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    Management Accounting 1: (Prepared by MS. ARMI K. BUYCO, CPA, MBA)

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    Gilner Pomar
    Management accounting provides information to internal managers to help them make economic decisions and evaluate business operations. It focuses on detailed, forward-looking reports for management rather than general financial statements for external stakeholders. Management accounting helps managers plan by setting goals and objectives, organize resources to implement plans, and control operations by tracking performance and addressing deviations from targets. The key functions of management are planning, organizing, and controlling, with decision-making integrated into each function.

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    Management Accounting 1: (Prepared by MS. ARMI K. BUYCO, CPA, MBA)

    Uploaded by

    Gilner Pomar
    41 views3 pages
    Management accounting provides information to internal managers to help them make economic decisions and evaluate business operations. It focuses on detailed, forward-looking reports for management rather than general financial statements for external stakeholders. Management accounting helps managers plan by setting goals and objectives, organize resources to implement plans, and control operations by tracking performance and addressing deviations from targets. The key functions of management are planning, organizing, and controlling, with decision-making integrated into each function.

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    Management accounting provides information to internal managers to help them make economic decisions and evaluate business operations. It focuses on detailed, forward-looking reports for management rather than general financial statements for external stakeholders. Management accounting helps managers plan by setting goals and objectives, organize resources to implement plans, and control operations by tracking performance and addressing deviations from targets. The key functions of management are planning, organizing, and controlling, with decision-making integrated into each function.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    41 views3 pages

    Management Accounting 1: (Prepared by MS. ARMI K. BUYCO, CPA, MBA)

    Uploaded by

    Gilner Pomar
    Management accounting provides information to internal managers to help them make economic decisions and evaluate business operations. It focuses on detailed, forward-looking reports for management rather than general financial statements for external stakeholders. Management accounting helps managers plan by setting goals and objectives, organize resources to implement plans, and control operations by tracking performance and addressing deviations from targets. The key functions of management are planning, organizing, and controlling, with decision-making integrated into each function.

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    © All Rights Reserved
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    MANAGEMENT ACCOUNTING 1

    (Prepared by MS. ARMI K. BUYCO, CPA, MBA)

    INTRODUCTION

    DEFINITION AND NATURE OF MANAGEMENT ACCOUNTING

    The business of accounting is information. And the business of management


    accounting is to provide information for management.
    Information is a processed data useful in making decisions. Data should be
    captured, processed and reported as information to be useful in making decisions.
    Managers need relevant and timely information to make reasonable economic
    decisions. Aside from traditional information supplied by the financial accountant,
    managers ask for more detailed, exhaustive, and confidential information for a more
    intelligent appraisal about business operations.
    The systems and processes used to gather data, process data, and provide
    useful quantitative information to management is management accounting, also called
    managerial accounting. It is a field of accounting that provides economic and financial
    information for managers and other internal users. Management accounting supplies
    the information needs of management. This information should be more detailed,
    forward-looking, and presented and analyzed differently to suit the unique informational
    needs of management.
    The head of a management accounting group in an organization is called
    management accountant. Sometimes, he is called VP for Finance, CFO, Accounting
    Manager, Budget Director, CIO, or Systems Administrator. Traditionally, a management
    accountant is called controller or comptroller.
    Management accounting applies to all types of business—service, merchandising,
    and manufacturing. It also applies to all forms of business organizations—
    proprietorships, partnerships, and corporations. Management accounting is needed in
    not-for-profit entities as well as in profit-oriented enterprises.

    COMPARISONS BETWEEN FINANCIAL ACCOUNTING & MANAGEMENT


    ACCOUNTING

    Financial Accounting Management Accounting


    ● Historical in nature ● Deals about the future
    ● Reports are primarily for external ● Reports are primarily for internal users:
    users: shareholders, creditors, and officers and managers
    regulators
    ● Reports are holistic; pertain to ● Reports are segmentized; pertain to
    business as a whole subunits of the business
    ● Reports are for general-purpose; ● Reports are for special-purpose and for
    highly aggregated (condensed) management use only; very detailed
    ● Focuses on the process of preparing ● Concerns with the usefulness of financial
    the financial statements; objectivity, statements; subjectivity, relevance and
    precision and verifiability are adhered timeliness are adhered
    ● Financial statements are prepared ● Internal reports are prepared as
    annually frequently as needed
    ● Limited to double-entry accounting ● Extends beyond double-entry accounting
    and cost data to any relevant data
    ● Prepared in accordance with generally ● Standard is relevant to decision
    accepted accounting principles (GAAPs)
    ● Reports follow a standard format ● Reports may be prepared in any format
    ● Audited by independent CPA ● No independent audit is needed

    FUNCTIONS OF MANAGEMENT
    Management’s activities and responsibilities can be classified into three broad
    functions. They are:

     Planning - requires management to look ahead and establish objectives. These


    objectives are often diverse: maximizing short-term profits and market share,
    maintaining a commitment to environmental protection, and contributing to social
    programs. A key objective of management is to add value to the business under its
    control. Goals and objectives are sometimes interchanged. “Goals” must be
    established to define directions and activities that need to be accomplished.
    However, goals are normally expressed in general, abstract statements. The
    statement of goals should be translated into a more specific statement of matters to
    be accomplished known as “objectives”. Objectives are more specific expressions
    of actions and things to be done. When objectives are set, specific “plans” are
    made. Plans must be SMART (specific, measurable, attainable, realistic, and time-
    bounded). There are plans in a department, division, unit or in whatever way the
    organization is segmentized. These segmented plans are consolidated to become
    organizational plans. All of these plans become basic guidelines for actions. Plans
    must be expressed in monetary terms, to be objective and understandable. Plans
    that are expressed in terms of money are called “budgets”.
     Organizing - involves coordinating a company’s diverse activities and human
    resources to produce a smooth-running operation. This function relates to
    implementing planned objectives, directing activities and motivating by providing
    necessary incentives.
     Controlling - is the process of keeping the company’s activities on track. In
    controlling operations, managers determine whether planned goals are being met.
    When there are deviations from targeted objectives, they must decide what changes
    are needed to get back on track.
    In performing these functions, managers make decisions that have a significant
    impact on the organization. Decision-making is an inherent management function
    incorporated in each broad functions of planning, organizing and controlling.

    PREPARED BY:

    Ms. ARMI KATALBAS-BUYCO, CPA, MBA


    Subject Professor

    *****END*****

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