Premium+

Management Accounting - Research Paper Example

Comments (1) Cite this document
Summary
This paper analyzes the notion of the Management accounting. The purpose of the paper is to distinguish the role that management accounting plays for the stakeholders of an organization in the proses of decision making. Further It also investigates the data sources for the management accounting and its advantages…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
Management Accounting
Read TextPreview

Extract of sample "Management Accounting"

Download file to see previous pages Management accounting is not a specific system of accounts, but could be any form of accounting which enables a business to be conducted more effectively and efficiently. Management accounting in the words of Robert S. Kaplan, is a system that collects, classifies, summaries, analyses and reports information that will assist managers in their decision making and control activities.
Accounting may be defined as “the art of recording, classifying, and summarizing ... transactions and events and interpreting the results thereof”. Two types of accounting are usually taking place in organizations; financial accounting and management accounting. Financial accounting and managerial accounting are entirely different things even though some people perceive both as same thing. Financial accounting is a reporting method to stakeholders outside the organization whereas management accounting is a reporting method intended for the stakeholders inside the organization. In other words, management accounting helps managers inside the organization to take sound decisions. Management accounting is a multifaceted entity and therefore it undergoes various processes like data collection, analysis, interpretations, implementations of decisions etc. Management accounting can be considered as an extension to cost accounting since it uses many of the data used for cost accounting. “From a management accounting point of view the primary purpose of management is to make decisions that may be classified as marketing, production, and financial” (Management Accounting and Decision-Making, n.d, p.24). Unlike cost accounting, management accounting is usually done through unregulated channels since it is intended for the internal use alone. Various sources of data such as accounting system, production and sales department, business process etc can affect management accounting. Sources of data for management accounting and how these data are used to make management decisions Accounts department, Production department, sales department and the business process are the major data sources for management accounting. Accounts department is the most important source of data for management accounting. In fact the top managers taking critical decisions about the future business strategies of an organization based on the feedbacks they receive from the accounts department. Accounts department is the only entity in an organization which knows the current financial strength of an organization. They are the ones who hand the debts and credits of the organization. Moreover, they are the ones which estimate the profits and losses of an organization during a particular period. Accounts department also identifies the underperforming areas of the organization. All these information will help the top managers in taking sound decisions and guiding the organization towards prosperity. Only the production department knows the volume of raw materials, labor and time required for the completion of a particular job and therefore the accounts department should consult with production department before making any estimation about the probable cost an organization may spend for the completion of a particular work. Some jobs may appear simple in its nature; however, the complications involved in the actual production of such jobs are better known only to the production people. On the other hand, some other jobs would be easier for the production department even if it appears to be complicated. Since the accounts departments may not have the technical know-hows about the various mechanisms or methods used in the production of a particular product, costing of a job without consultation with the production department will always generate problems to the organization. The accounts department may quote more or less price for a particular job if they fail to seek the advices of the production de ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Management Accounting Research Paper Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/finance-accounting/1430985-management-accounting
(Management Accounting Research Paper Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/finance-accounting/1430985-management-accounting.
“Management Accounting Research Paper Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/finance-accounting/1430985-management-accounting.
  • Cited: 0 times
Comments (1)
Click to create a comment or rate a document
jo
jo17 added comment 6 months ago
Student rated this paper as
I didn’t know how to start my document. "Management Accounting" helped me out a lot! Especially the list of content was valuable.

CHECK THESE SAMPLES OF Management Accounting

Management Accounting

...?Management accounting is an internal process that enables managers to make business decisions. The process of management accounting combines data from both the internal environment and the external environment in order to generate reports as required by the different department heads. Thus the sources of data are both external and internal. The data are crunched using a variety of analytical tools such as the breakeven analysis in order to arrive at management decisions. Therefore management accounting plays an important role in the organizational decision making process. The role of...
5 Pages(1250 words)Research Paper

Management accounting

...? Management accounting Table of Content 3 Introduction 3 Desirability and Effectiveness of accounting information for organizational control 4 Accuracy, Scope and Faithfulness of accounting information 7 Implication of accounting information for management control 9 Control vs. Accountability 12 Conclusion 13 Reference 15 Abstract This study represents one of the most important areas of management accounting i.e. desirability and effectiveness of accounting for management control. Accounting is the most effective device used by...
12 Pages(3000 words)Essay

Management accounting

...?Running Head: Management Accounting Management Accounting [Institute’s Management Accounting Product cost is the total of costs associated with direct materials, direct labor, and manufacturing overhead used in making a product. However, simple as they may sound, product costs are very important to make crucial decisions related to a product. As important as product cost is, it is quite difficult to calculate it because of the fact that they are not the only costs that the company incurs. Apart from these, a company incurs many indirect costs as well. Human resource, IT-support and other administrative and management...
10 Pages(2500 words)Essay

Management accounting

...?Management Accounting MANAGEMENT ACCOUNTING Administrative Coordination – Chandler Chandler (1977) suggested that Management Information System is one of the results of the scope and scale that business is conducted. Specifically, the multi-divisional forms of business, which are the results of the emergence of large-scale business, led to a need for developing new forms of accounting. Furthermore, the strategic developments that were taking place occasioned new managerial structures, which in turn brought about the need to redesign the accounting system – these changes led to differentiation of management accounting on one hand and financial accounting on the other hand. Methods such as standard costing and budgetary control... are...
6 Pages(1500 words)Essay

Management accounting

...? Management Accounting Affiliation: Management Accounting Management is a vital function in the company it is responsible for a majority of actions in the company, for example; directing, controlling, planning and coordination. Once a management function is administered in an organization it remains permanent since it increases the firm’s efficiency in all ways. In the modern world, management is present in approximately 90% of the firms currently in operation. Management has a life on its own in the firm since it grows with time through key improvements and updates in the firm (Earl, Garrison & Noreen,...
6 Pages(1500 words)Essay

Management accounting

...? Management via Accounting Introduction The modern firm is faced with so many challenges which threaten to bring it to a halt. This has left the modern manager with the very important and daunting role of making sure that the organisation stays on course and that all dangers are put at bay. The modern organisation has therefore been able to come up with very useful management principles that help in making sure that they can survive in a very competitive market without having to worry about failure. One of these management tools is the management-via-accounting strategy which allows the managers and the...
6 Pages(1500 words)Essay

Management Accounting

...? Management via Accounting Management accounting is the process through which information concerning the economic activity in an organization is measured and reported, in order for managers to utilize it in planning, performance evaluation, as well as, the control of operations. It can also be said to be a combination of accounting finance, as well as, management with the aim driving a business that is successful with leading edge techniques. The system of management accounting in most cases feeds into the system of financial accounting. The system of product costing is...
6 Pages(1500 words)Essay

Management Accounting

...Management Accounting An Overview to Cost Accounting Cost accounting is a very essential aspect of every business organization. In the simplest sense, cost accounting can be defined as “process of tracking, recording and analyzing costs associated with the activity of an organization, where cost is defined as required time or resources (Cost Accounting 2006).” In essense, cost accounting is a field in management accounting which is tasked to give numerical values or figures to each activity in a companys supply chain. The method which is used by a firm has a huge impact in the operation of a business organization as the costing system serves as the basis for major organizational decisions. The facts discussed above give rise... to the...
4 Pages(1000 words)Essay

Management accounting

...Accounting Report Introduction: This report aims at presenting the master budget plan for the company – “The Crazy but Awesome Guide to London” (selling books). The business involves printing the pages, preparing the cover and putting them together to get the finished book. ‘XYZ’ will be registered as a ‘Limited Liability Company’ with owners including ABC, XYZ, and GHI. The initial operations of the company will be headquartered at XYZ, London and the books will be distributed throughout London. Target Markets: The company primarily focuses on the target market of tourists, children and student groups on trips to London and also the occasional visitors to London from different parts of the United Kingdom and Europe....
6 Pages(1500 words)Essay

Management Accounting

...Running Head: Management Accounting Management Accounting Submitted by: XXXXXXX Number: XXXXXXXXX XXXXXXXXX XX – XX – 2010 University of XXXXXXXXX Question 1: a) Discuss the accountant’s statement as a basis for the decision on what to produce, based on absorption costing and discuss two other costing techniques that can be used by the business for ascertaining the cost of a product. The accountant has made the decision to avoid the production of two products (Zodiac and Aston) based on absorption costing. The absorption costing method concentrates on both the fixed as well as the variable costs. Hence this method is not very beneficial...
6 Pages(1500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Research Paper on topic Management Accounting for FREE!

Contact Us