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Management to plan the activity, evaluate performance, ensure integrity of the financial information to the Organization can be considered as MANAGEMENT ACCOUNTING.
COST ACCOUNTANT
conducted more efficiently , can be regarded as Management Accounting. -BY-I Institute of chartered Accountants,England
Management Accounting is concerned with Accounting
necessary for effective planning, for choosing among alternative business actions and for control through the evaluation and interpretation of performances. BY American Accounting Association.
Help in Planning
Help in Organising.
Help in Controlling.
Help in Communicating
Help in Controlling.
Management Accounting depends upon the need of Managers. Financial Accounting performs the basic functions such as Recording, Classifying, Summarising and interpretation whereas Management Accounting deals with the Decision Making, Controlling and informing the Management about necessary Planning. The users of Financial Management are external whereas the users of Management Accounting are mainly internal. Financial Records are publicly available but Management Records are confidential. The main emphasis of Financial Accounting is on Explanation and the Management Accounting emphasises on Planning and Control. Nature of Data used by Financial Accountants are purely Technical whereas the Management Accounting Data is according the need of non- accountants.
basic function of a language is to serve as a means of communication. Accountancy also serves this function, it communicates the results of Business Operations to various Parties who have some stake in the business viz. the proprietor, Creditors, Investors, Government and other agencies.
The function of the FINANCIAL ACCOUNTING is to provide
quantitative information primarily of financial nature about economic activities that is to be useful in making economic decisions.
Financial Accounting is the Base of Whole Accounting System which
transactions and events, primarily of a financial character and the art of making significant summaries, analysis and interpretation of these transactions and events and communicating the results to persons who must take decisions or form judgements. BY- Smith and Ashburn
Accounting is the recording, classifying and summarising in a
significant manner and in terms of money, transactions and events which are, in part, at least of a financial character and interpreting the results thereof. BY American Institute of Certified Public Accountants.
To keep the Systematic Record of Business Transaction. Calculation of Profit and Loss of the Business. To depict the financial position of the Business. To provide information to various Parties:- Proprietors Management. Helpful to Planning. Helpful to Decision Making. A tool for control. -- Investors. -- Employees. -- Government. -- Banks.
accounts the materials used and labour employed in the manufacture of a certain commodity or on a particular job. By-R.N. Carter.
By Cost Accounting is meant a specialist application of the
general principles of accounting in order to ascertain the cost of producing and marketing any unit of manufacture of of carrying out any particular job or contract. BYL. B. Cropper. Cost Accounts are a system of Accounting whereby expenditure is analysed to find the total cost of each particular unit of production with a reasonable degree of accuracy and to show how such cost is made up. BYR.R. Gupta.
the cost per unit of products and services. But Management Accounting emphasis upon the representation of Cost Data or information for helping management in the efficient operation and performance of managerial functions.
Cost Accounting is at maximum, based on past and present facts and
figures, while Management Accounting deals with future projections and plans.
Both the external and internal parties are interested in the data and
facts provided by Cost Accounting, but the information provided by Management Accounting is useful only to the MANAGEMENT.
Certain principles, procedures and proformas are followed in the system of
Cost Accounting. But no such principles and procedures are being used in Management Accounting, they can necessary changes according to nature which varies concern to concern.
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