What are the advantages and dis advantages of management accounting?
I’m assuming you’re talking about manegerial accounting such as variance analysis, cost accounting, make or buy decisions, etc. The advantages are it allows managers to have a better understanding of their business operations, what areas are running efficiently, what areas need improvement. It also allows managers to make informed decisions about how to price the goods they want to sell, when is the best time to reorder stock, and what capital investments would benefit the business most. The disadvantages are that it’s very subjective and often requires an element of estimation. If actual performance does not closely match management’s estimation, this could negatively impact the company. Also, there are fewer hard and fast rules and methods than with GAAP accounting, so skills are not necessarily transferable from one company or industry to another.
