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NATURE AND PURPOSE OF
MANAGEMENT ACCOUNT
Management Accounting is the application of
professional knowledge and skill in the preparation and presentation of
accounting information in such a way as to assist management in the formulation
of policies in planning and control of the undertaking.
Management accounting is concerned with identifying,
presenting and interpreting information used for planning and control of an
enterprise operation.
Management accounting involves data gathering,
analyzing, processing, interpreting and communicating the reporting information
for effective planning decision marking and operations.
Management accounting uses data from the financial
and cost accounting systems and Statistics.
Management accounting also uses statistics and operations research for
analysis.
Management accounting produces information: which
is relevant for the intended purpose.
Management accounting is concerned with helping management to run a
business efficiently.
Purpose of
Management Accounting
The main Purpose of management accounting is the
provision of information used for:
a. Formulating
strategy
b. Planning
and controlling activities
c. Decision
making
d. Optimization
use of resources
e. Disclosure
to shareholders and employees
f.
Safeguarding the assets
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