Management Accounting an Financial Accounting
INTRODUCTION OF ACCOUNTING
Accounting is a methodical recording, reporting and analysis of financial trade of a business. Accounting known also as strength of business. Principled and professional accounting forms a clear financial image of a business and allows managers to make informed judgement. Accounting is a custom that keep investors well-informed of development in the business and by keeping the business profitable.
Accounting allows a company to investigate the financial performance of the business at the statistic. A number of disciplines are involved in accounting. At the root of all accounting there is a person who known as book keeper or accountant. This person will keep tracks of all of the financial that a business own. The book keeper or accountant main role is to keep the records of the company stable so that anyone can access the financial state of the company. (Anon., 2003)
There is two main accounting that been discuss here that is management accounting and financial accounting.
MANAGEMENT ACCOUNTING
Management accounting refers to accounting information developed for managers within an organization. CIMA (Charted Institute of Management Accountants) defines Management accounting as ” Management Accounting is the process of documentation, measurement, accretion , study ,preparation, clarification and communication of information that used by management to plot, gauge and control within an unit and to assure appropriate use of an accountability for its resources”. This is the phase of accounting concerned with providing information to managers for use in planning and controlling operations in decision making. (Anon., 2005)
Management accounting is concerned with providing information to managers. In contrast, financial accounting is concerned with providing information to stockholders, creditors and others who are outside an organization. Management accounting provides the essential data with which organization are actually run. Because it is manager oriented, any study of management must be preceded by some understanding of what managers do, the information managers need and the general business environment.
The purpose of management has been defined as making people capable of joint performance through common goals, common values, the right structure and providing the training and development they need to perform and to respond to change. The fundamental purpose of the management process is to be protected as it faces fluctuations, the strength and the endurance of a company through an on-going coordination of accomplishments, efforts and resources. (Anon., 2011) (Anon., 2005)
Therefore the management process includes creating organizational directions in terms of goals and schemes. Besides that, it supporting the organisation