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Meaning, Definition, Nature,Scope and limitation of management accounting.

Meaning:- starting with systematic recording of transaction and cost subsequently implemented by integration of financial and cost record, the basic structure of traditional and accounting has led to emergency of what in technical language is known as management accounting.

Definition:- according to institute of c.a.wales"management accounting is the presentation of accounting information in such a way as to assist management in the creation of policy and in the day to day operation of any undertaking. "

Nature of management accounting

  • Selective nature
  • Provide data, not the decision
  • Concerned with future
  • It stresses on the study of cause and effect relationship
  • Highly sensitive to management needs

Scope of management accounting
  • Financial accounting
  • Cost accounting
  • Budgeting and forecasting
  • Cost control procedure
  • Reporting
  • Tax accounting
  • Method and procedure

Limitation of management accounting
  • Based on financial and cost account
  • Lack of knowledge and understanding of the related subject
  • Persistence on intuitive decision-making
  • Continuity and participation
  • Lack of objective
  • Evolutionary stage







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