete(c) Reliable(d) Relevant(e) Correct(f) Timely Answer: B, D and F

Which of the following show the three main purposes of management accounting?

(a) Planning, reporting and controlling(b) Reporting, auditing and controlling(c) Decision making, planning and

reporting(d) Planning, controlling and decision

making

Answer: D

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CERTIFICATE LEVEL SUBJECT BA2 Fundamentals of … · SUBJECT BA2 Fundamentals of Management Accounting. 2 ... stakeholders of for profit and not-for-profit enterprises in the public