Managerial Accounting

Published on November 2016 | Categories: Documents | Downloads: 29 | Comments: 0 | Views: 266
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Managerial Accounting
Managerial Accounting is the process of identifying, measuring,
analyzing, interpreting, and communicating information for the pursuit of an organization's
goals. Managerial accounting is linked to cost accounting, cost management, activity
management and investment management. Managerial accounting involves generating
information for internal users including all levels of management and others within the
organization. Some of the same information is reported that appears in the external financial
statements, but frequently the information provided to internal users is in more detail,
provided more often, and in many different forms depending on how the information is to be
used. A key difference between financial accounting and managerial accounting is that
managerial accounting reports are not directly constrained by GAAP.
Cost accounting involves determining the cost of something, such as a
product, a service, an activity, a project, or some other cost object. Cost management is said to
be a more comprehensive concept than cost accounting in that the emphasis is on managing
and reducing costs rather than reporting costs. In other words, it is a long run proactive
approach rather than a short run reactive approach. Activity management, or activity based
management, places emphasis on continuously improving the activities and tasks, or work that
people perform in an organization. Investment management involves the planning and decision
process for the acquisition and utilization of an organization's resources, including human
resources as well as technology, equipment and facilities. The concept of investment
management includes the capital budgeting discounted cash flow methods traditionally studied
in accounting and finance courses, but is more comprehensive in that the organization's
portfolio of interrelated investments is considered as well as the projected effects of not
investing.

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