What is Management Accounting?
The management accounting provides useful information to
management for the performance of different Management function. These
functions includes the formulation of business strategy, planning and
controlling, efficient use of the available resources within organization,
safeguarding the assets of the organization, improvement of internal control
structure, support decision making process.
What are characteristics of Management Accounting?
The main characteristics of management accounting includes
the following
1. Support to Management: The first character of management accounting is that it is basically
done to support the management for performing different management functions.
The information is interpreted, summarized, processed in a way that it should
meet the management needs for planning, decision making and controlling.
2. No legal Requirement: The preparation of management accounts is not a legal requirement, and
mostly done to meet the Management needs, however, in some countries some
Management accounts/reports are required to be prepared i.e. cost of goods sold
report etc.
3. Lack Standard format: The management accounting unlike
the financial accounting does not have standard format and each organization
prepare management accounts according to the need and requirements of their
respective management.
4. Non Monetary Aspect: The Management accounting takes into account non monetary aspects and
different kind of non monetary reports are generated. The material used in
production, unit produced and sold etc.
5.Historical and Future Data: The management accounting takes into account both the
historical data and future data. The management needs future information for
the purpose of planning and decision making.
What are different Management Reports?
There are number of reports which management accountants may
be required to prepared for examples
1. Product wise sales reports
2. Customer wise sales reports
3. Employee wise sales reports
4. Product wise material used reports
5. Product wise normal loss reports
6. Material loss reports
7.
