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Unit 1 Discussion

Management accounting helps managers make short-term and long-term business decisions by preparing reports on company activities and transmitting data to management. It assists organizations in achieving their objectives by detecting, assessing, evaluating, and interpreting operational data. Specific managerial activities aided by management accounting include preparing budgets, conducting variance analysis, controlling inventory, checking internal controls, and creating various financial reports. In conclusion, management accounting is useful for business owners to efficiently conduct daily operations and make informed decisions.

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Simran Pannu
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109 views

Unit 1 Discussion

Management accounting helps managers make short-term and long-term business decisions by preparing reports on company activities and transmitting data to management. It assists organizations in achieving their objectives by detecting, assessing, evaluating, and interpreting operational data. Specific managerial activities aided by management accounting include preparing budgets, conducting variance analysis, controlling inventory, checking internal controls, and creating various financial reports. In conclusion, management accounting is useful for business owners to efficiently conduct daily operations and make informed decisions.

Uploaded by

Simran Pannu
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Discussion 1: Management Accounting

BUS 5110 Managerial Accounting

Amanjit Pannu

Ms. Melissa Bartlett

University of People
The method of preparing reports on company activities that help managers make short-

term and long-term decisions is management accounting. By detecting, assessing, evaluating,

interpreting, and transmitting data to management, it helps an organization achieve its objectives

(Freshbooks, 2020). Management tasks may be conducted seamlessly with the assistance of

management accounting to schedule, coordinate, staff, direct and control these operations. It

offers necessary details for planning the company's daily activities (Freshbooks, 2020).

According to statement said by R.N. Anthony, “Management Accounting is concerned

with accounting information that is useful to the management” (iEduNote.com, 2020).

Role of management accounting (Graybeal, Fraklin, & Cooper, 2018):

1. Management accounting helps to prepare business plans, so accurate decisions can be

made with the help of these plans. Based on past success, the plans are established.

2. These reports contain details on business activities and, at all levels, help to define

problem areas, monitor progress, make decisions and other functions. From management

information systems, these reports are created.

3. The duties to be performed by the various departments are set in advanced, so this helps

to clearly identify the duties when staff understand how to execute the job and what they

have to do, contributing to the achievement of the organization 's objectives.

The basic principles of management can be utilized as follows (Graybeal et. al, 2018):

1. Communication conducted between employees in a business is highly essential to the

success of the business. Through communication, potential problems can be resolved

which leads to better and accurate decisions. A basic principle communication defines
that proper communication channels are used to transmit information and ideas easily

without any difficulty. Management accounting relies heavily on communication.

2. Data to be transmitted must be relevant and valuable to the person who needs it.

Management accounting does exactly that. It makes sure that right information is

available to the right person at the right time.

3. Management accounting helps divide up the work between different departments. The

benefit of dividing up work between department is that the same person is doing the same

task each time. This allows speed and efficiency in performing the task as it becomes

easier each time. With the division of work, proper authority and responsibility are

assigned. The person who is assigned the task is accountable and knows his/her

responsibility.

4. Proper and social order is maintained. When this is maintained, everything is in the right

place and right time. This applies to the workers as well. Right person working in the

right place which ensures the job is done accurately.

Specific managerial activities that are useful are (Accounting for Managers, n.d.):

 preparing budgets for the upcoming periods

 variance analysis

 inventory control

 checking internal controls

 making various financial reports for example, cash flow statement, common size

statement etc.
To conclude, management accounting is useful for business owners to conduct daily business

activities and make informed and accurate decisions for the business.

References

Accounting for Managers. Accounting for Managers - Table of Contents. (n.d.).

https://2012books.lardbucket.org/books/accounting-for-managers/index.html.

FreshBooks. (2020, July 20). What Is Management Accounting?

https://www.freshbooks.com/hub/accounting/management-accounting.

Graybeal, P., Franklin, M., & Cooper, D. (2018, July 24). Principles of Accounting, Volume 2:

Managerial Accounting. Principles of Accounting Volume 2 Managerial Accounting.

https://opentextbc.ca/principlesofaccountingv2openstax/.

Management Accounting: Definition, Functions, Objectives, Roles. iEduNote.com. (2020, July

23). https://www.iedunote.com/management-accounting.

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