Question

To J. W i ll the United Way (a nonprofit charitable organization) would use each area (planning, controlling, and evaluation) TP2. LO 1.1 There are individuals who are under the impression that managerial accounting provides services mainly for manufacturing organizations. Are they correct? Explain. TP11 Thinkba

Answer 1

No, management accounting provides services wherever there is planning,controlling and evaluating.

Setting goals and making an action plan for achieving the goals involves planning.

Controlling is checking the day to day activities which are in conformity with the planning, that means controlling facilitates functions of planning and coordination within an organization.

Evaluation is done whether everything is done according to the planned action or not and the progress is made according to the set goals or not and if any deviation in the course of action taken towards goals then corrective action is suggested by evaluation.

Hence as per the above definition and explanation , managerial accounting is part and parcel of the any organization which has planning, controlling and evaluation and management is part of every organization and thus the managerial accounting.

Finally managerial accounting helps in decision making process, wherever there is need for decision making, managerial accounting necessary, so, managerial accounting is not only confined to the manufacturing industries but also for all the organizations where there is need for the managerial decision making.