Introduction

MANAGEMENT ACCOUNTING

DEFINITIONS

Management Accounting is concerned with accounting information which is useful to management.

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Robert Anthony

Management accountancy is the presentation of accounting information in such a way as to assist the management in creation of policy and the day to day operation of an undertaking.

Anglo American council of productivity

A system of collection and presentation of relevant economic information relating to an enterprise for planning, controlling and decision making.

Institute of Cost and Works Accountants of India

LIMITATIONS OF FINANCIAL ACCOUNTING

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Needs of Modern Business Absence of complete set of principles Differences in the application of principles Monetary facts Historical events Government regulations Incomplete knowledge of cost It is static, not dynamic Failure to provide informational needs of various level Not useful for decision making Not useful for controlling Dead figures without interpretation

NATURE OF MANAGEMENT ACCOUNTING (CHARACTERISTICS)

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Selective nature It does not provide decision It is concerned with future Studies causes and effects Not bounded by the set of rules Concerned with the problem of choice Modification, analysis and interpretation of data

SCOPE OF MANAGEMENT ACCOUNTING

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Financial accounting Cost accounting Budgetary control Statistical methods Methods and technique Taxation Internal financial control Reporting Office services Inventory control

MANAGEMENT A/C. V/S. COST A/C.

Difference Meaning Cost Accounting Cost accounting is a process of ascertaining the cost. Management Accounting Management accounting is one which enables management in doing its functions efficiently.

Objective

The primary object of cost acc is to Management acc aims at determine and record cost of representation of cost data or products and services accounting information for management uses. The scope of cost acc is not wide. It is a part of mgt acc Certain principles are to be followed under cost accounting system oth parties, internal and external have interest in costing. Mgt acc has a wider scope. It includes financial acc, cost acc, statistics, taxation, law etc. No principles are to be followed.

cope

Principles

Parties

Mgt acc is specially designed and meant for management use or internal use.