This emphasises that the books of account are to be The subject 'Cost and Management Accounting' is very important and useful for optimum. on decision making. This book focuses on the essential managerial accounting concepts For example, when establishing an inventory cost for one or more. Understand the cost and management accounting techniques for evaluation, analysis popularly said by S. C. Kuchal in his book “Financial Management - An.
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books called Journal and other subsidiary books and it is useful for . Cost accounting helps management in formulating business policy and decision making. PDF | Cost and Management accounting is a combined volume of cost exposed in this textbook focuses essentially on managerial decision. Managerial Accounting. Methods and Functions Comparison of management accounting and financial accounting 6 Financial accounting vs cost accounting. book Accounting and Management: A Field Study Per- spective. .  “Definition of Management Accounting” (PDF). Institute.
Qualitative data is numerical information only. Information can only be extracted from external sources.
Operational information gives details of long-term plans only. Data can be either discrete or continuous. Which of the above statements are correct? Stratified sampling B. Random sampling C. Systematic sampling D. Cluster sampling LectureNotesPublished 13 www. LectureNotesPublished 15 www.
Operational planning This is the planning at the operational level of management that deals with breaking down the tactical plans into an achievable plan within the next 12 months. LectureNotesPublished 18 www. Which of the above are correct? Reviewing cost variances and investigate as appropriate B. Comparing actual market share to budget C.
Monitoring actual sales to budget 1. Establishing the standard to be achieved B. Measuring the actual performance C.
Setting organisational objectives D. Taking appropriate corrective action 1.
The products or services offered by the organisation C. Quantified short term targets the organisation seeks to achieve D. Relevant information is gathered on areas of responsibility over a period of time, in order to appraise the performance of the manager.
The concept of responsibility accounting is used in performance management and appraisal, where managers are assessed on areas they are responsible for, in order to maintain and improve performance and control of various elements of the business operations. Responsibility accounting divides accounting responsibility into centres known as responsibility centres, for control purposes.
Responsibility centre is a location, department or functional unit of the organisation, under direct control of a specific manager. It is a centre where a manager is responsible for cost only e. Profit centre is a location i. Revenue Centre: this is a location where the manager is responsible and accountable for revenue generation only e.
LectureNotesPublished 22 www. Managers have control over marketing. Management have a sales team. Management have a sales team and are given a credit control function. Managers can purchase capital assets and are given a credit control function. LectureNotesPublished 23 www. He receives monthly information that compares planned and actual expenditure for department M.
After department M, all production goes into other factory departments to be completed prior to being despatched to customers. Decisions involving capital expenditure in department M are not taken by Reginald. A cost centre manager B. An investment centre manager C. A profit centre manager D. A revenue centre manager 1. Cause and Effect Analysis One step further from financial accounting, management accounting works to know the reasons of profit or loss of an organization.
It works to find out the causes for loss and also study the factors which influence the profitability.
Therefore, cause and effect is a feature of management accounting. Special Technique and Concepts Budgetary control, marginal costing, standard costing are main techniques used in financial accounting for successful financial planning and analysis, and to make financial data more useful. Decision Making Studying various alternative decisions, studying impact of financial data on future, supplying useful data to management, helping management to take decisions is a part of management accounting.
Achieving Tasks Financial data is used to set targets of the company and to achieve them. Corrective measures are used if there is any deviation in actual and targeted task. This all is done through management accounting with the help of budgetary control and standard costing. No Fixed Norms No doubt, tools of management accounting are same, but at the same time; uses of these tools depend upon need, size, and structure of any organization.
Thus, no fix norms are used in application of management accounting. On the other hand, financial accounting totally depends on certain rules and principals.
Therefore, presentation and analysis of accounting data may vary from one organization to another. Increasing Efficiency While evaluating the performance of each department of an organization, management accounting can spot the efficient and inefficient sections of an organization.
With the help of that, corrective step can be taken to rectify the inefficient part for better performance. Hence, we can say that efficiency of a concern can increase using accounting information. Informative Instead of Decision Making Decisions are taken only by top management using information provided by management accountant as classified in a manner which is useful in decision making.
Decision making does not come under preview of accountant, it is only the top management, who can take decision. Thus, decision of an organization depends on caliber and efficiency of the management.
Forecasting Management accountant helps management in future planning and forecasting using historical accounting data.
Objectives of Management Accounting Let us go through the objectives of management accounting: Planning and Formulating Policies In the process of planning and formulating policies, a management accountant provides necessary and relevant information to achieve the targets of the company. Management accounting uses regression analysis and time series analysis as forecasting techniques.
Controlling Performance In order to assure effective control, various techniques are used by a management accountant such as budgetary control, standard costing, management audit, etc.