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accounting, finance and management with the 3) Tools and techniques used in management _________________________________________
business skills and techniques youll need to add accounting only provide information and not ready _________________________________________
real value to any organisation. Management made decision. Thus, it is only a supplementary _________________________________________
accountants are qualified to work across the service. _________________________________________
business, not just in finance, advising managers on _________________________________________
the financial implications of big decisions, 4) In Management Accounting, decision is based _________________________________________
formulating business strategy and monitoring risk on the managers institution as management try to _________________________________________
much more than just crunching numbers. avoid lengthy courses of scientific decision making. _________________________________________
_________________________________________
The difference between management accounting 5) Personal prejudices and bias affect the decisions _________________________________________
and financial accounting as the interpretation of financial information is _________________________________________
based on personal judgment of the interpreter. _________________________________________
Financial accounting Management accounting What is the scope of Management accounting? _________________________________________
_________________________________________
Following is the scope of Management Accounting: _________________________________________
Prepare reports, Collate information such
_________________________________________
generally based on past as revenue, cashflow and
1) Financial Accounting _________________________________________
performance; in line with outstanding debts to
2) Cost Accounting _________________________________________
reporting requirements produce timely trend
3) Revaluation accounting _________________________________________
reports and statistics to
4) Control Accounting _________________________________________
inform important, day-to-
5) Marginal Costing _________________________________________
day management and
6) Budgetary Control _________________________________________
business decisions
7) Financial Planning and _________________________________________
Produce the required 8) Break Even Analysis _________________________________________
financial information for 9) Decision accounting: _________________________________________
use by other functions 10) Reporting _________________________________________
within the business, for 11) Taxation _________________________________________
example department 12) Audit _________________________________________
managers. _________________________________________
What are the various techniques used to discharge _________________________________________
Define Management Accounting. the function of management accounting? _________________________________________
What are its objectives? _________________________________________
Following are the technique used to discharge the _________________________________________
Management Accounting is the process of analysis, function of management accounting: _________________________________________
interpretation and presentation of accounting _________________________________________
information collected with the help of financial 1) Marginal Costing _________________________________________
accounting and cost accounting, in order to assist 2) Budgetary Control _________________________________________
management in the process of decision making, 3) Standard Costing _________________________________________
creation of policy and day to day operation of an 4) Uniform Costing _________________________________________
organization. Thus, it is clear from the above that _________________________________________
the management accounting is based on financial Compare Financial Accounting and Cost _________________________________________
accounting and cost accounting. Accounting. _________________________________________
_________________________________________
Following are the objectives of Management 1) Financial Accounting protects the interests of the _________________________________________
Accounting: outsiders dealing with the organization e.g _________________________________________
shareholders, creditors etc. Whereas reports of _________________________________________
1) Measuring performance: Management Cost Accounting is used for the internal purpose by _________________________________________
accounting measures two types of performance. the management to enable the same in discharging _________________________________________
First is employee performance and the second is various functions in a proper manner. _________________________________________
efficiency measurement. The actual performance is _________________________________________
measured with the standardized performance and a 2) Maintenance of Financial Accounting records _________________________________________
report of deviation from the standard performance and preparation of financial statements is a legal _________________________________________
is reported to the management for the effective requirement whereas Cost Accounting is not a legal _________________________________________
decision making and also to indicate the requirement. _________________________________________
effectiveness of the methods in use. Both types of _________________________________________
performance management are used to make 3) Financial Accounting is concerned about the _________________________________________
corrective actions in order to improve performance. calculation of profits and state of affairs of the _________________________________________
organization as whole whereas Cost accounting _________________________________________
2) Assess Risk: The aim of management deals in cost ascertainment and calculation of _________________________________________
accounting is to assess risk in order to maximize profitability of the individual products, departments _________________________________________
risk. etc. _________________________________________
_________________________________________
3) Allocation of Resources: is an important 4) Financial Accounting considers only transactions _________________________________________
objective of Management Accounting. of historical financial nature whereas Cost _________________________________________
Accounting considers not only historical data but _________________________________________
4) Presentation of various financial statements to also future events. _________________________________________
the Management. _________________________________________
5) Financial Accounting reports are prepared in the _________________________________________
What are the limitations of Management standard formats in accordance with GAAP _________________________________________
Accounting? whereas Cost accounting information is reported in _________________________________________
whatever form management wants _________________________________________
Limitations of Management Accounting: _________________________________________
_________________________________________
1) Management Accounting is based on financial _________________________________________
and cost accounting, in which historical data is _________________________________________
used to make future decisions. Thus, strength and _________________________________________
weakness of the managerial decisions are based _________________________________________
on the strength and weakness of the accounting _________________________________________
records.