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CA Intermediate · Cost and Management Accounting · Introduction to Cost and Management Accounting

Which of the following is a feature of management accounting, as distinguished from cost accounting, in the ICAI study material?

Management accounting uses both financial and non-financial information and mainly supports managerial decisions such as planning and control. It is not bound by statutory formats, is not limited to ascertaining product cost, and involves forecasting rather than only historical data.

  1. AIt is governed by statutory requirements regarding the form of records
  2. BIt uses both financial and non-financial information, with a primary focus on supporting managerial decisionsCorrect
  3. CIt is concerned only with ascertaining the cost of products
  4. DIt deals only with historical data and does not involve forecasting

Explanation

Management accounting draws on financial and non-financial information to help management in planning, control and decision making, and it is forward-looking. It is not bound by statutory formats, is wider than cost ascertainment, and does use projections and forecasts, so the other options are incorrect.

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