Managers are classified on the basis of range of activities for which they are responsible” throw light. Give suitable examples to support your answer.

Management accounting can be seen as Management-situated Accounting. Fundamentally it is the investigation of administrative part of money related ACCOUNTING, “ACCOUNTING in connection to administration work”. It demonstrates how the bookkeeping capacity can be re-arranged to fit it inside the structure of administration action. The essential assignment of administration bookkeeping is, in this manner, to update the whole bookkeeping framework with the goal that it might serve the operational needs of the firm. On the off chance that outfits clear bookkeeping data, past, introduce or future, which might be utilized as a reason for administration activity. The money related information are so formulated and methodically improvement that they turn into a interesting instrument for administration choice.


The expression “MANAGEMENT ACCOUNTING”, watch, Broad and Carmichael, covers each one of those administrations by which the bookkeeping office can help the best

administration and different divisions in the development of arrangement, control of

execution and valuation for adequacy. This definition calls attention to that

administration is endowed with the essential assignment of arranging, execution and

control of the working exercises of an endeavor. It continually needs

bookkeeping data on which to base its choice. A choice in view of

information is generally right and the danger of failing is limited. The position of the

administration in regard of its capacities can be contrasted with that of an armed force

general who needs to wage a fruitful fight. A general can barely battle

effectively unless he gets full data about the encompassing circumstance

what’s more, the degree of adequacy of each of his forces and, to the broaden

conceivable, even the adversary’s aims. Like a general a fruitful

administration too endeavors to exceed different rivals in the field by

streamlining its working productivity. It needs an exhaustive information of the

circumstance and the conditions in which the firm works. Such learning

must be increased through the handled monetary information rendered by the

bookkeeping division on the premise of which it can take approach choice

as to, control, and so forth. It is here that the part of administration

bookkeeping comes in. It supplies a wide range of bookkeeping data as such proclamations as might be required by the administration. Accordingly,

administration bookkeeping is worried about the gathering, arrangement

what’s more, elucidation of data that helps singular officials to satisfy

hierarchical goals.

The Report of the Anglo-American Council of Productivity (1950) has moreover

given a meaning of administration bookkeeping, which has been generally

acknowledged. As indicated by it, “Administration bookkeeping is the introduction of

bookkeeping data so as to help the administration in creation

of strategy and the everyday operation of an endeavor”. The thinking

added to this announcement was, “the system of bookkeeping is of extraordinary

significance since it works in the most almost all inclusive medium accessible

for the declaration of certainties, with the goal that actualities of awesome decent variety can be spoken to

in a similar picture. It is not the generation of these photos that is a capacity

of administration however the utilization of them.” An investigation of the above definition

demonstrates that administration needs data for better basic leadership and

viability. The accumulation and introduction of such data come

inside the territory of administration bookkeeping. Therefore, bookkeeping data

ought to be recorded and exhibited as reports at such successive

interims, as the administration may need. These reports display a deliberate

audit of past occasions and also a systematic overview of current financial

patterns. Such reports are principally suggestive in approach and the information

contained in them are very state-of-the-art. The bookkeeping information so provided in this way

give the educational premise of activity. The nature of data so

provided relies on its value to administration in basic leadership.

The standard approach is that, as a matter of first importance, a careful examination of the entire administrative process is made, at that point the data required for every range is

investigated, lastly, all the data, after examination as far as options,

is thought about before touching base at an administration choice. It is to

be comprehended here that the bookkeeping data has no end in itself; it is a unfortunate chore.


The term administration bookkeeping is made out of “MANAGEMENT” and

‘ACCOUNTING’. “Management” here does not mean just the best

administration however the whole work force accused of the specialist and

duty of working a venture. The errand of administration bookkeeping

includes outfitting bookkeeping data to the administration, which may

construct its choices in light of it. It is through administration bookkeeping that the

administration gets the devices for an investigation of its managerial activity and can

lay appropriate weight on the conceivable choices as far as costs, costs and

benefits, and so on yet it ought to be comprehended that the bookkeeping data

provided to administration is not the sole reason for administrative choices. Along

with the bookkeeping data, administration mulls over or

weighs different elements concerning real execution.


The essential capacity of administration bookkeeping is to help the administration in

playing out its capacities adequately. The elements of the administration are

arranging, sorting out, coordinating and controlling. Administration bookkeeping makes a difference

in the execution of each of these capacities in the accompanying ways:

(i) Provides information: Management bookkeeping fills in as an essential wellspring of

information for administration arranging. The records and archives are a

storehouse of a tremendous amount of information about the past advance of the

venture, which are an unquestionable requirement for making estimates for what’s to come.

(ii) Modifies information: The bookkeeping information required for administrative choices

is legitimately incorporated and characterized. For instance, buy figures for

distinctive months might be characterized to know add up to buys made

amid every period item astute, provider insightful and region shrewd.

(iii) Analyses and translates information: The bookkeeping information is broke down

genuinely for powerful arranging and basic leadership. For this

reason the information is displayed in a near shape. Proportions are

ascertained and likely patterns are anticipated.

(iv) Serves as a methods for conveying: Management bookkeeping

gives a methods for imparting administration designs upward,

descending and outward through the association. At first, it implies

recognizing the achievability and consistency of the different portions of


the arrangement. At later stages it keeps all gatherings educated about the plans

that have been settled upon and their parts in these plans.

(v) Facilitates control: Management bookkeeping helps in interpreting

given targets and system into determined objectives for fulfillment by a

indicated time and secures compelling achievement of these objectives in

a productive way. This is made conceivable through budgetary

control and standard costing which is a basic piece of administration


(vi) Uses likewise subjective data: Management bookkeeping does

not confine itself to money related information for helping the administration in

basic leadership yet additionally uses such data which may not be

equipped for being measured in money related terms. Such data may

be gathered shape extraordinary overviews, factual gatherings, building

records, and so on.


Administration bookkeeping is worried about introduction of bookkeeping

data in the most helpful path for the administration. Its degree is,

thusly, very tremendous and incorporates inside its overlap all parts of business

operations. Be that as it may, the accompanying territories can properly be recognized as falling

inside the ambit of administration bookkeeping:

(i) Financial Accounting: Management bookkeeping is essentially concerned

with the adjustment of the data gave by money related

bookkeeping. Thus, administration can’t acquire full control and

coordination of operations without a legitimately composed monetary

bookkeeping framework.

(ii) Cost Accounting: Standard costing, negligible costing, opportunity

cost investigation, differential costing and other cost procedures play a

valuable part in operation and control of the business undertaking.

(iii) Revaluation Accounting: This is worried about guaranteeing that capital

is kept up in place in genuine terms and benefit is ascertained with this reality in


(iv) Budgetary Control: This incorporates surrounding of spending plans, correlation of

genuine execution with the planned execution, calculation of

changes, finding of their causes, and so on.

(v) Inventory Control: It incorporates control over stock from the time it is

obtained till its last transfer.

(vi) Statistical Methods: Graphs, diagrams, pictorial introduction, file

numbers and other factual techniques make the data more

noteworthy and coherent.

(vii) Interim Reporting: This incorporates planning of month to month, quarterly,

half-yearly pay explanations and the related reports, income and

reserves stream explanations, scrap reports, and so on.

(viii) Taxation: This incorporates calculation of wage as per the

charge laws, documenting of profits and making charge installments.

(ix) Office Services: This incorporates support of appropriate information preparing

furthermore, other office administration administrations, giving an account of best utilization of

mechanical and electronic gadgets.

(x) Internal Audit: Development of an appropriate inner review framework for inner control.


Administration Accounting gives noteworthy monetary and budgetary information to

the administration and the Management Accountant is the channel through

which this data productively and adequately streams to the administration. The

Administration Accountant has an exceptionally noteworthy part to perform in the establishment, developme

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2 Responses

  1. 2018

    […] Course Code : IGNOU ECO-03 Course Title : Management Theory Assignment Code : ECO-03/TMA/2017-18 Coverage : All Blocks Maximum Marks : 100 Attempt all questions. 1. “Managers are classified on the basis of range of activities for which they are responsible” throw light. Give suitable examples to support your answer. (20) CLICK HERE TO GET ANSWER […]

  2. 2018

    […] Course Code : IGNOU ECO-03 Course Title : Management Theory Assignment Code : ECO-03/TMA/2017-18 Coverage : All Blocks Maximum Marks : 100 Attempt all questions. 1. “Managers are classified on the basis of range of activities for which they are responsible” throw light. Give suitable examples to support your answer. (20) CLICK HERE TO GET ANSWER […]

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