Explain the scope of management accounting and discus how it serves the management needs?

Ans. Scope of management accounting: - Management accounting has a vast area which includes financial accounting and extends to the functions of a system of cost accountancy, budgetary control and statistical methods. The scope of management accounting includes:-

 1. The management accounting is likely to evaluate the variation by reasons and the accountability and to put forward suitable corrective measures.

 2. Analyzing and interpreting accounting and other figures to craft it logically and usable to management.

 3. Configuration, installation and operation of accounting cost accounting and information systems, as a result it has to utilize these systems to get together the altering needs the of the management functions.

 4. Provide system and techniques to estimate the recital of the right managements in the beam of the objectives of the firm.

 5. The management accounting presents the history the figures in such a way as to reproduce the trends of events to the management.

  6. Providing mean of communicating management plans to the various levels of the organization and assists the management in directing their activities

 7. It is support management in decision making by:-

         a. Providing significant accounting data,

         b. Analyzing the outcome of alternative proposals on the profits and the situation of the enterprise.

 

Serve Management Needs:- Management accounting’s main function is to assist the management. It presents comprehensive accounting information to the management to the facilitate them to keep useful control over stores and stock, to increase efficiency of the organization and check wastage and losses. The various advantages resulting by the management from a high – quality system of accounting are as follows:-

 1. Management accounting helps in organizational efficiency.

2. Management accounting check and remover wastages.

3. Management accounting formulates comparisons.

4. Helps in price fixing.

5. Management accounting helps in maximizing profitability.

6. Management accounting protects against Seasonal fluctuations and trade Cycle.

7. Management accounting helps in growth of National Economy.

8. Management accounting helps in performance appraisal of business.