Question

Managerial Accounting

Answer 1

Managerial accounting :-

It is practice of identifying, measuring, analysing, integrating and communicating the financial information to the managers for achieving the goals of business or business objective. it differs from financial accounting because the intention of the managerial accounting is to provide information to the internal users of the organisation to make a well decisions in order to achieve organisation goals.

Managerial Accounting encompasses many facets of accounting aimed at improving the quality of information delivered to managers relating to the cost and sales of the products or services which is generated by the organisation. Cost accounting is an art the subset of managerial accounting that specifically focuses on the company's cost of production by accessing the variable cost at the each step of production as well as fixed cost also. It helps the business to identify the wastage of funds in the production and try to eliminate those wastage and improve profitability of the organisation.

Main points regarding the managerial accounting are as follows :-

1. It focuses on presentation of financial information for internal users to be used by the management for making key business decisions.

2. techniques used by the managerial accountants or not dictated by any standards unlike financial reporting

3. the presentation of information in managerial accounting can be modified as per the requirement of the end users.

4. Managerial accounting process includes many facets like accounting, forecasting, budgeting, product costing and various financial analysis

Types of managerial accounting :-

1. Product costing and valuation

2. Cash flow analysis

3. Inventory turnover analysis

4. Constraint analysis

5. Financial leverage metrics.

these are all the information required to get a basic knowledge regarding the managerial accounting.

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