Management Accounting

Q. Define Management Accounting.

 

The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day to day and short time decisions is called Management Accounting.

Unlike financial accounting, which produces annual reports mainly for external stakeholders, management accounting generates monthly or weekly reports for an organization's internal audiences such as department managers and the chief executive officer. These reports typically show the amount of available cash, sales revenue generated, amount of orders in hand, state of accounts payable and accounts receivable, outstanding debts, raw material and inventory, and may also include trend charts, variance analysis, and other statistics.