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P1: Management accounting along with its essential requirements

   

Added on  2021-02-19

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Management Accounting
P1: Management accounting along with its essential requirements_1
Table of ContentsINTRODUCTION...........................................................................................................................1P1: Management accounting along with its essential requirements............................................1P2: Different methods for management accounting reporting....................................................3M1 Benefits of management accounting system.........................................................................4D1 Management accounting system and reporting integrated with each other...........................5TASK 2............................................................................................................................................6P3: Different costing methods.....................................................................................................6M2. Management accounting techniques for preparation of financial reporting documents......9D2. Interpretation of income statements......................................................................................9TASK 3..........................................................................................................................................10P4. Advantages and disadvantages of planning tools used for budgetary control:....................10M3. Uses of various planning tools and their application for preparing and estimating budgets:....................................................................................................................................................11TASK 4..........................................................................................................................................12P5. Adoption of management accounting system to respond the financial problems:..............12M4. Responding to financial problems, management accounting to sustainable success:........14D3 Planning tools for accounting period to respond financial problems appropriately:...........14CONCLUSION..............................................................................................................................14
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INTRODUCTIONIn any business organisation, there is a requirement to implement a managementaccounting system which helps the company in managing its operations effectively andefficiently. It is also know as cost accounting which assist the company in identifying,measuring, analysing, interpreting and communicating information to mangers for achieving anentity's goals. For better understanding of management accounting, company named NEROLTD is chosen which is operated in manufacturing sector. This report divides in four tasks, firsttask explains the term management accounting system and describe its essential types. Secondtask describes uses of various appropriate cost accounting techniques for preparation of incomestatement. Third task describes the various planning tools used in cost accounting system and itsadvantages and disadvantages whereas fourth task provides the comparison betweenorganisations in adoption of this system and their responses to various financial problems. P1: Management accounting along with its essential requirementsManagement accounting relates with the internal management which considered non-monetary as well as monetary information that helps to take an effective decision for theorganisation. It plays an crucial by making effective plans that increases the productivity of theorganisation. In these some of effective management accounting system that executed by NeroLimited as follow: Cost accounting system- The cost accounting system is implemented by Nero limited tomonitor the cost that is incurred while performing their daily activities. For this they record therevenue, profits and cost that is record and manage by the organisation. In most of theorganisation finance department adopted this method because it refines the data and turn it intomeaningful information. Like the production cost measures the profitability of the organisation
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through recording the data that is managed by them. In context of Nero limited this helps anorganisation to find the production and service cost of the organisation. Price optimization system- This system helps an organisation to determine the cost orprice of products or services that is offer by them in the market to their customers. Priceoptimization system is beneficial for Nero limited because it helps them to ensure the futureprofitability for an organisation. Most of the organisation adopt this method for decide the priceof their products that is accepted by its stakeholders such as customer and employees. Alongwith this it also helps them to achieve their objective effectively. Job costing system- This accounting system plays an crucial role in the organisation as itidentify the cost of each unit on individual bases. Job order costing system provide more benefitsto those organisation which provides large number of products to their customers. In the contextof Nero limited finance manager measure or evaluate the cost that is earned by them from eachunit by making the estimation for different cost. Along with this it is also essential for theorganisation to measure their cost for each product or unit which helps them to add the marginwhich is useful for organisation to complete their goals with approaching them through positiveforces. Inventory management system:This system refer to the process that helps anorganisation to complete their goals with maintaining proper inventory. Moreover inventorymanagement system helps them to monitor regular and current stock that is required by them tocomplete their daily activities. It determines that inventory plays an crucial role in theorganisation because mismanagement of inventory creates problems for organisation byincreasing their cost and waste of raw materials. Like Nero limited executed this system in orderto provide fast services to their customers. Along with this it also helps them to gain competitiveedge from their rivals. ParticularFinancial accounting Management accounting DefinitionFinancial accounting refers to thataccounting system which preparethe financial accounts or statementfor an organisation. The major ofthis is to provide essentialManagement accounting systemprovides relevant information in alldepartments of the organisation. Ithelps them to develop effectiveplans and policy for the
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