Meaning of Management Accounting

>> August 28, 2010


We can explain the meaning of management accounting as the science in which accounting information are collected and analyzed. After this, these information are provided to management for creation of policies and decision making.

According to Anglo American Council on Productivity

" Management accounting is the presentation of accounting information in such a way to assist management in creation of policy and day to day operation of an undertaking."

From above meaning, we find that management accounting is combination of two words, one is management and other is accounting.

Management means decision making.

But Question is more important than meaning of management

How does manager take decision?

Accounting means resource of accounting date.

But, Question is more important that meaning of accounting

Why does Accountant do hard work day and night for recording and analysis of financial transactions?


Both above two questions are inter-related and invention of management might happen due to the finding answer of above two question

Ans of 1st question : Manager can take the decision with accounting information.

Ans. of 2nd question : Accountant do hard work for providing help to management of company.

After this following Cycle will start

Raw data



Financial Accounting  + Cost accounting



Useful Data



 →→ Management Accounting →→ Decision Making


So, it is concerned with accounting information that is useful to management. Management accounting's latest research was started since 1950 and after 60 years, its research has reached at the top level and financial statement analysis, ratio analysis, fund flow analysis, cash flow analysis, working capital analysis, investment analysis etc. are its main technique to analyze company and its income and financial position and on these basis, management takes the decision whether company invest his money in that particular company or not.

In simple words, any form of accounting enables business to be conducted more efficiently can regarded as management accounting.





You might like:


Follow Us


0 comments:

Post a Comment

About Accounting Education


An educational site with 2500+ articles, solutions, video-guides and tutorials on all topics related to accounting and finance.

Get Update on Mobile


Type svtuition.org in your mobile phone web browser for free access anytime, from any place.The content is designed specifically for cell phones and mobile devices.

Contact Us


Contact us Send an Email Phone number and vCard LinkedIn profile Follow us on twitter