Introduction of Management Accounting

1. MANAGEMENT ACCOUNTING
Conducted by
Mr. S. B. Bansode

2. MEANING & DEFINITIONS OF
MANAGEMENT ACCOUNTING
• Management accounting is the presentation of accounting
information in such a way as to assist management in the creation
of policy and in the day to day operations of an undertaking.
• The adaption and analysis of accounting information and its
diagnosis and explanation in a way to assist management.
- T.G. Rose
• Management Accountancy is the term used to describe the
accounting methods, system and techniques which, coupled with
special knowledge and ability assist management in its task of
maximizing profit or minimizing losses.
- Batty

3. OBJECTIVES OF MANAGEMENT
ACCOUNTING
• Promotion of business efficiency through standard costing and budgetary
control.
• To assist in planning and formulation business policies through past
accounts and budgetary control. The reports are submitted on the future
trends on the basis of present state of affairs and likely change in future.
• To prepare budget to control the activities of the business.
• Measurement of execution of planning.
• To render best possible services to the customers of business.
• To ensure higher possible return to investor through higher efficiency and
security of their capital.
• To ensure best possible working conditions and return for labour force.

4. ESSENTIALS OF MANAGEMENT
ACCOUNTING
Following are the essential factor for purpose of having
efficient management accounting
1. A detailed study of the need of each bussiness.
2. Selection of right accounting and statistical techniques for the
purpose of measuring and forecasting business activity.
3. The recognize the human factor in management.
4. The use for forcasting and budegeting for forward planning
5. A controlled duties of individual
6. It is a most common for good aystem of management accounting
to utilize, besides pure financial accounting, budgetary control,
standard costing and marginal costing
7. A proper system of recording the relationship between actual
performance of business as compared with present standards
8. Prompt provision of information to management for planning
future action.
9. Proper formulation and tabulation of results achieved and
diagnosis of weakness, in any, of the business.

5. SCOPE OF MANAGEMENT
ACCOUNTING
• Financial Accounting or General Accounting
• Cost Accounting
• Budgeting and Forecasting
• Cost Control Procedure
• Statistical Method
• Taxation
• Methods & Procedure
• Internal Control
• Office Services
• Interpretation

6. FUNCTIONS OF MANAGEMENT
ACCOUNTING
• Forecasting & Planning
• Controlling
• Co-ordination
• Organizing
• Communication
• Motivating
• Analysis & Interpretation of data
• Special Cost and Economic Studies
• Use of Qualitative information
• Miscellaneous Functions

7. ROLE OF MANAGEMENT
ACCOUNTING IN DECISION MAKING
• Relevant Costs Analysis
• Audience Targeting
• Make or Buy Evaluations
• Define Budgets
• Controlling
• Planning

8. Tools and Techniques
• Historical Cost Accounting
• Standard Costing
• Budgetary Control
• Marginal Costing
• Decision Making
• Control Accounting
• Revaluation Accounting
• Financial policy & Accounting
• Analysis of Financial Statement
• Funds flow Statement
• Return on Investment
• Statistical Graph Techniques
• Communicating or reporting

9. Management Accounting VS
Financial Accounting
Points Management Accounting Financial accounting
Object To provide information to
management for formulating policies
and plans.
To record various transactions to
find out profit or loss at the end of
the financial year to know the
financial position.
Accounting
principles
No set principles are followed. It is governed by generally
accepted principles & conventions
Nature Deals with projection of data for the
future
Deals with historical data
Legal compulsion It is Optional/not compulsory It is Compulsory
Precision Approximate figure are used Only actual figure are recoded with
perfect accuracy and precision.
Reporting These reports meant for internal use
only
Not only for benefit of the concern
but also for outsiders.
Audit Management account can not be
audited.
Financial accounts can be audited.

10. Thank You …