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Aspect of Management Accounting

   

Added on  2021-02-18

18 Pages3831 Words117 Views
MANAGEMENTACCOUNTING

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INTRODUCTIONThe MA is a kind of accounting which is associated with process of recording monetaryand non monetary activities of a business in a systematic way (Zarzycka, Dobroszek, Circa andAlmasan, 2017). Main purpose of recording these transactions is to prepare internal reportswhich are essential for management department of companies. In current scenario, the role ofthis accounting is becoming wider because it includes different accounting systems and reportsthat play a significant part in activities of business. In report, variety of MAS and MA techniquesare demonstrated. As well as types of planning tools and role of MA in order to sort financialproblems are also mentioned. For better understanding of these aspects of MA PC clothinglimited company is chosen which is located at London, United Kingdom. The organisation dealsin manufacturing of vital range of cloths. TASK 1P1. Management accounting and its types.The MA is a way of collecting and analysing monetary and non monetary information forproducing internal report. Functions of management accounting systems - Provide data – This is key function of management accounting that is related to gatheringall kind of data that occurs in businesses due to transaction.Modify data – Another function of this accounting is to modifying the gathered data. Inother words, ignoring those information which is not linked with business activities. Analyse and interprets data – In the management accounting, modified data is being usedto produce reports and statements which is being interpreted to take important decisions(Evans and Tucker, 2015).Qualitative and quantitative information- Under this accounting systems, qualitative andquantitative information is included that are beneficial for companies in making plans &policies.Various kind of accounting systems -

Financial accounting system – This is a systematic process of analysing financialtransaction of a business in order to prepare different financial statements. The preparedfinancial statements are being presented to internal and external stakeholders. In thisaccounting system, it is necessary to conduct auditing of all produced financialstatements so that their efficiency can be evaluated. In the above selected company, theiraccountant prepare financial statements which are audited by auditor as per thisaccounting. For example PC clothing company prepare the income statements to evaluatetheir profitability and loss in end of year as accordance of this accounting. Cost accounting system – This is a process of projection of futuristic cost and allocatingfunds accordingly (Cohen, Karatzimas and Naoum, 2015). It helps to finance departmentbecause they need it for proper use of available financial resources in a better way. Thus,it is essentially needed in companies for controlling and reducing expenditure of differentkind of activities. For example in, PC clothing limited they are using this accountingsystem for minimising the overall cost of activities and operations of clothing production.Management accounting system – This is an accounting system which assists companies’financial information and create reports for managers to take decisions. It is needed forsupporting in decision-making. It is so because prepared reports consist monetary andnon monetary information that are needed by managers. Like in above company, theMAS supports them in taking decision about different activities and operations regards tocloth manufacturing. For example use of price optimisation system of managementaccounting leads to effectively price setting.Tax accounting system – It is an accounting whose main objective is to managing overalltaxation activities. In this accounting, it is essential that companies must followprescribed rules and regulations when computing tax return. For example, there areinternational taxations rules which are essential for companies to apply in process ofcalculating tax rate. As well as the PC clothing limited computes tax at the end of year byhelp of this accounting. P2. Different methods used for management accounting reporting.MA reporting – It can be defined as a process of preparing internal reports in order tohelp board of directors in decision-making.

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