MANAGEMENT ACCOUNTING INTRODUCTION 1 TASK 11 P1 (a) Introduction

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 (a) (i) Describe management accounting and how it is differentiate from financial
accounting ..............................................................................................................................1
(ii) Importance of management accounting ...........................................................................2
(b) Examine the types of management accounting system ...................................................2
TASK 2............................................................................................................................................3
P3 (i)Income statement under marginal costing ....................................................................3
(ii) Income statement under absorption costing.....................................................................4
TASK 3............................................................................................................................................5
P4 (i)Different types of budgets and their advantages and disadvantages ............................5
(ii) Process of preparing budgets............................................................................................6
(iii) What are pricing strategics..............................................................................................6
TASK 4 ...........................................................................................................................................7
P5 (i) What is balance scorecard and how it is useful in respond to financial problems.......7
(ii) How balance scorecard can be used to improve financial development of effective
strategies.................................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Management accounting is an activity of interpretation, analysing, communicating,
identifying and measuring in order to achieve organisational goals. This is also known as cost
accounting. It is the process managing financial reports and accounts that is able to provide
accurate and correct information and data. Managerial accounting is also helpful in making short
term or as well as day to day organisational operational. It provides annual budgets and income
& balance sheet statement, so that mangers can easily analysis their financial position and
performance in capital market (Briciu, Groza and Ganfalean, 2009). Basically these reports are
useful in showing sales revenue,capital expenditure,amount of order in hand, accounts receivable
and accounts payable, the statement are useful of internal analysis of the business organisation.
Managers can easily assessed their internal and external issues by which the behaviour of the
employees are effected. Management accounting and financial accpunti9ng bothy are the
essential tool of a commercial industries.
TASK 1
P1 (a) (i) Describe management accounting and how it is differentiate from financial accounting
Management accounting is the combination of finance, management and accounting by
which business techniques and skills added real value to any organisation. Management
accountant uses content of all types, not only just financial but also it inform and lead company's
strategy and able to drive sustainable growth (Zang, 2011). It works in all types of business
sectors, public as well as private sectors. It is helpful in managers in order to take financial and
non financial decision, and gives proper knowledge of how much money can be spent on sales
and how much its revenue.
Distinguish between management accounting and financial accounting:-
 Management accounting is helpful in providing day to day or short term financial
decision, and its is relates with only internal environment. Although financial accounting
provides long term and annually year plans and strategics and it relates with external as
well as internal environment of Imda Tech limited.
 Management accounting collate content regarding sales revenue, outstanding debts and
cash flow that produces timely reports and statements to inform about the daily activities
to the mangers (Michalski, 2012.). Financial accounting is accommodating in preparing
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reports that are generally based on past experience, by using this managers can easily
take financial decisions for the future.
 Management accounting is combines both financial and non financial information content
to draw a complete image of the organisation. It can be utilize to drive business success.
Financial management is the process of financial data only that can be used by other
functions of the organisation for example :- department managers.
(ii) Importance of management accounting
Management accounting is helpful to managers to assessed the internal and the external
environment of the organisation, that helps to identifies the issues and challenges of the
organisation. It reduces the chance risk and uncertainty by evaluate the market competitors. It is
fornicating of products as well as company financial profile in capital market (Bebbington,
Unerman and O'Dwyer, 2014). It gives accurate and aggregate information about divisions,
plants, products, operations, tasks and individual activities.
(b) Examine the types of management accounting system
The types of management accounting are as follows:- Cost accounting system – Cost accounting system is also called costing system. It is a
procedure to collecting, classifying, analysing, evaluating and allocating the various
methods control of costs and course of action. It main aim is to give suggestion to the
management regarding cost of the product and services, and tries to spent less money in
manufacturing process (Dechow, Myers and Shakespeare, 2010). It is usually used in
financial accounting, but it is primary element that can be used by mangers of Imda Tech
limited, in order to facilitate decision making process. All the kind of business such as
trading, manufacturing, and service requires the cost accounting that helps into track their
business. Inventory management system :- The system is helpful manages the overall inventory of
the company. It gives accurate advices to mangers, how much stock is to be keep in
business, how much is going to bes usages in production. It main goals to reduces
wastages and making production profitable. It focusses on how to provide good quality
products to the customers by reducing cost of production. Job costing system :- Job costing system is the part of cost accounting system. It is
assigning production costs for and individual products or services or may the bunch of
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