Describe in detail the characteristics of managerial accounting.
Definition Definition Process by which financial information is analyzed, interpreted, and communicated to managers to support the achievement of an organization's goals. The main objective of managerial accounting is to maximize profits and minimize losses.
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Solution
Managerial accounting is that part of accounting that deals with quality of information. It involves measuring , analyzing , interpretation and communication of the financial information. The following are the characteristics of managerial accounting.
1. Covers future activities
The main emphasis of managerial accounting is on future activities. It aims at covering the decisions implemented by managers which are related to company's future and its activities.
2. Provides qualitative information
Managerial accounting aims at provides quality of the data. It aims at providing information and the interpretation and judgement is done by manager.
3. Covers non- financial measures
Managerial accounting provides various methods for measuring of the data required in financial accounting. These measures reflect quality rather than values which are crucial for decision making purpose.
4. Provides financial information
Managerial accounting helps in gathering the information required for financial activities. It provides the information to managers and thus helps in making decisions.
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