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Analysis of using management accounting techniques

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Added on  2020-06-04

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By this, the latest data will be available and this will help in carrying out the functions in such a way that yield business maximum returns (Nandan, 2010).

Analysis of using management accounting techniques

   Added on 2020-06-04

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Management Accounting
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Importance and functions of management accounting.....................................................1P2. Various systems used in management accounting...........................................................3M1: Advantages of using management accounting system...................................................5TASK 2............................................................................................................................................5P3. Income statement by marginal and absorption costing....................................................5M2: Analysis of management accounting techniques............................................................9TASK 3............................................................................................................................................9P4. Budgets and their merits and demerits.............................................................................9M3: Analysis of using planning tools...................................................................................11TASK 4..........................................................................................................................................12P5. Balance scorecard approach...........................................................................................12M4:Analysis of financial issues............................................................................................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
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INTRODUCTIONManagement accounting is a process in which various operations are performed so thataccounts of organisation can be maintained in the most appropriate manner. This will beincluding collection, recording, analysis and many other measures (Macintosh and Quattrone,2010). By the help of it, all aspects which are related to finance will be considered. In this report,various types of accounting and reporting are discussed. The use of costing methods in order todetermine net profit for the company is examine. Advantages and disadvantage of using planningtools in budgetary control process are discuss under this project. The measure used to solvefinancial issues are explain by using various techniques. All of these shall be undertaken withreference to Imda Tech where budgetary control and manner of solving problems that arise inbusiness are also explained. TASK 1P1. Importance and functions of management accountingIn any business, there are various functions which are to be performed by them so thatcompany can enhance its value. So, all the processes that are taken to manage them are includedin management accounting. As the conduction of business will require different information so,it is necessary to collect it in an appropriate manner and on time. For this purpose, various toolscan be utilised but most commonly used is systems which are there for management accounting.There are several policies that are to be followed so that everything is done in the best possiblemanner. As this information will be used for making relevant decisions, so, it is needed that allthe modifications which are taking place in environment shall be incorporated. By this, the latestdata will be available and this will help in carrying out the functions in such a way that yieldbusiness maximum returns (Nandan, 2010). In addition to this, financial accounting is also usedin which only those matters which are related to finance will be included. In order to understandthe difference between management and financial accounting in an appropriate manner, acomparison is made which is provided here as under:Basis Financial accounting Management accounting Reason The main reason for whichfinancial accounting isundertaken is to make allManagers in business need datafor performing different actionsand that is made possible with the
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financial statements as allpersons use them for variouspurposes.help of it. Type of data Information which is related tofinancial aspects will only becovered here.In this all the data related to anytransaction shall be taken intoaccount.Format Authorities have specified aproper format in which recordingis required to be made.Under this, all the data shall beincorporated in accounts in amanner as no specific format hasbeen established.Legal requirementVarious laws and regulationsdefine the need for financialaccounts and so, they arerequired to be madecompulsorily.They shall be made according toperception of organisation as nocompulsory rule is provided inrespect of it.Duration For them, a period is mentionedfor which preparation is to bedone and that is generally forone financial year.The duration for which it shall bedone is not fixed and can beundertaken for any period.Importance of management accounting In the process of decision making, there is need to maintain all the accounts and for that,management accounting is the best tool that can be used. All the actions which are performedcan be made in accordance with the pre decided structure and this will enhance the effectivenessand efficiency of business as there will be no obstacles which will have to be faced by them. Bythis, there are many benefits which are attained by Imda Tech and some of them are explained asbelow:Cost is the most important factor and it is needed that it shall be controlled properly. So,by the use of this, all costs which are not required but incurred and no additional benefitis received due to them shall be identified. After this, such steps are undertaken by whichthey will be avoided and cost with respect of them is saved.
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