Features or Characteristics of Management accounting | for Commerce

Management accounting

Management accounting is that adoption and analysis of accounting information and it's diagnosis and explanation in such a way as it to assist management.

Features or Characteristics of Management accounting

These are the following features of Management accounting:-

(1) Providing accounting information  :  Management accounting is based on accounting information. The collection and classification of data is the primary function of accounting department. The information so collected is used by the management for taking policy decision. Management accounting involves the presentation of information in a way it suits managerial needs.

(2) Cause and effect analysis  :  The cause and effect relationship discussed in management accounting. If there is loss the reason for loss is probate. If there is profit  the factors directly influencing the profitability are also studied.

(3) Use of special techniques and concept  : Management accounting used special techniques and concepts to make accounting data more useful. The techniques usually used include financial planning and analysis, standard controlling, budgetary control, marginal costing, project appraisal, control accounting etc.

(4) Taking important decision  :  Management accounting  helps in taking various important decision. It supply necessary information to the management which may base it's decision on it. The historical data is studied to see it's possible impact on future decision.

(5) Achieving objectives  : In management accounting the accounting information used in such a way that it helps in achieving Organizational objectives. The historical data is used for formulating plans and setting up objectives.

(6) No fixed norms followed  :  There is no specific rules are followed in management accounting. Though the tools of management Accounting are the same but there use differ from concern to concern.

(7) Increase in efficiency  : The purpose of using accounting information is to increase efficiency of the concerns. The efficiency can be achieved by setting up goals for each department or section. The performance appraisal will enable the management to pin point efficient  and efficient spots.

(8)  supply information and not decision  :  The management accounting supply information to the management. The decision are to be taken by the  top management. The information is classified in the manner in which it is required by the management.

(9)  Concerned with forecasting  :  The management accounting is concerned with the future it helps the management in planning and forecasting. The historical information is used to plan future course of action. The information is supplied with the object to guide management for taking future decision.