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Management Accounting MA Assignment

   

Added on  2020-06-06

18 Pages4721 Words34 Views
Management Accounting

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1............................................................................................................................................1P2............................................................................................................................................3M1:.........................................................................................................................................5D1...........................................................................................................................................5TASK 2............................................................................................................................................6P3............................................................................................................................................6M2...........................................................................................................................................8D2...........................................................................................................................................9TASK 3............................................................................................................................................9P4............................................................................................................................................9M3.........................................................................................................................................11D3:........................................................................................................................................11TASK 4..........................................................................................................................................11P5..........................................................................................................................................11M4.........................................................................................................................................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14

INTRODUCTIONManagement accounting directs an organisation to achieve desired goals and objectivesthrough providing relevant information related with financial as well as non-financialtransactions happened on daily basis. It plays an important role in analysing business cost andoperations in order to prepare internal financial report such as Profit and loss a/c, Balance sheet,cash flow statement etc. Thus, the management of an organisation are held liable to performthree basic function such as strategic management, performance appraisal and risk reduction.Tech (UK) Limited company which deals in manufacturing special charger for mobile telephoneand other various gadgets is taken for the purpose of preparing this report. The project covers thedescription of management accounting along with their essential requirements in an organisation.There are different management accounting systems and reports which covers and contains allrelevant information regarding making an effective decision (Baldvinsdottir, Mitchell andNørreklit, 2010). Different types of budgets and costing methods which help company inmanaging and controlling cost in future project activities are also covered under this report. TASK 1P1.Definitions:The institute of Certified Management Accountant (CMA) states that the managementaccountant should required to utilise their skills and knowledge in order to prepare andpresent financial reports which assist in making an effective decision and policies inorder to control business operations.American Institute of Certified Public Accountants (AICPA) states the managementaccounting is a practice of management in order to perform three basic function such asstrategic management, performance appraisal and risk reduction in order to achievedesired goals and objectives within pre-determined period of time.Meaning: Management accounting is the presentation of accounting details in such an effectiveway that will help management in formulating policy regarding functioning and operatingbusiness on daily basis. Thus, it helps in providing relevant information through preparing1

accounting reports which shows true and fair financial position of company (Christ and Burritt,2013).Difference between management and financial accountingManagement accountingFinancial Accounting It helps an organisation to achieve competitiveadvantage through utilising relevantinformation provided with the help ofmanagement accounting system.It helps internal as well as external parties toknow the company's actual financial positionso that they can able to take an effectivedecision regarding making investment incompany.It is not yet necessary for company to usemanagement accounting system.It is essentially required for company toprepare financial records on annual basis.It includes information of both financial aswell as non-financial transaction.It includes the information of only financialtransaction that happened in an organisation ondaily basis.There is no specific time to prepare reports asit mainly depends on the needs andrequirements of the organisation.It is prepared at the end of accounting year.It helps internal management to formulate aneffective policies to operate daily businessoperation in an effective and efficient manner.It helps internal as well as external parties tomake an effective decision for their betterment.Importance of management accountingDetermination of aim: As management accounting system provides various financial aswell as non-financial information which help management in setting up new target for eachdepartments on the basis of their capabilities (Cinquini and Tenucci, 2010).Helps in formulation of plans: With the help of information available throughmanagement accounting system, the management are able to prepare an effective decision andplans for the future business activities. It helps management in identifying the skilled andknowledgeable employees and defines their roles and responsibilities accordingly.Measurement of performance: Management accounting system provides the informationregrading the performance of each and every employee which help management in improvingtheir skills and knowledge if any deviation found in their actual and standard performance.2

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