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Assignment- Management Accounting System

Added on - 23 Nov 2020

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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Discussion about management accounting and their essential requirements.......................1M1: Benefits of management accounting system.......................................................................3P2: Different types of management reporting...........................................................................4D1: Critical evaluation of accounting system reporting.............................................................5TASK 2............................................................................................................................................6P3: Various types of costing techniques that are use for calculating net income.......................6M2: Various types of management accounting techniques.........................................................9D2: Critical analyse of data collected from income statements................................................10TASK 3..........................................................................................................................................10P4: Merit and demerits of using planning tools use in budgets................................................10M3: Analysis of use planning tools...........................................................................................12D3: Critical evaluation to reduce financial issues.....................................................................12TASK 4..........................................................................................................................................12P5: Effective use of accounting system to resolve financial problem.....................................12M4: Analysis of financial problem...........................................................................................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONAccounting is a systematic process of identify, recording, summarising and interpretingfinancial data in effective manner. While management is held responsible for provide allnecessary requirements or support to financial accountants in respect to make better report duringan accounting period of time. The major objectives of doing so is to attain more benefits throughproper utilisation of resources of an organisation. It reveals profit or loss for providing specificvalue of nature of firms assets, liabilities and companies owners. This consists of at least tworecording entries for all essential transaction that are done in a financial period of time.This particular report is providing crucial information about accounting and reportingmethods those are useful for evaluating financial transactions in proper manner. Calculation ofnet profit through using various costing method. Merits and demerits of various planning toolshelpful for budgets control. However, analysis of financial issues those are being arises in anorganisations are done by making comparison among other companies. Further, some financialtools are used to deal with all issues that are present at internal level (Wickramasinghe andAlawattage, 2012).TASK 1P1: Discussion about management accounting and their essential requirementsNowadays, it has been determine the management of every companies are alwayslooking to have a well effective accounting systems that are assist them to record their every dayfinancial transactions that occur during the period of time. The main aim of finance managers isto attain organisation aims and objectives that are always be helpful to make future planning toincrease growth and profitability for longer period. There are various sources from which datacan be collected that are always helpful for companies like Rowlinson Knitwear (Lavia Lópezand Hiebl, 2014).Management accounting is said to be continuous improvement process which is aid toplanning, formulating, measuring and operating both financial and non-financial data of anorganisation. It used to motivate behaviour and support or create cultural values which isnecessary to attain an organisations strategies and operational objectives within financialdepartments. The main trust of this term is towards crucial policy and developing plan to attaindesired objectives of management. It assist administration in planning and analysing the1
performance of an organisation in respect to follow right directions of regular improvements. Itwould utilises the principles and practices of financial accounting in addition to other modernmanagement tools for effective operations of an organisation's.Definition:According to the “IMA”, Management accounting is said to be an importantprofession that consists of pertaining in management decision-making, planning and performancemanagement system and providing valuable reporting and assistance to management in nearfuture time (Akbar, 2010).Role and principles of management accounting system:Designing and compiling: It is known as accounting information, record and otherevidences of past that should be designed and complied to meet the requirements ofspecific business and financial issues.Management by exception: This principles of administration through exceptions whichis being followed in presenting information to an organisation. The unfavourabledeviations that alone are informed precisely to management.Control at sources accounting: Cost are said to be an essential controlled at the point atwhich they incurred during the period of time. The performances of individual workers,details of material issues and proper utilisation of various resources of RowlinsonKnitwear (Leitner, 2013).Management AccountingFinancial AccountingIt used to provides information to an individualwithin an organisation.It is mainly for external parties such asinvestors and shareholder.In this case there is no need to follow any kindof rules and laws.While preparing any kind of reportingaccountant need to follow certain kind of laws.It occurs with particular products and costscentres during an accounting period of time.Financial accounting covers entireorganisations.It used to record historical and forward lookingaspects of an organisation.It is mainly an historical record during afinancial period of time.Types of management accounting system:Cost-accounting systems: It is known as accounting comprises of various methods foranalysing the cost of effective products, processes and program. In order to study the close costs2
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