Bus630 Final Paper

Decision Making with Managerial Accounting

Agnes Pettway

BUS630: Managerial Accounting

Instructor: Thomas Badley

December 23, 2013

Definition of managerial accounting

Managerial accounting is concerned with providing information to managers- that is, to those who are inside an organization and who direct and control its operations. Managerial accounting can be contrasted with financial accounting, which is concerned with providing information to stockholders, creditors and others who are outside an organization (Garrison and Noreen, 1999).

Managerial accounting also known as “cost accounting” is the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization’s goals. The different between managerial and financial accounting is that managerial accounting information is aimed at helping managers within the organization make decision. Financial accounting is aimed at providing information to parties outside the organization.

Managerial accounting focuses on internal users—executives, product managers, sales managers, and any other personnel within the organization that accounting information to help make important decisions. Managerial accounting information doesn’t have to be confirmed with U.S. GAAP. Conformance with U.S. GAAP may be a deterrent to getting useful information for internal decision-making purposes.

Managerial accounting is also the process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decision.

“Managerial Accounting is the branch of accounting that meets managers' information needs. Because managerial accounting is designed to assist the firm's managers in making business decisions, relatively few restrictions are imposed by regulatory bodies and generally accepted accounting principles” (Schneider, 2012)....