Management Accounting Final
Management Accounting Final
Management Accounting Final
1. Both as a Science and an art: In management accounting data are collected systematically and
they are analysed with the help of various formulae and techniques and on this basis it is a science.
On the other hand, subjective judgment of management and various needs of the organization are
also taken into account while taking decisions and on this basis it is an art. On the whole,
management accounting is both- a science as well as an art.
2. Accounting Service: Management accounting is a function of accounting service towards
management. Under this service necessary information are provided to various levels of
management.
3. Integrated System: Management accounting is an integrated system in which technique related to
various subjects are used in the process of data collection, analysis and decision-making.
4. More concerned with Future: Management accounting is more concerned with „future‟. No
doubt, analysis and interpretation are made on the basis of historical data, but the important
objective of management accounting is to determine policies for future.
5. Selective Nature: Management accounting is selective in nature. It selects only those plans or
alternative which seems to be more attractive and profitable.
6. More Emphasis on the Nature of Element of Cost: Management accounting lays more emphasis
on the recognition and study of the nature of various elements of costs. In this context the total cost
is divided into fixed, variable and semi-variable components.
7. Cause and Effect Analysis: Management accounting lays emphasis on the analysis of „cause‟ and
effect „effect‟ of different variables.
8. Rules not Precise and Universal: In management accounting no set of rules or standards are
followed universally. Though the tools of management accounting are the same, their use differs
from concern to concern.
9. Supplies Information and not decision: An important nature of management accounting is that its
provides requisite information and not decisions. However, decisions are taken by management
with the help of these informations.
10. Achieving of Objectives: In management accounting, the accounting information is used in such a
way so that organizational objectives and targets may be achieved and efficiency of business may
be improved.