Decision Making In Managerial Accounting Essay

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Decision Making in Managerial Accounting
Decisions are conclusions made by mangers after long cautious thoughts and happen when answers to problems are chosen for discharge. Options here have to be more than one to enable managers to choose between them, hence, making decisions. Managers of an organization make decisions based on financial statements, since the information contained in financial accounting reveals what has already taken place and what is going on in the organization (Socea, 2012). Managers also predict the future of an organization by reporting that future in the current date. According to Socea (2012), managerial accountants use the financial accounting data that is appropriate, dependable, and comparable. According to Breuer, …show more content…

An organization will succeed if its mangers are able interpret data provided by management accounting since they will be able to respond to competition and other challenges faced in the business environment that they operate in as pointed out by Socea (2012) in his article. Management accounting is used to make decisions within the organization and, therefore, not published to the public like financial accounting information. According to Socea (2012), the way managerial accountants approach or structure a business problem determines the resolution that they will finally come up with, meaning that wrong approaches can lead into a major financial …show more content…

According to Shabbir et al. (2014), decision making and management of conflicts play a big role in business entities and without prudent decisions, the entities are bound to fail. Conflict comes as a result of not agreeing between persons, and managing them requires managers to have the required skills, which, unfortunately, most managers do not possess. This argument is supported by Ejimambo (2015) who assert that prudent decision making is key in any organization that would want to continue operating in the future because managers will continuously face challenges of selecting the best option from various alternatives in order to come up with the required solutions to problems of the business

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