Question

We are studying the differences of managerial and financial accounting. Who are the key users of the managerial accounting reports.. Prepared for the internal users? All, Provide examples of internal accounting reports that might be used.

Answer 1

Management accounting is use of cost accounting information for key day to day decision making in the organisation. The users of management accounting are mainly the division and department managers. Management accounting is mainly used for internal purpose and it is used for decision making in business operations.

Examples of internal accounting reports that are used in internal decision making

· Segmented income statement of Products lines, service lines, division, departments or customer wise

· Cost volume profit analysis at different levels of activity levels

· Variable Costing Income statement

· Overhead allocation reports of different departments.

· Flexible budget performance reports which shows activity variance and revenue and spending variance

· Customised reports like make vs. buy, sell or process further, acceptance of special order, continue or discontinue divisions or product lines,

· Variance analysis reports containing sales variance, material variance, labor variance, variable overheads variance and fixed overheads variance analysis