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Assignment Management Accounting Systems

Added on - 22 Nov 2020

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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and essential requirements od different types of managementaccounting system.......................................................................................................................1P2 Different methods used for management accounting reporting.............................................3M1 Benefits of management accounting system and their application in organisation context.4D1 Management accounting system and management accounting reporting integrated withinorganisational processes..............................................................................................................4TASK 2............................................................................................................................................5P3 Appropriate techniques of cost analysis to prepare an income statement..............................5M2 Apply a range of management accounting techniques and produce appropriate financialaccounting documents.................................................................................................................8D2 Produce financial reports that accurately apply and interpret data for a range of businessactivities......................................................................................................................................8TASK 3............................................................................................................................................9P3. Advantages and disadvantages of different types of planning tools used for budgetarycontrol.........................................................................................................................................9M3. Analyses the use of planning tools and applications for preparation and forecastingbudgets......................................................................................................................................13P5. Organisations are adapting management accounting systems to respond to financialproblems....................................................................................................................................13D3. Various planning tools to resolve financial problems........................................................16CONCLUSION.............................................................................................................................16REFERENCES..............................................................................................................................17
INTRODUCTIONManagement accounting is the process of producing management accounts and reportsthat provide accurate and timely financial and statistical information which can require bymanagers to decision making process related to day to day activities(Alyousef and Mickan,2016). It is used as management tool which look at the events hat happen in and around abusiness while considering the needs of a business. In the present report selected company,Clarasys Ltd which is London based management consultancy with their sights set on the Unitedstates. It is a truly democratic company and constantly making improvements to the workingenvironment with new desks, divider and poster. In this report consist of different managementaccounting system and different methods of management accounting reports. Apart fromcalculate cost by using appropriate costing techniques and analysis cost to prepare incomestatement. In addition identify different advantages and disadvantage of different types ofplanning tools in budgetary control and selected company compare with other organisation torespond financial problems.TASK 1P1 Management accounting and essential requirements od different types of managementaccounting systemIntroduction to Management AccountingManagement accounting is the process of identifying, measuring, analysing, interpretingand communicating information to managers for the pursuit of an organization's goals. It is alsoknown as cost accounting and managerial accounting which is different from financialaccounting.Difference between management and financial accountingBasisManagement AccountingFinancial AccountingPurposeIt is prepared by accountant forinternal used.It is used foe external reportingprimarily although the managementalso reviews it.RegulationIt is not based on particularregulation and lawIt is presented by company as peraccounting concepts and standards.UsersThe users of this accounting isIts users are shareholders, regulators1
internal managementand investors.Origin, role, principles of management accountingManagement accounting first emerged as a significant activity during the early industryrevolution, in the leading industries and enterprises of the day. As such, management accountingarose after financial accounting, which can trace its origins to its stewardship role in Europeanmerchant trading ventures. Double entry book keeping had been used for more than 300 years bythe time management accounting first emerged as a recognizable field(Armitage, Webb andGlynn, 2016).The management accounting play different role in an organisation as a internal part likeplaning, organising, motivating, coordinating, control, communicate and interpret financialinformation.Principles of management accounting are mentioned which are – Influence(communication provides insight that is influential), Relevance (Providing information isrelevant), value (This principle can show impact on value is analysed) and trust (stewardshipbuilds trust).Different types of management accounting systemManagement accounting system is the internal system of an organization which is used tomeasure and determine it processes for the management of the organization.Cost accounting systemA cost accounting system is a framework which is used by an organisation to determinethe cost of their products regarding to profitability analysis, inventory valuation and cost control.This system mainly used by manufactures to record production activities using a perceptualinventory system. This accounting system mainly designed for producers to track the the flow ofinventory continually through the several level of production. InClarasys Ltd is used by themanagers to keep track record of cost which is faced by them while attend meetings with clients(Bedford and Speklé, 2018).Inventory management systemThe system is used for identifying inventory item that can make products in efficientmanner. InClarasys Ltd followed by this system in order to keep track record of all activitiesrelated to inventory at each level. The company has applied three different types of inventorymanagement system which can apply according to their requirement such as LIFO, FIFO and2
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