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The
traditional accounting known as single entry system of book keeping, was in
vogue right from time immemorial. The beginning of modern accounting took the
the form of financial accounting based on double entry system. Under this method,
the function of accounting was to keep record of business transactions in the
book of prime entry, preparation of ledger accounts on the basis of posting of
these transactions.
In
fact, the idea of Management Accounting originated by Shri James H. Bliss, who
in his “Financial and Operating Ratio In Management” defined that “it is
through the intelligent and effective use of accounting data that the
management of a business may maintain the best contacts with details of its
operations and affairs that exercise the most control over them”
Management
Accounting : Concepts and Definition
The
Term “Management Accounting” consist of two words ‘Management and Accounting’. Management refers to the
functions of planning, staffing, controlling, and co-ordinating. While Accounting
refers to record, compilation, analysis and presentation of various financial
transaction.
Definitions
1. According to J. Batty: “Management Accounting is
the term used to describe the accounting methods, systems and techniques which,
coupled with special knowledge and ability, assist management in its task of maximizing
profits or minimizing losses.”
2. According to The American Accounting Association:
“Management Accounting includes the methods and concepts necessary for
effective planning, for choosing among alternative business actions and for
control through the evolution and interpretation of performances.”
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