Managerial Accounting
Managerial accounting
information is intended to serve the specific, and varied, needs of
management. Business managers are charged with business planning,
controlling, and decision making. As such, they may desire specialized
reports, budgets, product costing data, and other details that are
generally not reported on an external basis. Further, management may
dictate the parameters under which such information is to be accumulated
and presented. For instance, GAAP may require that certain product
development costs be deducted in computing income; on the other hand,
management may see these costs as a long-term investment and stipulate
that internal decision making be based upon income numbers that exclude
such costs. This is their prerogative. Hopefully, internal reporting is
being done logically and rationally, but it need not follow any
particular set of mandatory guidelines.
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