Management Accounting Report - doc
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Added on 2020-01-23
Management Accounting Report - doc
Added on 2020-01-23
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Management Accounting
INTRODUCTIONManagement accounting can reveal better ways to grow the organization in way toachieve the targets which have been set by the managers and the owners of the company. Thetechniques of management accounting can be utilized for managing financial sources in a way sothat they can yield best results. Better performance with most efficient outcomes. In anotherwords an entity can use its financial and other non-monetary sources effectively through thebond of the techniques of accounting and management(Kaplan and Atkinson, 2015). Agmet is anUK based medium sized enterprise which is dealing in the manufacturing of chemical products.As it is a medium sized entity hence it has less financial resources in comparison to other bigenterprise as a result it requires to get sufficient returns from such available bases. Formation ofstrategies and implementing them in execution of plans is the only way to exploit the availableopportunity for cited entity.TASK 11 Explain the principles of management accounting (MA) and its significanceMA tools and techniques are highly significant which business unit can undertake tomanage the activities of it so that it can achieve its objectives without any difficulty anddisturbance (Macintosh and Quattrone, 2010). Some principles of management accounting aredefined below:Principle of causality: this principle deals with need of cause and effect Principle of analogy: which in actual deals with casual insights of the managementBoth the above mentioned principles serving management accountant and the users ofmanagement accounting system for instance stakeholders hence these principles can beconsidered as milestone. Both the afore mentioned principles are formed and incorporated in
managerial costing conceptual framework (Baldvinsdottir, Mitchell and Nørreklit, 2010). Theseprinciples consist of managerial decision. It is very important to incorporate such accountingprinciples in management activities as managers and leaders of Agmet because they require tomake such decisions so that they can easily frame such strategies through forecasting and othertechniques of cost accounting in which they can clearly estimate that how much they have tospend for getting their required returns. In other words, they require better facts and figuresthrough which they can draft a report which can be relied upon. As without any principle orfoundation the statements produced cannot be regarded as credible hence to enhance thecredibility of such statements which contains data related with managerial accounting decisions.The principles of management brings integrity and efficiency in the management and its process.Through which it can be said that managerial processes can yield effective and profitable results. As far as methods designed to carry out these activities they are also designed in away sothat they can support these principles. Managers requires to take various decision some of themrequires to have a glance over the facts and figures of financial statements so that they can getthe data contained in them.Benefits of management accounting systemThere can be several benefits which can be derived out of use of tools and techniques ofmanagement accounting such benefits are described below:Reduce expenses: The methods of management accounting can assist Agmet to reduceand control over the expenditure over the operations of entity. As the cited enterprise is asmall business enterprise hence it can be said that they are having less available fundshence they are required to control their financial and non financial sources so that theycan earn effective revenue by applying less finance in operating and non operatingactivitiesImprovement in cash flow: it can also control and improve the level of cash flow. Asthese are controlled through budgetary control methods which be taken as a roadmapwhich can be used by managers to improve its cash inflow and to reduce its cash outflowso that there can be availability of required amount of cash when owners require it. Cashflow from each and every business activity can be improved through applying thetechniques of management accounting and business managerial principles.
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