Objectives of Management Accounting The primary objective of management accounting is to enable management to maximize profit or minimize losses. This is done through the presentation of statements in such a way that management is able to take correct policy decision. Followings are the important Objectives of management accounting : (1) Planning and policy formulation : The object of Management accounting is to supply necessary data to the management for formulating plans. Planning is essentially related to taking decision for future. It also includes forecasting, setting goals and deciding alternative course of action. Management Accountant prepared statements of past results and gives his preference for a particular alternative. The figures supplied and opinion given by the management accountant help management in planning and policy formulation. (2) Helpful in controlling performance : Management accounting devices like standard costing and budgetary control are helpful in controll...

Scope of management accounting Management accounting is anew approach to Accounting. It provides techniques for the interpretation of Accounting data. It also helps in Developing realistic approach  to future course of action. The main Aim is to helps management in it's functions of planning, directing and Controlling. Management accounting is related to a number of fields. At the seven International Conference of accountant held in Amsterdam in 1957, the main emphasis was on cost accounting, Budgetary control, material control, interim Reporting, Determination of the most efficient and economical accounting system, Special cost and Economic studies and  assessing management in interpreting financial data. The following facts of management accounting are if a great significance and firm the scope of this subject. (1) Financial Accounting : Financial Accounting deals with the historical data. The record facts about an organization is useful for planning the future course of act...

Distinction between partnership and company These are the following differences between  partnership and company:- (1) Regulating Act : A Company is regulated by companies Act, 2013, while a partnership firm is governed by the Indian Partnership Act, 1932. (2) Registration : A company can not come into existence unless it is registered, whereas for a partnership firm registration is not compulsory.  (3) Number : The minimum number in a public company is seven and in case of a private company two. In case of partnership is two. The maximum number of members in case of a private company is two hundred but in case of a public company there is no such maximum number of Member. In partnership the number should not exceed twenty, while in case of banking business, it should not exceed ten.  (4) Liability : In case of joint stock company the liability of shareholders is limited (except in case of unlimited companies) to the extent of face value of shares or to the extent of guar...

Management Accountings management accounting is comprised of two  word management and Accounting .it is the study of managerial aspect of Accounting. the emphasis of management Accounting is to redesign Accounting in such a way that it is helpful to the management in formation of policy , control  of execution and appreciation of effectiveness. it is that system of accounting which helps management  in carrying out it's functions more efficiently.    Definitions Anglo-American Council on Productivity - "maccounting is the presentation of  Accounting information in such a ways as to assist management in the creation of policy and the day-to-day operations of an undertaking."  Characteristics of nature of management Accounting These are the following important features of management Accounting :- (1) Providing accounting information : Management accounting is based on accounting information. The collection and Classification of data is the primary functi...

Rules and principles of double entry System Under traditional approach, there are four types of accounts called Personal Accounts. Real Accounts. Nominal Accounts. Valuation Accounts. Personal accounts - Accounts relating to persons are called personal accounts. These persons may be customers, suppliers, money lenders, owners and banks. Real Accounts - Accounts related to tangible and intangible properties and possession are known as real accounts are classified as Tangible Real Accounts and Intangible Real Accounts. Nominal Accounts - Accounts concerning the expenses, losses, incomes and gains of a business enterprise are called as nominal Accounts. These accounts helps in preparation of Income statement. Valuation Accounts - The process of attaching monetary value to some assets and liabilities is called as valuation. The accounts where such valuation is effected are called as valuation Accounts. Rules of debit and card under traditional approach Personal Account : Debit the receiver...

Double entry system Accounting historian have established that double entry book keeping was practised in Florence in the later 13th century. Although several Systems were developed by mathematicians and businessman to summarized and communicate business transaction, only the one which Luca Friar Pacioli complied has survived and has become the basis of modern Accounting. Luca Friar Pocioli is rightly recognized as the father of modern accounting. He authored the first printed book on double entry book keeping. It was titled as  "Summa de arithmetical geometrics proportionate proportionality". He described a method of arranging accounts in such a way that the double aspect  (present in every Account transaction) would be expressed by a debit amount and an equal and offsetting credit amount. Double entry system is the system under which each transaction is regarded to have two fold aspects and both the aspects are recorded to obtain Complete record of dealings. Double entry sy...

Classification of Accounting principles Accounting principles are also referred to as standards, assumption, postulates, concepts, convention, axioms, generally accepted accounting principles (GAAP) etc. The above term are interchangeably used though they have different connotations. We will discuss here only assumption, concepts and conventions because these terms have reasonable bearing on the accounting system. (A) Accounting assumptions  Certain fundamental Accounting assumptions underline the preparation and presentation of financial statement. Institute of Chartered Accountants of India and International Accounting Standards Committee vide AS-1 respectively have stated the following as Fundamental accounting assumption : (1) Going concern : Accounting records presume that the business will exist for a very long time unless the evidence available is contrary to this. Under this assumption, "the enterprise is normally viewed as a going concern, that is, as continuing in operat...