Management Accounting and its Uses for calculating Net Profit

Management Accounting

TABLE OF CONTENTS
Table of Contents.............................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Discussion about management accounting and their essential needs..............................1
P2: Management accounting reporting methods and their types............................................3
TASK 2............................................................................................................................................5
P3: Different costing method uses for calculating net profit for the company......................5
TASK 3..........................................................................................................................................10
P4: Advantage and disadvantages of using various budget..................................................10
TASK 4..........................................................................................................................................13
P5: Comparison of various ways in management accounting uses to deal with financial issues
..............................................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
In the present scenario, it has been seen that management accounting consider as most
valuable aspects for effective decision-making in near future time. An accountant is held
responsible for recording all financial transactions that are being done by the company within an
operating period of time. This project is all about evaluating various types of accounting and
reporting methods that are accurately helpful for an organisation to attain future aims and
objective of an organisation. Although various costing methods is being used by the accountant
is to computer net profit for Zylla company. Apart from this, by the help of advantages and
disadvantages of various types of budgets are also crucial sources to make future decision in
more effective manner. However, comparison of various ways through which management
accounting can be helpful to overcome financial issues those are arises in an organisation (Ward,
2012).
TASK 1
P1: Discussion about management accounting and their essential needs
It seems to be appropriate as well as systematic process for future planning and
controlling all essential operations of an organisation. It used to generate more reliable
information for determining effective plans and actions for effective system of setting reliable
standards in coming period of time. Targeting and reporting variances among strategies and
actual performance for corrective actions are needed to be examine in effective manner before
making any crucial decision making for the company to take corrective actions in near future
time. In this manner that part of management accounting system which facilities reliable process
of decision-making which is known as accurate growth and financial stability for an organisation
(Wickramasinghe and Alawattage, 2012). It consists of every accounting tools and techniques
that can be helpful to administration in discharging their function planning, organising and
controlling their every day operations that are incurred within an organisation.
Definition: It is known as utmost effective terms which is used to describe the accounting
methods, systems and tools that clubbed with particular knowledge and capability that assist
management in their task for increasing gains and reduce losses that are incurred during financial
period of time.
Important of management accounting:
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 Useful in cash forecasting: It has been seen that future forecasting would be done for the
purpose of making overall investments that are made by the company within an
organisation. All resources are needed to be implemented in effective manner by keeping
future in the mind.
 Assist in making or buying decision: This seems to be more economical process which
will be effective for an organisation to develop both operational and planning levels in
effective manner. In this the decision are based on all factors that are related with cost
and production (Pavlatos and Kostakis, 2015).
Comparison:
Basis Financial accounting Management accounting
Nature It is mainly associated with the
historical data as well as records
those are made by the company.
It is associated with overall estimation of
presented data at internal level.
Accounting
standards
This seems to be govern by
GAAP and various conventions.
There is no any bound to follow any kind
of accounting rules and regulations.
Subject matter It happens to be made for
businesses as a whole.
It is formulated for every units and
department at the same time.
Types of management accounting systems:
Cost accounting system: This seems to be appropriate branch of accounting data which
used to record, measure and report data regarding all those costs that are incurred during the time
of production process. The main aim of cost accounting is to ascertain and their use in decision-
making and valuation of performance. There are various types of cost which are to be taken into
consideration such as Standard, Normal and actual costing.
Investment accounting system: It is known as one of the effective assets management of
different securities such as bonds, shares and other securities in respect to meet out particular
investment aim in order to attain maximum benefit for the investors. The portfolios of an
organisation are needed to be taken into account to aid them in meeting their investment
objectives within an accounting period of time (Hall, 2016).
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