Definition of Management Accounting?

Definition of Management Accounting:

It is functional activity involving the collection, recording, storage and summary of both financial and non-financial data, and the communication of information to interested parties working mainly an entity.

Management Accounting (MA) which measures and reports financial and nonfiancial information. It help managers make decisons to fulfill the goals of an organization. For example, the common decision such as pricing which needs cost information of products and profitability of indidual product. All of them can't get information from financial report.

MA is for internal users. It is Future Oriented. It no need to follow standard but Financial Accounting need to follow standard such as GAAP. MA also no specific formats.

I hope can help to understand MA more. Welcome to visit my blog which is focus on Accounting.

According to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non management groups such as shareholders, creditors, regulatory agencies and tax authorities" (CIMA Official Terminology)