GAAP, JIT, and TOC

3896 Words16 Pages
Learner: Trieu The Hiep Course ID Number: MG5012 Faculty Mentor: Dr. Laurel Cobb Course Title: Managerial Accounting for Decision Making Assignment 1- GAAP, JIT, and TOC Question/Prompt Please describe the implications of GAAP in an international company and how JIT and TOC are important to making managerial decisions on inventory and activity based accounting. Please delineate various cost categories and briefly describe each cost type and application within an enterprise. Review of Subject Generally Accepted Accounting Principles (GAAP) is a widely accepted set of rules, conventions, standards, and procedures for recording, summarizing and reporting financial information and is widely applied by international companies nowadays. “The business environment in recent years has been characterized by increasing competition and a relentless drive for continuous improvement. Several approaches have been developed to assist organizations in meeting these challenges- including just-in-time (JIT) and the theory of constraints (TOC).” (Garrison and Noreen, 2000, p.33) “In managerial accounting, the term cost is used in many different ways. The reason is that there are many types of costs, and these costs are classified differently according to the immediate needs of management.” (Garrison and Noreen, 2000, p.44) This paper will discuss the implications of GAAP in an international company, the importance of JIT and TOC in decision making and will explain the concept of cost classifications. Discussion The Implications of GAAP Generally Accepted Accounting Principles (GAAP) is a widely accepted set of rules, conventions, standards, and procedures for recording, summarizing and reporting financial information, as established by the Financial Accounting Standards Board (FASB), an independent self-regulatory organization. In order to understand the implications of
Open Document