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Management Accounting

Management accounting is a specialized branch of accounting that provides relevant financial and non-financial information to assist internal management in planning, decision-making, and controlling business operations. It differs from financial accounting by focusing on internal processes rather than external reporting. Key tools include various financial statement analyses, such as ratio analysis and cash flow statements, aimed at improving efficiency and profitability.

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Manvi Singh
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6 views10 pages

Management Accounting

Management accounting is a specialized branch of accounting that provides relevant financial and non-financial information to assist internal management in planning, decision-making, and controlling business operations. It differs from financial accounting by focusing on internal processes rather than external reporting. Key tools include various financial statement analyses, such as ratio analysis and cash flow statements, aimed at improving efficiency and profitability.

Uploaded by

Manvi Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Management

accounting
Unit: 1
Contents
Introduction & Meaning of Managerment Accounting.

Definition

Objectives

Functions

Advantages and Limitations

Distinction between financial accounting &

Management Accounting.

Meaning of financial Statements.

Tools of Financial statement Analysis.

i) Comparative Financial Statement

ii)Common Financial Statement

iii) Trend analysis.

iv) Ratio Analysis

v) Fund Flow Statement

vi) Cash Flow statement

2
Introduction and Meaning of
Management Accounting

Management accounting is a branch of


accounting that focuses on providing
relevant financial and non-financial
information to the management of an
organization. It helps in planning, decision-
making, and controlling the operations of
the business.

In simple terms, management accounting is


a tool that collects, analyzes, and interprets
data to assist managers in making effective
decisions for achieving the organization’s
goals. Unlike financial accounting, which is
meant for external stakeholders,
management accounting is primarily used
for internal decision-making.

This practice ensures that resources are


utilized efficiently, costs are controlled, and
profits are maximized while helping the
organization adapt to changing business
environments.

Definition of Management Accounting

Management accounting is the process of


preparing, analyzing, and providing financial and
non-financial information to the management of a
business. It helps managers plan, control, and make
decisions to achieve organizational goals.
In simple words, management accounting focuses on
providing useful data to managers to improve
efficiency, reduce costs, and increase profitability.
Unlike financial accounting, it is used only for internal
purposes and is not shared with external parties.

OR

According to the Institute of Management


Accountants (IMA):
"Management accounting is a profession that
involves partnering in management decision-making,
devising planning and performance management
systems, and providing expertise in financial
reporting and control to assist management in the
formulation and implementation of an organization’s
strategy."

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