01- mgt accounting

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MANAGEMENT ACCOUNTING

MEANING,NATURE , SCOPE ANDLIMITATIONS

Under Guidance of :Dr. P.V. RajeevPresented By:Mayank AnandM.B.A. 2nd Sem.Roll No. 16


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The Definition given by the American Management Association as follow:

Management Accounting is the application of appropriate technique and

concept in processing historical and projected economic data of an entity toassist management in establishing plan for reasonable economic objective in

making of rational decisions with a view towards achieving these objective.

The Definition given by Management Accounting Team of Anglo American

Council of Productivity as follow : Management Accounting is the presentation of accounting information in

such a way as to assist management in the creation of policy and in day to

day operations of an undertaking.


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IDENTIFICATION ANDMEASUREME

NT

ACCUMULATIONANALYSIS

PREPARATIONAND

INTERPRETATION

COMMUNICATION


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Rovide da

Provide Data for management planning

Modifies Data Analyses and Interprets Data

Serves As a means of communicating

Facilitates Control

Uses also Qualitative Information

Facilitates Decision-making

F

UNCTIO

NSOF

MANAGEMENT

ACCOUNTING


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SCOPE OF MANAGEMENT ACCOUNTING

FINANCIAL ACOUNTING

COST ACCOUNTING

REVALUATION ACCOUNTING

BUDGETARY CONTROL

INVENTORY CONTROL


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SCOPE OF MANAGEMENT ACCOUNTING

STASTICAL METHODS

INTERIM REPORTING

TAXATIONS

OFFICE SERVICES

INTERNAL AUDIT


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LIMITATIONS OF MANAGEMENTACCOUNTING

LIMITATIONS OF BASIC RECORDS

PERSISTENT EFFORTS MANAGEMENT ACOUNTING IS ONLY ATOOL

WIDE SCOPE

TOP HEAVY STRUCTURE

OPP

OSITIO

NTO

CH

ANGE


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1.OBJECT. - The object of financial accounting is

to record various transactions with the purpose

maintaining accounts and to know the financialposition and to find out profit loss at the end of

the financial Year these records are useful to

shareholders, creditors, bankers, debenture

holders, etc.

Management accounting is essential to help

management in formulating policies and plans.

MANAGEMENT ACCOUNTING VS.FINANCIAL ACCOUNTING


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Contd..2.NATURE. - Financial accounting is mainly

concerned with the historical data. it recordsonly those transactions which have alreadytaken place.

Management accounting deals with projection ofdata for the future.

3. SUBJECT-MATTER. - Financial accounting is

concerned with assessing the results of thewhole business.

While management accounting deals separatelywith different unit, department and cost centers.


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Contd..4 .COMPULSION.-The preparation of financial accounts iscompulsory in certain undertakings while these are a

necessity in other.

Management accounting is not compulsory. It is only aservice function and is helpful to the management inadministration of the business.

5. PRESISION. - In management accounting no emphasisis given to actual figures. The approximate figures areconsidered more useful then the exact figures.

In financial accounting only actual figures are recordedand there is no room for using approximate figures. Thetransactions are recorded only when they have takenplace so exact figures are used.


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Contd..6. REPORTING. - Financial accounting are prepared to

find out profitability and financial position of the concern.

Management accounting reports are meant for internaluse only. These are prepared for the benefit of differentlevels of management.

7. DESCRIPTION. - Only those things are recorded infinancial accounting which can be measured in monetaryterms. Anything which cannot be recorded in figures isoutside the scope of financial accounting.

Management accounting uses both monetary and non-monetary events.


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Contd..6. REPORTING. - Financial accounting are prepared to

find out profitability and financial position of the concern.

Management accounting reports are meant for internaluse only. These are prepared for the benefit of different

levels of management.

7. DESCRIPTION. - Only those things are recorded infinancial accounting which can be measured in monetaryterms. Anything which cannot be recorded in figures is

outside the scope of financial accounting.

Management accounting uses both monetary and non-monetary events.


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Contd..

8. QUICKNESS.- Reporting of management

accounting is very quick.

Financial accounting is slow and time consuming

9. ACCOUNTING PRINCIPLES. - financial

accounting are governed by the generally accepted

principles and conventions.

No set principles are followed in management

accounting


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Contd.. 10. PERIOD. - Financial accounting are prepared

for a particular period. Profit and loss account isgenerally prepared for one year.

Management accounting supplies information fromtime to during the whole year.

11. PUBLICATION. - Financial accounting like profitand loss account and balance sheet are publishedfor the benefit of public.

Management accounting statements are preparedfor benefit of the management only and these arenot published.


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Contd.. 12. AUDIT. - Financial accounts can be got

audited. Under company law, auditing of

financial accounts is compulsory.

Management accounting cannot be audited.


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01- mgt accounting

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