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Management accounting is a decision making science.Comment

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Re: Management accounting is a decision making science.Comment

Post by preeti tamrayat on Thu Dec 29, 2016 9:10 pm

Management accounting is meant for the management to take informed decisions about the business. Reports of management accounting are a secret of the company and hence they are not disclosed to anyone except the core management team who are responsible for taking decision.
It is true that management accounting is a decision making science.
Business owners are faced with many hard decisions every day. Managerial accounting provides data-driven input to these decisions, which can ease the process of decision-making over the long term. So managers can rely on this to help make their business decisions profitable and successful.
The main objectives of managerial accounting is:

1.)Assess Risk
2.)Allocation of resources.
3.)Measuring Performance: Management accounting measures two types of performance. First is employee performance and the second is efficiency measurement.
With the help of management accounting managers can estimate and manage the cost and profitability of their products and customers. Management Accounting reports generally show the orders in hand, sales revenue, available cash, accounts receivable, raw material and inventory, accounts payable and outstanding debts. These reports further include variance analysis, and other statistics which will help managers in the decision making process. Management accounting helps in taking day to day decisions making process.


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Re: Management accounting is a decision making science.Comment

Post by mahak agarwal on Thu Dec 29, 2016 9:13 pm

Yes, I agree with the statement.
Management accounting is to manage the cost control and accounts of the business. Managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which aids their management and performance of control functions. Managerial accounting is linked to cost accounting & cost management.
Managerial Accounting is the branch of accounting that supports company management in planning, decision making, control and analysis. Effective use of this tool by operational management will ensure profitable growth and business optimization.

Every day to day activities and its costing are recorded under accounting but only records are not sufficient for an organization to function. Management accounting is the science which deals with making and analyzing the decisions based on the accounting records. This decision making involves deciding the best alternative among the given options. Successful operation of a business is a direct result of an efficient management decision making. Some of the popular tools used in management accounting are budgeting, cost analysis, profit analysis and Bep etc

According to me Management Accounting is an art not a science as there are no authoritative standards, and no generally accepted management accounting principles that govern management accounting. Tax accounting must follow tax laws and regulations, and use prescribed tax forms. External financial statements have to be prepared in accordance with GAAP. Management accounting is a wide-open game with few ground rules.

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Re: Management accounting is a decision making science.Comment

Post by bhavanasingh on Thu Dec 29, 2016 9:51 pm

Management Accounting also known as cost accounting as it helps in identifying, measuring, analyzing, interpreting, and communication of information for the purpose of achieving an organizational goals. It helps the organization improve their ability to control costs and plan for future trough financial forecasts by providing report to ensure comprehensive management oversight. Management accounting process includes: Financial Statement Analysis, Cash Flow information, Cost information, Budgeting, and C-V-P analysis. Management Accounting can be classified into:
1) Strategical and Tactical (can be qualitative or quantitative)
2) Short Run and Long Run
Objective of Managerial Accounting:
• To provide information for decision making
• To assist in controlling operations
• To measure the performance of employees or sub units of the organization.
• Management Accountant has to be futuristic instead of provider of historic or current information. He should ask “how better” and help management in decision-making level and for performance improvement.

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Re: Management accounting is a decision making science.Comment

Post by kartikay tiwari 24 on Thu Dec 29, 2016 10:25 pm

Yes, I agree with the statement that Management accounting is a decision making science.

Management accounting is wide arena of accounting. The phrase Management Accounting includes two words, Management and Accounting. It refers to Accounting for the Management. Management accounting is the procedure to develop management reports and accounts that present precise and timely financial and statistical information required by managers to make day-to-day and short-term decisions.

Management accountants look ahead - they focus on forecasting and decision-making. They use information to advice on how the business can move forward, for example, should a company buy another, should it invest in new equipment. Management accounting involves using the internal financial information available to managers, as well as that information which companies must publish by law. This contributes to forward planning, reviewing and analyzing the performance of the business.

Management accounting is fundamental in strategic planning. When a business is looking to make a strategic decision, for example, whether to develop a new product line, acquire another business or expand into other countries. They can use a number of tools to assist decision-making. These include ratio analysis, budgets and forecasts (such as cash flow and variances).
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Re: Management accounting is a decision making science.Comment

Post by Akansha Jain on Thu Dec 29, 2016 10:33 pm

Yes, i do agree with the above statement.
The role of Management Accountant in a corporate world is closely involved in supporting, planning, controlling, directing, communicating and coordinating with the decision-making activities. Specifically, the role of management accountant in an organization is to support the information needs of management. However, the type,size, structure, and form of the organization can affect the complex role of management accountant. Management accountants not participates in the decision-making process but also provide the information that can highly affect the decision within the organization because they are the keepers of financial records.

Management Accounting is an important part of the economic information system, with a key role in decision making, whether we talk about small and medium enterprises or large companies. However, management accounting is superficially treated in most economic entities. It is the science of decision making as it involves rules, concepts, principles, conventions and standards. Management accounting is not a layman’s job but educated professionals are required to do this kind of accounting.

Management accounting is known as the Decision-making science because decision-making provide us a variety of approaches, methods and techniques helpful and useful for making high quality of decision. A decision maker, as an individual, or as a member of formal organization with his own philosophy and perception of the organization, selects for optimizing values within the constraints imposed by the organization. Also Management accounting as a decision making science bring uniformity in financial reporting and to ensure consistency and comparability in the data published by enterprises.

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Re: Management accounting is a decision making science.Comment

Post by Chander singh on Thu Dec 29, 2016 10:45 pm

Managerial accounting is the process of identifying, measuring, analyzing, interpreting and communicating information. Management accounting is used by management to make major decisions like what to sell, how to sell, where to sell etc. To evaluate this decision, an accounting manager could examine the costs that differ between advertising alternatives for each product, ignoring common costs.
Management accounting also helps in make decision of weather company should buy or manufacture a component needed to manufacture the company's primary product. After making this analysis of manufacturing or buying, it can determine which choice is more profitable.
Managerial accounting information provides a data-driven look at how to grow an organisation. Budgeting, financial statement projections and balanced scorecards are examples of how managerial accounting information is used to provide information to help management guide the future of an organisation. By focusing on this data, managers can make decisions that aim for continuous improvement.
With the help of management accounting managers can estimate and manage the cost and profitability of their products and customers. Management Accounting reports generally show the orders in hand, sales revenue, available cash, accounts receivable, raw material and inventory, accounts payable and outstanding debts. These reports further include variance analysis, and other statistics which will help managers in the decision making process. Management accounting helps in taking day to day decisions making process.


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Re: Management accounting is a decision making science.Comment

Post by abhik on Thu Dec 29, 2016 10:47 pm

Management accounting is an important decision-making tool used internally by the management. Tools like budgeting, variance analysis, cost-volume-profit analysis, BEP are some of the prominent tools used in management accounting.

Management accounting is a tool to assist management in achieving better planning and control over the organization. It is relevant for all kinds of an organization including a not-for-profit organization, government or sole proprietorship's. It has a significant place in the businesses and widely used by management to achieving better control and quality decision making.

Management accounting is the practical science of value creation within organizations in both the private and public sectors. It combines accounting, finance and management with the leading edge techniques needed to drive successful businesses.

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Re: Management accounting is a decision making science.Comment

Post by Neetu Singhal on Thu Dec 29, 2016 10:58 pm

Management accounting is an important part of the economic information system, with a key role in decision making, whether we talk about small and medium enterprises or large companies.In management accounting, decision‑making may be simply defined as choosing a course of action from among alternatives. If there are no alternatives, then no decision is required.
A basis assumption is that the best decision is the one that involves the most revenue or the least amount of cost. The task of management with the help of the management accountant is to find the best alternative.
Management accounting consists of a set of tools that have been proven to be useful in making decisions involving revenue and cost data. The tools used in management accounting for short run objectives and decisions such as C-V-P analysis, variance analysis, budgeting, and incremental analysis and tools that looks forward to more than one year are the capital budgeting models.
For each decision, there exists a management accounting tool that may be used to make a good decision. However, the management accounting tools can be used only if the management accountant is successful in providing the information demanded by the particular tool.


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Re: Management accounting is a decision making science.Comment

Post by himashish on Thu Dec 29, 2016 11:12 pm

Management accounting involves providing useful information to managers for decision-making, planning, and control. Accounting, like science, follows a systematic and organized path to understand the economic status of the entity. Hence, Accounting is a science that comprises of rules, principles, concepts, conventions and standards like science.
The main objectives of managerial accounting is:

1.)Assess Risk
2.)Allocation of resources.
3.)Measuring Performance: Management accounting measures two types of performance. First is employee performance and the second is efficiency measurement.
Management accounting is fundamental in strategic planning. When a business is looking to make a strategic decision, for example, whether to develop a new product line, acquire another business or expand into other countries. They can use a number of tools to assist decision-making. These include ratio analysis, budgets and forecasts
Thus decision making is a typical scientific process of management accounting which uses scientific tools like CVP analysis, incremental costing, budgeting, ABC analysis etc. Thus it can be concluded that management accounting is a decision making science.




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Re: Management accounting is a decision making science.Comment

Post by Rishabh verma on Thu Dec 29, 2016 11:18 pm

Accounting is a vast profession and it is constantly improving itself to the specific and according to various needs of its users. Accountancy has branched out into different types of accounting and one of them is management accounting.

Management Accounting produces information primarily for internal use by the company's management. The information produced is generally more detailed than that produced for external use to enable effective organization control and the fulfillment of the strategic aims and objectives of the entity. Information may be in the form budgets and forecasts, enabling an enterprise to plan effectively for its future or may include an assessment based on its past performance and results. The form and content of any report produced in the process is purely upon management's discretion.
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Re: Management accounting is a decision making science.Comment

Post by preeti tamrayat on Thu Dec 29, 2016 11:30 pm

Yes I Agree with this statement because
Small business owners are faced with countless decisions every business day. Managerial accounting information provides data-driven input to these decisions, which can improve decision-making over the long term. Small business managers can leverage this powerful tool to help make their business more successful by understanding how management accounting benefits common business decision.
Management accounting is an important part of the economic information system, with a key role in decision making, whether we talk about small and medium enterprises or large companies.In management accounting, decision‑making may be simply defined as choosing a course of action from among alternatives. If there are no alternatives, then no decision is required.
Management accounting involves providing useful Information to manager for decision making, planning and control. Accounting is like science followed a systematic and organized path understand the economic status of the Entity. Like Science Management Accounting also observe, study, practice, experiment and investigate the economic and current status of the business. With the help of management accounting managers can estimate and manage the cost and profitability of their products and customers. Hence Management Accounting is a science that comprises of rules, principles, concept, convention and standards like science.

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Re: Management accounting is a decision making science.Comment

Post by indira kushwaha on Thu Dec 29, 2016 11:31 pm

The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short term decisions. The definition of management accounting itself tell us that this accounting is done for decision making ,accounts are been made in financial accounting but the management accounting meant to take decisions. Management accounting providing various useful information to managers for decision making, planning, controlling. Its provide many tools like budgeting, variance analysis cost- volume- profit analysis, BEP are some of the prominent tools used in management accounting for decision making.
A science is the systematically organized body of knowledge on a particular subject and in management accounting the decisions are taken place while analysising and observing the previous data and cost sheet and reports .
So we can conclude by saying this that management accoutning is a decision making science as we know science is doing experiment while analysing and management accounting is analysing the day to day activity and make the decision according to the observation.
Smile Very Happy Cool

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Re: Management accounting is a decision making science.Comment

Post by pallavi maindola on Thu Dec 29, 2016 11:39 pm

Management Accounting is the process of analysis, interpretation and presentation of accounting information collected with the help of financial accounting and cost accounting, in order to assist management in the process of decision making, creation of policy and day to day operation of an organization. It is the practical science of value creation within organizations in both the private and public sectors, hit combines accounting, finance and management with the leading edge techniques needed to drive successful businesses.

THE MAIN OBJECTIVES OF MANAGEMENT ACCOUNTING IS TO :
1) Measure performance: Management accounting measures two types of performance. First is employee performance and the second is efficiency measurement.
2) Assess Risk: The aim of management accounting is to assess risk in order to maximize risk.

3) Allocation of  Resources.

4) Presentation of various financial statements to the Management.

The aims behind management accounting are as follows:
 Taking important strategic decisions about the business.
 Planning for the future business activities.
 Evaluation and monitoring of performance.
 Assisting in decision-making.
 Proper utilization of resources.
 Make the basis for financial reports.
 Asset safeguarding.

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Re: Management accounting is a decision making science.Comment

Post by harshitadaga on Thu Dec 29, 2016 11:41 pm

Science is a systematic enterprise that builds and organizes knowledge.
Therefore, when we talk about management accounting, we can compare the characteristics of science with that of Management accounting to justify the given statement.
1. Objectivity:
Scientific knowledge is objective. Objectivity simple means the ability to see and accept facts as they are, not as one might wish them to be. Similarly decisions taken in management accounting are unbiased based on pure facts.
2. Predictability:
Scientists do not merely describe the phenomena being studied, but also attempt to explain and predict as well. Similarly management accounting helps the decision makers in predicting the situation and preparing beforehand.

3. Systematic Exploration:

A scientific research adopts a certain sequential procedure, an organised plan or design of research for collecting and analysis of facts about the problem under study. Management accounting also follows a systematic procedure like the collection pf facts, recording them followed by their analysis.



^There are various other factors that suggest that [You must be registered and logged in to see this link.]. Hence, I agree with the statement.
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Re: Management accounting is a decision making science.Comment

Post by simran sharma on Thu Dec 29, 2016 11:42 pm

As we know that Accounting provides a basis for decisions through the process of recording, summarizing and presenting historical and prospective information.

So management accounting helps us to manage and take good future decision for the smooth functioning of the company. As the management accounting is mainly concerned with the information which is derived from the books of accounts of the company and that detail generally is more concise and usefull than the details which are generally used in cost accounting.

As in this type of accounting, the information is mainly in the form of budgets and forecasts so this helps very much or upto a great extent for a company for its future. So, From my point of view, management accounting is a decision making science.

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Re: Management accounting is a decision making science.Comment

Post by priyanka3004 on Thu Dec 29, 2016 11:57 pm

Managerial accounting is something through which manager can do the identifying, measuring, analyzing & communicating information.
This is the process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short term decisions. Like Small business owners are faced with countless decisions every business day. The management may need qualitative information, which cannot be readily converted into monetary terms. Managerial accounting information provides data-driven input to these decisions, which can improve decision-making over the long term. Small business managers can leverage this powerful tool to help make their business more successful by understanding how management accounting benefits common business decision contexts.
For example, a small business owner may be unsure where he should focus his marketing efforts. To evaluate this decision, an accounting manager could examine the costs that differ between advertising alternatives for each product, ignoring common costs. The same process can be used to determine whether to add product lines or discontinue operations. And this is how accounting helps. Thus decision making is a typical scientific process of management accounting high uses scientific tools like CVP Analysis, Incremental costing etc. Thus we can say that management is a decision making science.

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MANAGEMENT ACCOUNTING IS A DECISION MAKING SCIENCE

Post by Sakshi Taneja on Fri Dec 30, 2016 12:00 am

MEANING
Management accounting, also called managerial accounting or cost accounting, is the process of analyzing business costs and operations to prepare internal financial report, records, and account to aid managers’ decision making process in achieving business goals. In other words, it is the act of making sense of financial and costing data and translating that data into useful information for management and officers within an organization

Managerial accounting information is used by company management to determine what should be sold and how to sell it. For example, a small business owner may be unsure where he should focus his marketing efforts.

Managerial accounting information provides a data-driven look at how to grow a small business. Budgeting, financial statement projections and balanced scorecards are just a few examples of how managerial accounting information is used to provide information to help management guide the future of a company

MANAGEMENT ACCOUNTS AS A SCIENCE
Management accounting is the science of recording and presenting the financial data of an economic entity by observing, detecting, investigating, and identifying the economic events via established collecting, testing, analyzing and presenting methods.
Accounting; like science follows a systematic and organized path to understanding the economic status of the entity.
Science is obtaining knowledge about by a systematic pattern including observation, study, practice, experiments and investigation. Like Science; Accounting requires gaining knowledge about the economic status of an entity by systematic study.


For a scientist; to reach an acceptable conclusive result on a particular matter or topic requires identifying recording, measuring, researching it.
An accountant finalizes the economic results by identifying, analyzing, classifying using the method of double-entry bookkeeping accounting system.
So, Accounting is a science that includes comprises of rules, principles, concepts, conventions and standards in science



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Re: Management accounting is a decision making science.Comment

Post by rohit shivran on Fri Dec 30, 2016 12:35 am

Yes, management accounting is a decision making science. Just like science it follows a systematic and organized path to understanding the economic status of the entity.it is a broadest area of accounting and includes tax accounting too.

Managerial accounting is the process of identifying, measuring, analyzing, interpreting and communicating information for the pursuit of an organization's goals. managerial accounting information is aimed at helping managers within the organization make decisions.

There are different objectives of managerial accounting: -
• Assistance in Planning and Formulation of Future Policies
• Helps in the Interpretation of Financial Information
• Helps in Controlling Performance
• Helps in the Solution of Strategic Business Problems

The Practical role of managerial accounting is to increase knowledge within an organization and therefore reduce the risk associated with making decisions.
So yes management accounting is a decision making science that includes comprises of rules, principles, concepts, conventions and standards.
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Re: Management accounting is a decision making science.Comment

Post by SONU KUMAR on Fri Dec 30, 2016 2:01 am

Science is everywhere no doubt. From waking to sleeping science is every where, even sleeping is also a science. Coming to this statement whether management accounting is a decision making science or not. Science refers to the subject of sort analysis and study. Actual science is based on the relationship between cause and result. So decision making science can be said as the analysis of theoretical and practical aspects of the accounting activities.
Management accounting has originated to serve the managers and to assist them in meeting their needs of calculations. In due course time , accounting was being used as management tool and that is now called Management Accounting. Though management accounting is not a separate accounting, it is only the use of accounting in solving the problems of management and taking timely decisions.
In management accounting, accounting information after analyzing and interpreting by objectives is presented to the management so as to assist in the execution of determination of policies, planning, decision making and coordinating functions.
Management accounting is a very vast subject and it is mainly based on Costing, Budgeting and Sales. It includes Cost accounting, financial accounting, budgeting and forecasting, cost control techniques, interpretation of financial data, statistical methods, tax accounting, reporting, office services, internal auditing. And all these topics play very important role in decision making.
So this statement “  Management accounting is a decision making science” is proving its agreeableness.

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Re: Management accounting is a decision making science.Comment

Post by shubham jaiswal on Fri Dec 30, 2016 11:33 am


The aim of the module is to develop business students' understanding of the role of management accounting in organizations. More specifically it will develop students' competence to use management accounting information for planning, performance evaluation, decision making and costing activities within organizations.

Management accounting is the science which deals with making and analyzing the decisions based on the accounting records. This decision making involves deciding the best alternative among the given options. Successful operation of a business is a direct result of an efficient management decision making. This process not only involves the primary task of decision making but also involves communicating them to other employees so that the its appropriate accuracy is ensured. Some of the popular tools used in management accounting are budgeting, cost analysis, profit analysis etc. Hence we can conclude that managerial decision making is the prominent tool which gives a proper insight for the functionality of a business.

Budgeting, financial statement projections and balanced scorecards are just a few examples of how managerial accounting information which are used to provide information to help management to guide the future of a company. By focusing on this data, managers can make decisions that aim for continuous improvement and are justifiable based on intelligent analysis of the company data, as opposed to gut feelings. The tools and techniques of the management accounting are helpful to the management in planning controlling and coordinating activities of the business, the getting of standard and assessing actual performance regularly enables the management to have ‘management by exception’.

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Re: Management accounting is a decision making science.Comment

Post by sanadul islam on Fri Dec 30, 2016 11:35 am

Management accounting is also known as decision making tool. Managerial accounting provides information and data to help in these decisions, which can improve decision-making over the long term. It is the process by which a manager collects information and by the help of financial accounting analysis, interpretation and presentation is made by the manager so that he/she can make important decision.

Basic reasons for Management accounting is as follows:
1. Its helps to analyses the Business Risk.
2. It helps to know that the resources of company are properly allocated or not.
3. It helps to know the effectiveness of the organization.
4. We can also measure the performance of the employees.
5. It makes a base for financial accounts.
6. It also helps to interpret the future condition and accordingly manager can plan for it.

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Re: Management accounting is a decision making science.Comment

Post by Vartika Shukla on Fri Dec 30, 2016 12:05 pm

Management accounting is the process of preparing management reports and accounts that provides accurate and timely financial statistical information required by managers to make day-to-day and short-term decisions.
It is very important in decision making as in small business. Small business owners are faced with countless decisions every business day. Managerial accounting information provides data-driven input to these decisions, which can improve decision-making over the long term. Managers can leverage this powerful tool to help make their business more successful by understanding how management accounting benefits common business decision contexts. The method of selling is the primary goal of a business. Information gleaned through managerial accounting is often used by the management to determine selling products and services. Managers are able to decide what and how to sell based on the information provided through managerial accounting.
The main aim of management accounting is :-
1 - Formulating Strategies
2- Planning and constructing business activities
3- Helps in decision making
4- Supporting financial report presentation
5- Safeguarding assets
All these points show that management accounting is important in every step of decision making without this businessmen cannot run its business successfully.

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Re: Management accounting is a decision making science.Comment

Post by Saurabh khandelwal on Fri Dec 30, 2016 1:31 pm

Management accounting is an important decision-making tool used internally by the management. Tools like budgeting, variance analysis,cost volume profit analysis. Break Even Point are some of the prominent tools used in management accounting. It is relevant for all kinds of an organization including a not-for-profit organization  Cool

Management accounting is meant for the management to take informed decisions about the business. Reports of management accounting are a secret of the company and hence they are not disclosed to anyone except the core management team who are responsible for taking decision.
The main objectives of managerial accounting is:

1.)Assess Risk
2.)Allocation of resources.
3.)Measuring Performance: Management accounting measures two types of performance. First is employee performance and the second is efficiency measurement.
Moreover management accounting helps how to utilize the whole data properly and helps in less time consuming and helps in make and buy analysis ,Activity based costing techniques.
Lastly I would like to add one point that the Managerial accounting information is used by company management to determine what should be sold and how to sell it. For example, a small business owner may be unsure where he should focus his marketing efforts. To evaluate this decision, an accounting manager could examine the costs that differ between advertising alternatives for each product, ignoring common costs. This process is known as relevant cost analysis and is a technique that is taught in basic managerial accounting courses. The same process can be used to determine whether to add product lines or discontinue operations.

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Re: Management accounting is a decision making science.Comment

Post by Siddharth Jain on Fri Dec 30, 2016 2:33 pm

Managerial Accounting is the branch of accounting that supports company management in decision making.
Small business owners are faced with countless decisions every business day. Managerial accounting information provides data-driven input to these decisions, which can improve decision-making over the long term. Small business managers can leverage this powerful tool to help make their business more successful by understanding how management accounting benefits common business decision contexts.
“Management accounting is the practical science of value creation within organizations in both the private and public sectors. It combines accounting, finance and management with the leading edge techniques needed to drive successful businesses.”

The aims behind management accounting are as follows:

Taking important strategic decisions about the business
Planning for the future business activities
Evaluation and monitoring of performance
Assisting in decision-making
Proper utilization of resources
Make the basis for financial reports
Asset safeguarding.

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Re: Management accounting is a decision making science.Comment

Post by Varshita Rathore on Fri Dec 30, 2016 2:36 pm

MANAGEMENT ACCOUNTING refers to the process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions.

The most important factor of management accounting is DECISION MAKING; as it is the base for all financial information required for future analysis, as it helps in achieving better planning and control in an organization. It is best suited for proper allocation of resources and reduces wastage to the minimum. It also helps in managing risk for better profits for the firm. In the present scenario, just recording day-to-day transactions is not enough; one need to adapt to changes and analyze the daily transactions for effective decision making.

Therefore, it won’t be wrong to state that management accounting is a decision-making science. It is a source of analyzing, communicating and using decision-relevant financial and non-financial information to produce effective outputs.

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Re: Management accounting is a decision making science.Comment

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