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Management Accounting Overview
Management Accounting Overview
Relationship Between
Management Accounting V/s
Financial Accounting V/s
Cost Accounting
Prepared by
CA Sanjay Katira
Management
Management Accounting is that part of accounting system
Accounting
which facilitates the management process of decision making.
According to Robert Anthony Management Accounting is
concerned with accounting information which is useful to
management.
Management Accounting includes the following activities : Assist Management Functions at all Levels.
Help in the day to day running of the business.
Promote efficiency in business operations.
Provide the Management with accounting, costing and other
statistical data for use in the process of planning.
Help to ascertain the impact on profit of different courses of
action.
Help to measure and report on the effectiveness of undertaking
and methods used in attaining the objectives of the business.
Management
are :-
Management
Financial Management :- Raising and use of finance,
Accounting
safeguarding assets and optimizing the use of resources are
Managerial
Accounting
1. Objective
Management Accounting is
concerned with accounting
information that is useful
to Management.
2. GAAP V/s
Flexibility
Management Accounting is
entirely optional.
3. Legal
4. Total V/s
Segments
5. Accuracy
6. Frequency
Managerial
Accounting
Financial Accounting is
primarily concerned with
reporting on business
activities of a company as
a whole. The Balance
Sheet and Profit & Loss
A/c relate to the business
as a whole.
Most Management
Accounting information
relates to segments of the
organization, that is,
departments, divisions,
products or to individual
functions.
Audited Financial
Statements have to be
precise.
Management needs
information rapidly and is
often willing to sacrifice
some accuracy in
information to timeliness
of information.
7. Use of
Other
disciplines
Financial Accounting is
bound by conventional
accounting systems and
practices.
Managerial
Accounting
Management Accounting
makes use of information
that is drawn from
financial accounting and
may extend beyond the
boundaries of accounting
to draw upon economics,
finance, statistics,
operations research and
organizational behaviour.
1. Objective
2. Focus
Managerial
Accounting
The Objective of
Management Accounting is
to provide information for
Managerial Decision
Making.
3. Use of
Financial
Accounting
4. Scope
Cost
Accounting
Managerial
Accounting
Management Accounting
does use some financial
accounting techniques
such as ratio analysis,
Fund Flow analysis etc..
Management Accounting
has a wide scope. It
includes Financial
Accounting, Cost
Accounting, Financial
Management, Tax
Planning, Quantitative
Techniques etc