MANAGEMENT

ACCOUNTING

Management + Accounting
=
Management Accounting
WHAT IS MANAGEMENT ACCOUNTING?
• The term management of accounting or ‘Management
Accounting’ represents a merger of two words
‘Management’ and ‘Accounting’.

• Management refers to the functions of planning,

organising, directing, controlling etc.

• While Accounting refers to record, classify, analysis

and presentation of various financial transactions.

In this context, it is a method of accounting that creates

statements, reports and documents that help management in
making better decisions related to their business
performance.
Management accounting is the process of identification,
measurement, accumulation, analysis, preparation, interpretation
and communication of information that assists executives in
fulfilling organisational objectives.

According to Robert Anthony, “Management accounting is

concerned with accounting information that is useful to
management.”
This definition points out 2 things-
1. Information used in management accounting are right from
financial accounting.
2. Only those accounting information are collected compiled,
analysed and interpretate which are useful for managers in the
operation or determination &control of business.
 NO RULE SELECTIVE
BOUNDATIO IN NATURE
N
STUDIES
RELATION
FUTURISTIC BETWEEN
CAUSE AND
EFFECT
CHARACTERISTIC
S
 OBJECTIVE
S
• Uses of information
• Planning
• Decision making
• Motivating
• Controlling
• Coordinating operations
• Reporting
 FUNCTIONS
1. FORECASTING AND
PLANNING
2. ORGANISING

4. CONTROLLING
3. CO-ORDINATING PERFORMANCE

5. FINANCIAL ANALYSIS
AND INTERPRETATION
6. COMMUNTICATION
 SCOPE
• Cost accounting
• Financial accounting
• Budgeting and forecasting
• Data interpretation
• Financial administration
• Management reporting
• Inflation accounting
 TOOLS AND
TECHNIQUES
Financial
planning
Project
Budgetory
appraisa control
l
Analysis
of Marginal
financial costing
statement
Historical
Standard
cost
costing
accounting
ROLES OF MANAGEMENT
ACCOUNTANT
Stewardship accounting

Long term and short term planning

Developing MIS (Management Info. System)

Maintaining optimum capital structure

Participating in management process

Control

Decision making
- Anjali Paswan
- Madiha Zaidi