Question

What is the backbone of managerial accounting. Please explain in 3 paragraphs with 4 sentences in each paragraph.

Answer 1

Managerial Accounting

Accounting is the backbone of every bussiness. Without priper accounting no business can exist. Managerial accounting is a branch of accounting. Managerial Accounting is the practice of identifying, measuring, analysing, interpreting and communicating financial information to managers for the pursuit of an organization's goals. The primary goal of managerial accounting is to provide information for the internal decision making, with an emphasis on planning and controlling purposes. It hepls the managers can understand whether the bussiness is success or failure.

Following are the main importance of managerial accounting,

1. It helps to make or buy decision. It is very important for manufacturing bussiness. Cost and production availability are deciding favtors.

2. It helpe to forecasting the cash flow. Cash flow is an important thing in managerial accounting. In flow and out flow of cash is affecting the finacial structure of the bussiness organization.

3. Helps to understand the performance variances. It helps to understand the variances between what was predictedp and what is actually achieved.

4. The major benefit of managerial accounting is that maximum profits can be obtained. It helps to control unnecessary expenses, it will leads to maximize profits.

Managerial accounting includes both analysis of financial and non finacial measures. It should be noted that management accounting is generally considered as a seperate practice from financial management functions such as controlling a team budget. Managerial accounting is very effective in highly competitive business environment where quick decision need to be made.