College of St.

John Paul (II) Arts and Sciences

Managerial Accounting

Name: Gabriel M. Burguita Score:

Instructor: Mr. Dionisio L. Robles MBA Date: 02/16/2023

ACTIVITY 5:
1. What are the advantages as well as the limitations of management accounting?

• There are a lot of advantages to using management accounting. First, it provides

data and information that companies use to make plans, and at the same time,
with the help of available information, it saves plenty of time for workers to solve
accounting problems. However, there are also limitations regarding management
accounting, which include insufficient knowledge and data due to the fact that
management accounting is merely a tool; therefore, in order to develop it, it needs
a lot of updating and installation, which is also a burden for the company because
of the cost and expenses.

2. What is management accounting and its importance and limitations?

• Management accounting is a method that an entity uses to make reports,

statements, cost accounting, and sales documents to assess the company's inflows
and outflows of assets. Management accounting is significant because it can
maximize profits while at the same time minimizing losses. However, some
limitations of management accounting are that you cannot only depend on it
when making a decision for the sake of the company; instead, the presence
of management itself is needed.
3. What are the role of management accounting in decision making?

• The role of management accounting in decision-making is to provide information

about the operation and financial analysis of the business, such as budget data,
sales, expenses, and any other related accounting works, which helps management
gain insight into the business's performance and help them make decisions for the
betterment of the company.

4. What is the role of management accounting in an organization?

• Management accounting provides a lot of useful information that is helpful for

accountants when handling the business. Management can perform their job
easily because management accounting provides sales, forecasts, profit planning,
fund flow statements, tax processes, and financial data.

5. What is the most important role of management accounting?

• Because management based its judgments, actions, and goals on this

information, management accounting's most crucial function is to create
monthly reports and record the company's performance.