Principles Of Accounting Volume 2 Managerial Accounting

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Ardelle Abdullah

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Aug 3, 2024, 5:41:57 PM8/3/24

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The text covers all the usual topics in a Managerial Accounting(MA) course. Service costing and outsourcing are integrated with manufacturing and merchandising costing. Beyond the material discussed in the text, there are consistent references to additional resources for the student to deepen her understanding or get a different perspective. I wish the appendix on Financial Statement Analysis became a regular chapter and that the discussion on Theory of Constraints included a review of Throughput Accounting. There is a useful glossary at the end of each chapter and, by being fully searchable, the book obviates the need for an index.

I didn't find any significant errors in the text. There is a material variance calculation where the total variance is incorrect, but the mistake is obvious and doesn't affect the general point. From my perspective, there is too much emphasis on payback and IRR in the Capital Budgeting chapter, as the student should be warned more strongly about the flaws of those techniques and the theoretical and practical superiority of Net Present Value.

The overall subject of Managerial Accounting and the topics discussed within the text are as relevant as always. The classical discussions of MA techniques are profusely illustrated with numerous examples and a timely discussion on Enterprise Resource Planning (ERP) solutions.

While the topics follow a logical order within the text structure, there is little dependence among chapters, and subjects can be approached independently, for the most part, making the book a valuable reference for real work analysis.

The interface for the online version of the book is user friendly and offers a variety of options for reading and exploring. The hyperlinked table of contents is handy when navigating the text. There are links to instructor and student resources and options for downloading PDF and Kindle formats.

Typical managerial topics are covered appropriately through text, illustrations and examples including links to videos (in the web based, app based and PDF versions of the book). These topics include:Understanding cost behaviorFixed vs. Variable...read more

Additionally, there is a section devoted to resources such as accounting software, financial statements from various types of companies, accounting exams and certificates, and accounting organizations. The answer keys are also included here as well as a compressive index. Each chapter has its own glossary which works well if you were to pick and choose which topics you were to include in your course.

The nature of the topic is that it is rule-based in some instances. The material is presented fairly. If there are multiple methods or situations that involve special treatment, they are covered fully.
An interesting point is that on the website for the book, there is a page devoted to errata and the status of them: ( =Principles%20of%20Accounting%2C%20Volume%202%3A%20Managerial%20Accounting)
An adopter of this book can see that there is a perpetual review from the community to ensure that accuracy is addressed and maintained.

Content is up to date, but not in a way that will quickly make the text obsolete within a short period of time. The text is written and/or arranged in such a way that necessary updates will be relatively easy and straightforward to implement.

The Copyright for this book is 2019. The versions that appear to be addressed the quickest are the web-based and app versions (Android, IOS, Kindle). The PDF and the print version which is derived from it lag behind a bit. Nonetheless, it is relatively simple for materials to be upgraded. Linked videos, which can become obsolete can be replaced if the material is no longer available.

The text is written in lucid, accessible prose, and provides adequate context for any jargon/technical terminology used. The text is easy to understand. Formulas are presented in practical ways with plenty of examples and explanations of how to use in Excel.

The text is internally consistent in terms of terminology and framework. The framework is very consistent from chapter to chapter. It starts with an overview of the topic (Why It Matters), the topics themselves, terminology (Key Terms), a chapter summary, various review problems and exercises and ends with thought-provoking problems. Within each topic, formulas are clearly indicated in a larger size font, bolded and with a background that makes them stand out on the page. The Think It Through paragraphs that appear periodically raise challenging questions that allow a reader to reflex and absorb the material. Your Turn provides an example to work through. The solution is readily visible providing immediate feedback on your success. Occasionally, inserts are included that deal with ethical issues.

This book includes all of the chapters typically found in a Principles of Managerial Accounting text. I liked 13-chapter format because that would fit well in a semester. I was a little disappointed that Chapter 8, Standard Costs and Variances, included only a brief introductory paragraph on fixed overhead variances. It did not give any formulas or instructions for calculating the fixed overhead variances. I was also disappointed that the Budgeting chapter only gave a brief explanation of a flexible budget with out really explaining how one is created.

There is always the possibility of a need to update an accounting textbook due to new standards, but principles level books do not need updating as often as higher-level accounting texts. I did not notice any content in this book that would make it more susceptible to obsolescence than is usual.

In some areas, this book excelled in clarity. I found Chapter 10, Short-Term Decision Making, to be very easy to read and understand. I think my students would be able to comprehend the explanations and follow the examples.

In terms of consistency, I liked that the variable overhead variances were presented in the same format and using the same terminology as the materials and labor variances. Although the budgeting chapter did not explain flexible budgeting as well as I would have liked, I was glad to see that flexible budgeting was included again in the variances chapter. The created a nice bridge between the two chapters.

I would prefer for the chapters on job order costing and process costing to be right after the introduction chapter. This allows for inventory to form a link between the financial accounting class and the managerial accounting class.

This text is sufficiently comprehensive for an introductory managerial course. The topics covered are those typical of a 200 level course. My reasons for not rating the text a 5 are (1) there is not a comprehensive problem included in the text, (2) there is not a test bank, (3) students did not find the PowerPoint slides helpful when reviewing, and (4) the instructors manual only provides the numerical or multiple choice answer; steps to the solution are not included. At times it is difficult to know if the manual contains a mistake or if the reader has misunderstood the question or text.

Most texts contain minor errors and this one does as well. I overlooked a few errors I found in the early chapters but in November 2019 I submitted two issues for review. I received an email acknowledging receipt with a notice that errata received from November to February will be reviewed for the following fall. A check of recent errata submissions for the text shows few submissions requiring corrections. The terminology and examples used in the book are typical of the United States mainland, which can be considered bias but it is not unexpected or even intentional.

As an introductory text, the content focus is basic accounting policies and procedures, which are not prone to frequent change. The nature of the text, therefore, keeps content up-to-date and without risk of becoming obsolete within a short period of time. The Open Stax procedures for handling corrections on an annual basis provides a relatively easy and straightforward means of making updates and revisions. The use of headings and learning objectives means new sections can be added and existing content be updated with relative ease.

The Financial Accounting Standards Board (FASB) has released four major updates since 2014 which go into effect in 2018, 2019, and 2020. There will likely be more coming based on the current political climate. The current updates apply to financial accounting more than managerial, and their complexity places them in higher level accounting classes and more advanced accounting texts. Mentioning them as part of the chapter covering the differences between financial and managerial accounting would increase the perception of the text as current and up-to-date. Similarly, inclusion of simplified explanations of new terms and processes relative to accounting, i.e. bitcoin mining, blockchain, cryptocurrency, would be meaningful to students and keep the textbook relevant and up-to-date.

The text utilizes appropriate language that is understandable and accessible. Key terms appear in bold text the first time they are used in a chapter and an alphabetical list of all the chapter's key terms and their definition appears on the first page following the chapter conclusion and before the chapter assessment tools. Each chapter also includes a summary by learning objective that condenses the material into key, concise points.