Examples of operating information are:
This accounting is concerned with the recording of transactions for a business enterprise and the periodic preparation of various reports from such records.
The records may be for general purpose or for a special purpose.
It deals with specific problems that is faced by enterprise managers at various organizational levels.
The management accountant is often concerned with finding alternative courses of action and then helping to select the best one.
For e.g. The accountant may help the finance manager in preparing plans for future financing or may help the sales manager in deciding the selling price to be fixed on a new product by providing suitable data.
Generally management accounting information is used in three important management functions:
4. Marginal costing is an important technique of management accounting which provides multi dimensional information that helps in decision making.
A number of specialized fields in accounting also have evolved besides financial accounting. Management accounting and cost accounting are the result of rapid technological advances and enhanced economic growth. The most important among them are explained below:
1. Tax Accounting:
Accountants specializing in this branch of accounting are familiar with the tax laws affecting their employer or clients and are up to date on administrative regulations and court decisions on tax cases.
2. International Accounting:
This accounting is concerned with the special issues associated with the international trade of multinational business organizations or MNC’s.
Accountants specializing in this area must be familiar with the influences that custom, law and taxation of various countries bring to bear on international operations and accounting principles.
3.Social Responsibility Accounting:
This branch is the newest field of accounting and is the most difficult to describe. Social responsibility accounting is so called because it not only measures the economic effects of business decisions but also their social effects, which have previously been considered to be immeasurable.
Social accounting is also known as social accounting and auditing, social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting or accounting.
4. Inflation Accounting:
Inflation accounting is a term describing a range of accounting models designed to correct problems arising from historical cost accounting in the presence of highinflation and hyperinflation. Inflation accounting is used in countries experiencing high inflation or hyperinflation.
5. Human Resources Accounting:
Human resource accounting is the process of identifying and reporting investments made in the human resources of an organization that are presently unaccounted for in the conventional accounting practices. It is an extension of standard accounting principles.
This system of accounting is concerned with, “the process of identifying and measuring data about human resources and communicating this information to interested parties”.
6. Cost Accounting:
The industrial revolution in England posed a challenge to the development of accounting as a tool of industrial management. This necessitated the development of costing techniques as guides to management action.
Cost accounting emphasizes the determination and the control of costs. It is concerned primarily with the cost of manufacturing processes.
In addition, one of the principal functions of cost accounting is to assemble and interpret cost data, both actual and prospective, for the use of management in controlling current operations and in planning for the future.