Accounting in Business Management

Ashley N. Beckom

Westwood College

BUS501: Quantitative Business Analysis

October 14, 2010

 Abstract

Accounting is a vital part of everyday life. No matter what your position or situation, you can

gain professional value from taking an accounting course. Whether you are interested in or

needing to acquire more knowledge and skills, or looking to advance your career, knowing how

to plan on a personal level as well as how businesses plan and where the concrete information

comes from can be a vital asset to any person that is serious about becoming a well informed and

productive individual. Think about any major decision that you have ever made in your lifetime,

did you not do everything within your power and ability to gather as much information as you

could so that you would be making the most informed and optimum decision possible?
 Accounting in Business Management

Accounting is defined by the American Institute of Certified Public Accountants

(AICPA) as "the art of recording, classifying, and summarizing in a significant manner and in

terms of money, transactions and events which are, in part at least, of financial character, and

interpreting the results thereof." Accounting is also known as "the language of business"

because it is the way that financial information about a business entity is reported.

Our economy is based on accounting, money makes the world go round, correct?

Whether you are “big business” or an “individual” you will utilize accounting at some point in

time, if not daily to record monetary transactions but also to calculate growth. Accounting is a

staple in everyday life and essential in tracking profit and loss for an entity, as well as market

trends. It is important to always know where the money is going and what money is coming

your way.[ CITATION Acc10 \l 1033 ]

Management

According to the Chartered Institute of Management Accountants (CIMA), Management

Accounting is "the process of identification, measurement, accumulation, analysis, preparation,

interpretation and communication of information used by management to plan, evaluate and

control within an entity and to assure appropriate use of and accountability for its resources.

Management accounting also comprises the preparation of financial reports for non-management

groups such as shareholders, creditors, regulatory agencies and tax authorities" (CIMA Official

Terminology).
 The Institute of Certified Management Accountants (ICMA), states "A management

accountant applies his or her professional knowledge and skill in the preparation and

presentation of financial and other decision oriented information in such a way as to assist

management in the formulation of policies and in the planning and control of the operation of the

undertaking." Management Accountants therefore are seen as the "value-creators" amongst the

accountants. They are much more interested in forward looking and making decisions that will

affect the future of the entity, than in the historical recording and compliance (scorekeeping)

aspects of the profession. Management accounting knowledge and experience can therefore be

obtained from varied fields and functions within an organization, such as information

management, treasury, efficiency auditing, marketing, valuation, pricing, logistics, etc.

[ CITATION Man10 \l 1033 ]

Accounting provides managers with accurate and relevant information, set goals,

monitors performance and improves the efficiency and effectiveness of the business as it strives

to continuously grow within it markets.

Conclusion

By having a firm grasp of accounting the how, when and where you should invest or

allocate certain funds and efforts to, can confidently and precisely be determined. In everyday

life no matter what the circumstances and environment, even the most basic accounting

principles are present. Accounting information is essential for an entity to manage and take a

control of the resources that are available.

 References

Accountancy. (n.d.). Retrieved October 14, 2010, from Wikipedia:

http://en.wikipedia.org/wiki/Accountancy

Beckom, B. D. (2010, October 13). President, Bill Beckom Garage Doors, Inc. (A. N. Beckom,

Interviewer)

Management Accounting. (n.d.). Retrieved October 14, 2010, from Wikipedia:

http://en.wikipedia.org/wiki/Management_accounting