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Manangement Accounting

Management accounting provides accounting information to aid management activities like planning, controlling, and decision-making. It is more flexible than financial accounting and focuses on the future rather than the past. Management accountants analyze accounting data and provide interpretations to guide decision-making, though the decisions themselves are made by higher authorities. A key goal is increasing organizational efficiency by identifying inefficiencies through data analysis.

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Ishpreet Singh Bagga
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105 views10 pages

Manangement Accounting

Management accounting provides accounting information to aid management activities like planning, controlling, and decision-making. It is more flexible than financial accounting and focuses on the future rather than the past. Management accountants analyze accounting data and provide interpretations to guide decision-making, though the decisions themselves are made by higher authorities. A key goal is increasing organizational efficiency by identifying inefficiencies through data analysis.

Uploaded by

Ishpreet Singh Bagga
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Made ByPRIYA MITTAL

Management accounting can be viewed as Management-oriented Accounting. Basically it is the study of managerial aspect of financial accounting, "accounting in relation to management function". It shows how the accounting function can be re-oriented so as to fit it within the framework of management activity.

The term management accounting is the modern concept of accounts as a tool of management accounting is applied to the provision of accounting information for management activities such as planning, controlling and decision making etc .

No Fixed Norms Followed:In financial accounting, we follow different norms and rules for creating ledgers and other account books. But there is no need to follow fixed norms in management accounting. Management accounting tool may be different from one organization to other organization. Using of different tools of management accounting is fully dependent on the persons who are using it. So, business policy of each organization affects rules and regulation of applying management accounting.

Increase in Efficiency:It is the nature of management accounting that it is used for increasing in the efficiency of organization. It scans the points of inefficiency through analysis of accounting information. By taking action for improving, organization can increase the efficiency

Supplies Information not Decisions:Management accountant supplies accounting facts and information and also provides interpretation, but decision making is fully dependent on higher authorities. Management accounting is just guide.

Concerned with Forecasting :It is the temperament of management accounting that it is fully concerned with forecasting. In management accounting, historical accounting information is analyzed through common size financial statement, ratio analysis, fund flow analysis and accounting data tendency for knowing the probability of next fact.

Financial accounting Cost Accounting Revaluation Accounting Budgetary control Inventory Control Taxation Statistical Methods Interim Reporting

Provides data Modifies data Analyses and interprets data Serves as a means of communicating Facilitates control Uses also qualitative information

Management versus Cost Accounting


ObjectiveThe primary objective of Cost Accounting is to record and to determine the cost of a products or services. But management accounting emphasizes upon presentation of cost data in such a manner which may help the management in efficient decision making and control. ScopeManagement accounting covers a much wider field than cost accounting. The scope of cost accounting is limited. NatureCost accounting is base on past and present facts while Management accounting is mainly future oriented.

Management versus Financial


Accounting

NATUREManagement accounting is subjective and not objective like Financial Accounting.It is fundamentally based on judgment rather than on the measurement

DATA USEFinancial Accounting gives emphasis on the past', while Management Accounting stresses on future. ObjectiveFinancial Accounting is generally limited to the preparation of accounts for the use of external parties but Management Accounting collects and communicates significant information for internal parties

THAK YOU

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