Management accounting provides techniques for financial planning, analysis of financial statements, and decision making to help management. Some key techniques include historical cost accounting, budgetary control, standard costing, marginal costing, and revaluation accounting. Management accounting also helps with control accounting and producing management information systems to provide regular reports to various levels of management.

1. Tools &Techniques ofTools &Techniques of
Management AccountingManagement Accounting

2. Financial Policy and AccountingFinancial Policy and Accounting
• Firmshasto takedecisionsabout sourcesof
raising funds.
• Issueof sharecapital or raising of loans.
• Proportion between sharecapital and loansareto
bedecided.
• Management accounting providestechniquesfor
financial planning.

3. Analysisof Financial StatementsAnalysisof Financial Statements
• Meansto classify and present thefinancial data
useful for themanagement.
• Financial analysisincludescomparativefinancial
statements, ratios, fund flow statements, trend
analysisetc.

4. Historical Cost AccountingHistorical Cost Accounting
• Thepriceof an asset on thebalancesheet isbased
on itsnominal or actual cost when acquired by the
company isknown ashistorical cost accounting.
• Actual cost iscompared with standard cost to get
an ideaabout performanceof theconcern.

5. Budgetary ControlBudgetary Control
• It isasystem which usesbudgetsasatool for
planning and control.
• Budgetsfor all departmentsareprepared in
advance.
• Actual performanceiscompared with thepre-
determined targets.
• Helpsto assestheperformanceof each and every
personsin theorganisation.

6. Standard CostingStandard Costing
• Herecostsaredetermined in advance.
• Actual cost arerecorded and compared with the
standard costs.
• Variancesareanalysed and their reasonsare
ascertianed.
• It helpsto enhancetheefficiency of theconcern.

7. Marginal CostingMarginal Costing
• Method of costing concerned with changesin
costsresulting from changesin thevolumeof
production.
• It ishelpful for measurement of profitability of
different linesof production, different
departmentsand divisionsof an enterprise.

8. Decision AccountingDecision Accounting
• Decision making isan important work of
management.
• It involvesachoicefrom variousalternatives
• Management Accounting calculatesfinancial
implicationsof each alternativecourseof action
and helpsmanagement to select best courseof
action

9. Revaluation AccountingRevaluation Accounting
 Also known asReplacement Accounting
Batty definesRevaluation accounting as,
“ It is used to deno te the metho ds emplo yed fo r
o verco ming the pro blems co nnected with fixed
asset replacement in a perio d o f rising prices”

10. Control AccountingControl Accounting
• It isnot aseparateaccounting system.
• It isthemethodsand proceduresthat are
implemented by afirm to help ensurethevalidity
and accuracy of itsown financial statements.
• In controlling accounting wecan useinternal
check, internal audit, statutory audit.

11. Management Information SystemManagement Information System
• It isacomputerized databaseof financial
information organized and programmed in such a
way that it producesregular reportson operations
for every level of management in acompany.
• Dataplanning issupplied to management
• Feedbacksarerecieved