Question 9. What is management accounting?
Answer 9. The term 'Management Accounting ' represents a merger of two words 'Management' and 'Accounting ' . Management refers to the function of planning, direction and control etc while Accounting refers to record , compilation ,analysis and presentation of various financial transactions. Hence management accounting provides all such accounting informations as are required by management for planning, direction and control of business activities.
Definition : " Management Accounting includes the methods and concept necessary for effective planning, for choosing among alternative business actions and for control through the evaluation and interpretation of performances."
- The American Accounting Association