Managerial Accounting Is A Set Of Methods Used By Managers

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Week 6 Final BUS630: Managerial Accounting Dr. John Kuhn Windell K Smith Jr December 21, 2014 Managerial accounting is a set of methods used by managers to help them make effective and efficient decisions about financial resources. These methods were primarily designed to educate the decision makers within an organization. Managerial accounting primary focus is the whole company as well as segments within the organization, which are of major importance. Managerial accounting can be used strategically within a business to evaluate performance, pricing decisions, investments, and determining long range planning and policy development. Managerial accountants try to determine important factors to consider when trying to…show more content…
Managerial accounting is an important task for an organization that is considering expansion because it focuses on providing executives, managers, and investors with the information required to approve the expansion. The fact that financial information is available whenever necessary is the biggest difference between managerial and financial accounting, which produces reports at a set interval. Accounting departments provide financial data used in performance reports that are designed specifically for an individual executive, manager, or department. The detailed performance report basically provides a comparison between budgets and actual results for a specific time period, which enables executives, managers, or departments to identify problem areas. Although financial and managerial accountants have some similarities it is important that different personnel are assigned to fulfill each role within an organization because of the glaring differences of the two positions. The fundamental principles of managerial accounting are planning, controlling, and decision making. The planning process of managerial accountant is usually performed by management personnel and establishes goals that include short term profits, maintaining or increasing market share, and most importantly increasing overall equity or profit margin. The planning function is when an organization or department creates its budget. The budget
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