2. Meaning:
The term management accounting is
divided as two words, ”Management”
& “Accounting” It is study of
managerial aspects of accounting.
Definition:-
“An accounting which helps for taking
managerial decisions is called as
management accounting”-ICMA
3. Nature & Characteristics of
Management Accounting:-
1.provide information
2.Assists management
3.achieves organizational objectives
4.Enhance management efficiency
5.Helps to decision making
6.Facilitates forecasting
7.Follows no fixed norms & rules
8.Focuses on internal use
9.Ensure overall department efficiency
10.Emphasis cause & effect analysis
4. Merits
1.proper planning
2.Effective
organization
3.Continuous
coordination
4.Maximum return
5.Helps to decision
making
1.It is only a tool
2.No fixed rules &
norms
3.Costly installation
4.Limitation of basic
records
5.Personal bias
De-Merits
5. DIFFERENCE BETWEEN FINANCIAL A/C,
MANAGEMENT A/C
Basis Financial accounting Management accounting
1.Objectives To make periodical reports to
external parties
To assist internal Mgt
2.Base It is based on fixed rules &
norms of
accounting
It has no fixed rules & norms
3.Basic data Actual & past data Projected & estimated data
4.Reports It gives reports as profit & loss &
balance sheet
It gives report as, ratio
analysis , financial statements.
5.Type of
information
used
Only quantitative information is
used
Both quantitative &
quantitative information are
used
6.Reports
prepared
Reports are prepared at the end
of the year
Reports are prepared, when
required for management
6. DIFFERENCE BETWEEN COST A/C,
MANAGEMENT A/C
Basis Cost accounting Management accounting
1.Meaning It is statement of accounting
which helps to ascertainment
of cost per unit
It is statement , which
provide information to
management to decision
making
2.Data used Only quantitative data Both quantitative &
quantitative data
3.period Prepare monthly wise When ever the management
need
4 scope Cost account has scope Mgt A/c has wide scope like
, budgeting , marginal
cost…..etc
5.Cost
accounting is
internal
reporting
Cost accounting is internal
reporting
Provide information to Mgt
(internal)
