Accounting. Methods and principles of management accounting (the most important)

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Accounting. Methods and principles of management accounting (the most important)

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6. Methods and principles of management accounting

Management accounting method is a set of different ways through which management accounting objects are reflected in the enterprise information system.

Components of the management accounting method.

1. Documentation - primary documents reflecting the production activities of the enterprise. Primary accounting is the main source of information for management accounting.

2. Inventory - a way to determine the actual state of the object.

3. Grouping and summarizing information effectively used to make strategic decisions.

4. Control accounts - entries on the total amounts of transactions of this period help to establish the reliability of the accounts.

5. Planning - a continuous process that compares the capabilities of the enterprise and market conditions.

6. Rationing - the process of calculating norms, aimed at turning costs into products.

7. Limitation - control over material costs. The limit is the rate of resource consumption per unit of output.

8. Analysis - this element is exposed to the activities of the entire enterprise and departments separately. As a result, deviations and the reasons that caused them are identified, and assistance is provided in making management decisions.

9. Control - the final planning process that allows you to eliminate the deviations that have arisen.

Principles of management accounting.

1. Continuity of the enterprise - the enterprise will work, will not reduce the scale of production, will not self-destruct.

2. Unified planning and accounting units of measurement for direct and feedback between planning and accounting, for the connection between managerial and financial accounting in terms of production costs and output.

3. Multiple use - from the minimum amount of data to obtain the necessary amount of information for management decisions.

4. Completeness and analyticity - the indicators in the reports should not require additional processing.

5. Periodicity - information is provided in a short time for timely decision making.

Methods for generating internal reporting indicators:

1) at the zero level contains information about the reports of auxiliary production;

2) at the first level, the information is contained in the consolidated documents of accounting, warehousing;

3) at subsequent levels, all information is summarized and converted into reporting documentation.

In management accounting, there are such concepts as standard hour, labor hour, machine operating hour, natural meters of production volume. When choosing a meter, they are guided by the principle of its usefulness in a given situation. Management accounting reflects the quantity of materials, their cost for each delivery and from each supplier, the number of products sold, their cost, etc.

In management accounting, reports are produced on a regular basis and upon request. Reports can be prepared quarterly, monthly, weekly, daily, as they contain information that requires immediate action.

Management accounting in the form of a process limited by the scope of the enterprise prepares information for managers for planning, proper management and control over the activities of structural divisions and the enterprise as a whole.

Author: Kabkova E.N.

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