Assignment Management Accounting- Doc
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Added on 2020-01-28
Assignment Management Accounting- Doc
Added on 2020-01-28
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AssignmentManagement AccountingStudent name:Student ID:College Name:College ID:1
Table of contentIntroduction......................................................................................................................................3Overview of the company................................................................................................................3Task 1: a) Functions of management accounting (P1)....................................................................3i) Definition of management accounting and the differences between the management accountingand financial accounting..................................................................................................................3ii) Role of management accounting to create some effective decisions in the organisation...........5b) Types of management accounting system and the process that should be followed by theorganisations to improve their financial report (P2)........................................................................6Task 2...............................................................................................................................................7Presentation of Income Statement for the month of September using absorption costing..............7Task 3: Preparation of different types of budgets [P4]....................................................................9i) The advantages and disadvantages of different types of budgets................................................9ii) The process that should be followed by the Company to prepare such budgets.......................11iii) The strategies that should be adopt by the Company to set the price......................................11Task 4: Use of balance scorecard to improve the financial condition of the organization [P5]....12I) Use of balance scorecard to solve the financial problems.........................................................12II) Implementation of Balanced scorecard can deliver a range of financial and non financialperformance measures...................................................................................................................12Conclusion.....................................................................................................................................14Reference list:................................................................................................................................152
Introduction Business organisations do their business activities both in the internal and external environment.Therefore, organisations have to prepare some strategies to achieve the objectives in bothinternal and external environment. Basically, Organisations do their business activities to achievetwo major objectives the first one is profit maximization and the second one is wealthmaximization. Organisations have to conduct a good accounting system in the organisationculture to achieve the profit maximization objective because financial accounting system has adirect relationship with the profit of the organizations (Renz, 2016, p.209). As a good accountingsystem keep all the records of the cost of activities of the organisation therefore,organisationshave to be depended on the accounting system to get the relevant information about theexpenditure of the organisation. The information provided by the accounting system also help theorganisation to prepare some strategies to reduces the cost of business activities and increase thegeneration revenues from the activities. In this way accounting system help the organisations toincrease the differences between the revenue and expenditure to maximize the profit. The mainfocus of the following thesis is to interpret the importance of the management accounting systemin the organisations which is a vital part of accounting system. Overview of the company The following study also focus on the accounting system of IMDA tech (UK) limited which is awell known company for manufacturing special chargers of mobiles, telephones and other carry-on gadgets. Company successfully generates their profit for the last few years but in the annualmeeting some of the department managers had some complaints about the accuracy of thefinancial information system of the company. The managers cannot get the detail informationabout the financial performance of the company. Company tries to include the managementaccounting system in their accounting system to increase the accuracy of the financialinformation system in the organisation. Task 1: a) Functions of management accounting (P1) i) Definition of management accounting and the differences between themanagement accounting and financial accounting Management accounting system help the organisations by providing some devices that can beused to take some effective decisions, planning for the business activities, measuring theperformance of different business activities and management, preparing some financial report tocontrol the cost of the business activities, formulation and implementation of some strategies toincrease the efficiency of the business activities (Otley and Emmanuel, 2013, p.304). As3
management accounting system is a part of the financial accounting system therefore, there aresome major differences between the financial accounting system and management accountingsystem. The differences are as follows:Points of differencesManagement accounting Financial accounting Users ofaccountinginformationBasically, Management accountantprepare the statements forproviding information to theinternal stakeholders of theorganisation such as managers,board of directors and employees.Where financial accounting system preparethe financial statements for providingfinancial information to the externalstakeholders such as Investors, preferenceshareholders, financial institutions,government etc. Use of lawand StandardsThere are no requirements of lawsand standards in the Managementaccounting system. Managementaccountant can use any format andstandards to prepare thestatements. The financial accountant has to followsome specific law and standards such asinternational accounting standards toprepare the financial statements to revealthe financial performance of the company. ScopeThe scope of the managementaccounting in the Company is verynarrow because it can beconducted to measure theperformance of a particularbusiness activity.Where the scope of the financialaccounting is very broad because thefinancial statements prepared by theaccountant is measure the financialperformance of the entire Company. FunctionsThe major functions of themanagement accounting are tohelp the company in decisionmaking and measure theperformance of a particularactivity. But the financial accounting preparedifferent financial statements such asIncome statement, profit and lossstatement, Balance sheet etc to disclose thefinancial status of the company to theinvestors for attracting more investments inthe Company. Schedule toprepare thestatementManagement accountant canprepare the statements on thedaily, weekly and monthly basis toreveal the performance of differentbusiness activities. But Financial accountant prepare theincome statements, profit and lossstatement quarterly and annually andprepare the financial statements annually toreveal the annual financial performance ofthe company. 4
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