Quiz 1: Introduction to Managerial Accounting

Business

Accounting: It is a systematic process of recording the monetary transactions related to a specified period. The purpose to record the business-related transactions is to summarize the results of conducting the business activities, to evaluate the performance of the organization in terms of profits and loss. Accounting is required to communicate the results to the interested parties. There are various types of accounting such as financial accounting, human resource accounting, managerial accounting, sustainability accounting. Managerial accounting is a process where in the managers provides the organization with financial and non-financial information for the future use. It consists of data related to business operations and fund management for multiple projects. This information is used by the managers for future planning and decision making to run the business. It is a provision which helps the internal as well external users. Managerial accounting is not bound by any standard rules and regulations. It is a support tool for the managers. It helps in planning, controlling, and decision making. Earlier managerial accounting was only for internal users but now it is used by all the stake holders for their future decisions.

The provision of accounting information for internal users is known as c) Managerial accounting Managerial Accounting is a process where in the managers provides the organization with financial and non-financial information's for the future use. This information is used by the mangers for future planning and decision making in the running of the business. It is a provision which helps the internal as well external users. Managerial accounting is not bound by any standard rules and regulations. It is a support tool for the managers. It helps in planning, controlling, and decision making. Earlier managerial accounting was only for internal users but now it is used by all the stake holders for their future decisions.

The three broad objectives of managerial accounting are: To provide information for planning the organization's activities - the managerial accounting provides with financial and nonfinancial information, based on which the managers can plan for the future course of action for the organization. The managerial accounting provides various costs that are incurred in the production, which in turn helps the managers to plan for the pricing of the final product. To provide information for controlling the organization's affairs - the managerial accounting provides with details related to the production. It also shows the time and usage of raw material. The managers can use this information to control further waste of time and cost. They can reduce the wastages by studying the detailed report given by the managerial accounting. To provide information for making decisions - the managerial accounting provides the details based on which the managers can decide upon the future course of action to be followed. The information gives all the minute details based on which the managers take decisions for the future operations. The study provides various alternatives to choose from for each and every step, and to choose among these alternatives, is called decision making.