Management accounting selects only the most relevant information from financial accounting data to help management make planning and control decisions. It emphasizes future projections using tools like standard costing, variances, and budgets. Management accounting modifies, analyzes, and interprets financial data to provide management with supporting information for decision-making. It allows flexibility and considers non-financial factors, with the goal of improving efficiency and achieving organizational objectives.

1. FEATURESOFMANAGEMENT
ACCOUNTING
PREPARED BY
Prof. Ravneet Kaur

2. 1. Selective Nature
Management accounting selects only few information out of much information
provided by the financial accounting system. The reason is that all the financial
accounting informationare not necessary to management.
2. More Emphasis on Future
There is no meaning of collection of historical data. The management
accounting attempts to highlight upon what should have been. In this aspect,
the use of standard costing, cost variances and budgetary control emphasizes to
highlightupon the futuristic nature of managementaccounting.
FEATURES OF MANAGEMENT ACCOUNTING

3. 3. Provides only information but no decision
The financial accounting information is presented in the different basis and in
different manner which helps the management for proper planning and take
quality decisions. It is up to the intelligence of management executives to take
valid decisionout of availableinformation.
4. The Problemof Choice
An attempt is made to solve the managerial problems. For which, a comparative
analysis of various available alternatives are taken into account and only that
alternative is normally selected which seems to be more attractive and profitable.
For example, Capital Budgeting techniques.
FEATURES OF MANAGEMENT ACCOUNTING

4. 5.Study Causes andEffects Relationship
Under financial accounting system, profit and loss account is prepared to know
the quantum of profit earned or loss suffered. It does not disclose the reasons for
such quantum of profit earned or loss suffered. But, under management
accounting system, it study the cause and effects relationship prevailing between
the variables which affect business activity and profitability through analysis.
6. Importance to Elements of Costs
The total cost is divided into fixed, variable and semi-valuable under management
accounting system. Moreover, it highlights the nature and characteristics of each
such costs with reference to varying productionlevels.
FEATURES OF MANAGEMENT ACCOUNTING

5. 7.Not bounded by the Rules of Financial Accounting
Management accounting never follows the rules of financial accounting. But, it is
concerned with the information which are highly useful to the management
for decision making and control purposes.
8. Recognition of Non-monetary Variables
Non-monetary variables such as efficiency of employees, labour turnover, policy of
management, organization culture, market conditions and consumers
or customer behavior are taken into account before taking a decision by the
management. Under these circumstances, the management consider the monetary
informationfor supportingtheir decisions.
FEATURES OF MANAGEMENT ACCOUNTING

6. 9. It modifies, analyses and interprets data
The financial accounting information are modified, analyzed and interpreted with
new dimensions. In this way, data help the management to take the line of action
towards control of destiny of an undertaking.
10. No Specific Rules and Conventions
Financial Accounting System has rules and conventions to record the business
transactions in the books of accounts. But, there is no such rules and conventions
to the management accounting. Moreover, the tools and techniques applied by the
management are varying fromone periodto another and one concernto another.
FEATURES OF MANAGEMENT ACCOUNTING

7. 11.Achievementof Objectives
Management accounting fixes the standard for various business activities on
the basis of the historical information provided by the financial accounting.
Actual performance is recorded to compare the actual with standard. If there
is any deviations, corrective action can be taken by the management to achieve
the objectives.
FEATURES OF MANAGEMENT ACCOUNTING

8. 12.ImprovingEfficiency
The management can fix the target for each department or division through
budgetary control system. The actual performance is compared with that of targets.
The deviations are findout and classifiedintotwocategories i.e.
Positive deviations and
Negative deviations.
If positive deviations, the concerned department is appreciated. If negative
deviations, causes are find out to give ideas for improving the efficiency of the
relevant department. In this way, the efficiency of employees is improved in the
organizationas a whole.
FEATURES OF MANAGEMENT ACCOUNTING

9. Formorevisit
https://accountlearning.com/features-characteristics-management-accounting/
Thank you