Question

List the four steps in short-term decision making. At which step are managerial accountants most involved?

Short answer

The managerial accountants are involved during the time of collecting the appropriate information which are processed for thedecision-making purposes.

Step-by-step solution

Definition of Managerial Accounting

Managerial accounting is that branch of accounting that collects and communicates internal information with the managers for strategies, policy development, and decision-making.

Steps in making short-term decisions 

The following steps are involved in making short-term decisions:

1. The initial step of the decision-making process is theassessment of business goals that are to be achieved by the business entity.
2. After the identification of business goals, associated course of action and alternatives are ascertained by the administration that suits thebusiness operations.
3. The collection of relevant information linked with the business goals’ accomplishment process, is another step ofshort-term decision making.
4. In the end, the best usefulalternative is chosen by the managers andimplemented to accomplish the predetermined goals.

The involvement of managerial accountants is most in the third step, i.e., at the time of gathering the relevant data for drafting effective and efficient decisions.