Despite of the fact that the management accounting is very useful for the business concern, still it has got certain limitations which are discussed below:
It is based on Financial Accounting: Whatever information the management according gets, They are of the financial accuracy of the management decisions is based on the correctness of these information. If financial data is not reliable then management accounting will not provide correct analysis. this effectiveness limited to the reliability of those sources.
Lack of knowledge: For...
Need and Importance of Management accounting
The Present complex
industrial world, management accounting has become an integral part of
management, Management accountant guides and advises management at every step.
Management accounting not only Increase Efficiency of the management but it
also increases the efficiency of the employees. The main Advantage of
management accounting is given below:
Determine of Aim: Management
accounting on the basis of the information available determines its goal and
tries to find out the route through which it can reach the goal.
Helps in...
What is the Role of management Accounting?
The main objective of the management is to manage the business in a systematic way following a plan, allocating responsibilities to implement the plan, organizing methods to execute the plan and also obtain efficiency.
Helps in Organizing: Organisation is related to the establishments of relationship among different individuals in the concern. It also includes the delegation of authority and fixing the responsibility. Management accounting is concerned with establishments of cost centers, preparation of budgets, Preparation of cost control...
what is the Scope of Management Accounting?
The Scope of Management accounting is very wide and broad based. It Includes all information, which is provided to the management for financial analysis and interpretation of the business operation. The following field of activities are includes included in the scopes of this subject:
Financial Accounting: Financial accounting though provides historical information but is very planning and financial forecasting. It is an essential perquisite of any discussion of management accounting. Financial statements contain enough information...
Classification of Information in MIS
The Information can be Classified in a number of ways provide a better understanding. John Deaden of Harvard University classifies Information in the following Manner:
Action Information: The information which induces action is called an action information. For Example:- when the attendance of the student for a particular subject suddenly falls down 40% calls for immediate action.
Non-Action Information: Non-Action Information which is communicates only the status of a situation is a no action information. for Example:- While watching the...
Characteristics and Nature of Management Accounting
It is matter of fact that management accounting is the backbone for every organization. Because it assists the management of organization through providing the relevant and accurate information at the right time for taking rational decisions to short out the business problems. Thus, it is clear that a management accounting should possess these essential characteristics:-
Helpful in Decision Making:- It is an important feature of management accounting. In fact, it helps the management of organization by providing relevant and accurate information...