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Concept of Management Accounting and there Importance | Report

Added on - 05 Feb 2020

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Management Accounting
Table of ContentsINTRODUCTION........................................................................................................................................3TASK 1.........................................................................................................................................................3a) Definition of management accounting and difference between management accounting fromfinancial accounting.................................................................................................................................3b) Importance of management accounting information as a decision making tool.................................5c) Types of management accounting system...........................................................................................5TASK 2........................................................................................................................................................61. Absorption Costing..............................................................................................................................62. Marginal Costing Method....................................................................................................................7TASK 3.........................................................................................................................................................8a) Types of budget and there advantage/ disadvantages..........................................................................8b) Process of preparing budgets...............................................................................................................9TASK 4.......................................................................................................................................................101. Explain balance scorecard and how it can be implemented can deliver a range of performancemeasure..................................................................................................................................................10CONCLUSION..........................................................................................................................................11REFERENCES...........................................................................................................................................12
INTRODUCTIONManagement accounting is a process which helps that managers to manage all the managerialfunction that help the organization to accomplish there goals. In management accounting it includes allthe managerial functions such as planning, organizing, staffing and controlling all the activities whichcan make smoothing in all organisational activity(Wajeetongratana, 2016). It also help to conduct moreeffectively which can help by the effective management accounting. In this way management accountingis a life blood of any organisation to run there business more effectively and efficiently. In this researchreport, it describes the Imda Tech (UK) Limited, who are the producer of the special charger for mobileand telephone and it also creates different gadgets for retail outlets in the UK.In this research report, it describes the concept of management accounting and there importance,and it also make the comparison between the management accounting and financial accounting. It alsodescribes the importance of management accounting information as a decision making tools in adepartment for a department managers. It also explain the different management accounting systems thathelps the departments to make there reports. It also describes the different type to budget and thereadvantages and disadvantages, process which enable to prepare a budgets and the pricing strategies of anorganisation. In this report it analysis the financial problems and improvement which are essential insolving the financial problems in an organisation.TASK 1a) Definition of management accounting and difference between management accounting from financialaccountingTo: Imda Limited, Line ManagerFrom: Management Accounting OfficerDate: 17 May 2017Subject: Management accounting meaning and its difference from the financial accountingManagement accounting includes the various strategies such as identifying, analysing, recordingand presenting the financial information which is used to making an effective planning, decision andmaking an effective control in an organisation process(Vosselman, 2014). Management accounting alsoincreases the efficiency of an organisation, it also supplies the accounting facts and information and it isconcerned with forecasting of various information.Difference between Financial and Management AccountingBasis for ComparisonFinancial AccountingManagement AccountingMeaningFinancial accounting is aManagement accounting includes
accounting process whichincludes the preparation ofaccounting statements whichprovide sufficient information ofthe organisation. For example:Income Statements, Balancesheet, Cash Flow Statements etc.all the managerial informationwhich helps the mangers to makethe policies, plan and strategiesfor effective running of thebusiness activity. For example:Department related information,Cash flow of the business.Is It compulsory or not?Financial accounting is necessaryfor an organisation. For example:To analysis the company'sfinancial position, incomestatements and balance sheet arerequired.Management accounting is notnecessary in an organisation,because it is essential for framinga policies,l plans and strategieswhich is related to theorganisation.InformationIn financial accounting, allmonetary information arerequired in it(Suomala, Lyly-Yrjänäinen and Lukka, 2014).For example, while making anincome statements it is essentialto make a complete records of allthe income and expenses whichare in monetary term.In management accounting, itrequired all the monetary andnon- monetary information for anorganisation. For example, inmonetary it includes all therecords of income andexpenditure and in non- monetaryit includes all the activities suchas employee and labour numbers,past performance etc.ObjectiveThere main objective is to givefinancial information to theinterested parties, for examples:Shareholders, Govt.To help the organisation to makean effective planning anddecision making process for anorganisation.FormateIn financial accounting thereformat will be specified such asbalance sheet, profit & loss a/cetc.In this there are not a specialisedformat for an organisation.Time frameFinancial accounting are requiredat the end of the accountingIn this reports are preparedwhenever there will be the need
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