Question

In your own words, write your own understanding of the term managerial accounting.

Answer 1

Managerial or Management Accounting is a specific branch of accounting which is associated to the managerial decision making. Financial reporting provided by financial and cost accounting to help management in formation of operational planning, investment decision and business strategy.

Managerial accounting is very useful and demanding in today's highly competitive and fast-paced business where quick decisions need to be made. These decisions might have to do with regular activities, budgeting or cash flow management. Managerial accounting will use accouing data to make sense of the situation very fast.

Finally we can conclude that management accounting helps in analysing and recording financial information which can be used by a business to increase its efficiency and performance. It provides the financial information time to time using easy-to-understand techniques. However, the information required to make managerial decisions depends and based on financial statements. Therefore it becomes important to prepare correct records. Despite having various limitations it is considered strong managerial tool for a business.

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