Accounting for Decision Making

Accounting for Decision Making

Decision making. Correct decision making is crucial to the success of a business. Management accounting has certain special techniques which help management in short term and long term decisions. For example, techniques like marginal costing, differential costing, discounted cash flow, etc,. help in decision such as pricing of products, make or but, discontinuance of a product line, capital expenditure.

Tools and Techniques used in Management Accounting

Management accounting uses a number of tools and techniques to help management in achieving business goals. Some of the important tools and techniques for the Accounting Equations are as follows:

1. Budgeting

2. Standard costing and variance analysis.

3. Marginal costing and cost volume profit analysis.

4. Ratio analysis.

5. Comparative financial statements.

6. Differential cost analysis.

7. Funds flow statements.

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