Question

What are some of the common management decisions that can be aided by the use of accounting information and procedures? Explain.

Answer 1

Some of the common management decisions that can be aided by the use of accounting information and procedures are:

1. Cost optimization: By the use of accounting information and procedures, cost optimization can be suitably done and expenses of an organization can be reduced by identifying the high cost items and making plan to reduce such high costs.

2. Revenue maximization: Revenue maximization can also be achieved through the use of accounting information and procedures. This is because such information provides the maximum revenue items throufh ABC analysis and the company can shift it's focus on such items and make plan to maximise it's revenue through sale of such items.

3. Financial planning and investment: Through proper accounting information and procedures, company can invest in suitable avenues and can also do proper financial planning for long term by looking at the past records and proper analysis of accounting information.