managerial accounting

Definition

Internal accounting focused on providing information for management decisions rather than external reporting. Unlike financial accounting's rigid rules, managerial accounting embraces whatever analysis helps executives decide which division to blame for poor performance.

Example Usage

The managerial accounting report showed that the profitable division was actually subsidizing three money-losing ones through allocated costs nobody understood.

Origin

Emerged as a distinct discipline in the early 20th century as businesses grew complex enough to need internal performance measurement.

Fun Fact

Managerial accounting isn't bound by GAAP, which means creativity is encouraged—though 'encouraged' and 'legally defensible' are different concepts.

Source: Management accounting fundamentals

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reimburse

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rollover risk

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