Management Accounting

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
TASK 2............................................................................................................................................7
TASK 3..........................................................................................................................................10
TASK 4..........................................................................................................................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
APPENDIX....................................................................................................................................17

INTRODUCTION
The term MA is an accounting process that is linked with a systematic way of analysing
and collecting information regards to monetary & non monetary aspects (Weygandt, Kimmel and
Kieso, 2015). The main purpose of this accounting is to produce internal reports by utilising
gathered information. The key aim of this project report is to describing information regards to
MA and its role in companies operations. The project report is based on a UK based company
that is “Imperial brands”. The company is involved in process of manufacturing of tobacco
products and its headquarter is at Bristol, United Kingdom. The project report covers about
different kind of MAS, MA reports as well as about vital range of planning tools. The further
part of project report includes about role of MA in order to sort out monetary issues of
companies.
MAIN BODY
TASK 1
Role of MA and types of MAS.
MA- As above stated, this can be defined as a kind of accounting system that is aligned with a
process of controlling companies qualitative and quantitative aspects by help of internal reports.
The purpose of applying this accounting system is to manage internal aspects of business
entities. Below some role of MA are mentioned that are as follows :
 Beneficial in planning- The MA is useful for companies in order to make effective
planning of various kind of activities (Derchi, Burkert and Oyon, 2013). It becomes
possible because under this accounting estimation of futuristic income and expenditures
is done that helps in better planning. Like in above company, their manager makes
planning of their manufacturing activities by help of this accounting.
 Beneficial in controlling- It is essential for companies to control their different kind of
activities specially to financial activities. It is so because in the absence of control over
financial activities, this may lead to many issues. In above Imperial brands company,
their managers control and allocate financial resources by help of this accounting.
 Benefits in decision making- In addition, the MA is useful for companies in order to take
corrective actions and decisions so that higher growth can be achieved. Such as the

manager of above Imperial brands company, takes suitable decisions by help of this
accounting regards to monetary and non monetary aspects.
Comparison of MA and financial accounting :
Basis MA Financial accounting
Covered aspects Under this accounting both financial
and non financial aspects are focused.
While under this accounting only
financial aspects are covered.
Time period of
preparation of
reports
In this accounting, the reports are
prepared as accordance of need of
business entities. There is no specific
time to produce these reports.
On the other hand, in this accounting
the financial reports are prepared as
per the set rules and regulations bye
IFRS.
Compulsory Implementation of this accounting is
not necessary for companies.
While, this is essential for companies
to apply this accounting in order to
manage financial transactions.
Types of MAS :
 Inventory management system – It can be defined as a type of accounting system that is
linked with systematic process of focusing of those activities which are linked with
buying and selling of stock (Trucco, 2015). This accounting system is based on the
valuation of inventories by help of different kind of techniques such as LIFO (last in first
out), FIFO (first in first out) and many more. This is essential for manufacturing entities
in order to manage cost of various kind of activities such as ordering cost, carrying cost
and many more. Under LIFO method, goods that are bring in last are used first for
production. While under FIFO method, good that bought first are utilised first for
manufacturing. In the above Imperial brands company, their production department
manages qualitative aspects of material.
 Price optimisation system- This is a type of accounting system in which different types of
systematic activities are done in order to set prices of products and services. In broad
manner, under this accounting companies focus on gathering information of customers
perception on different price levels and their consideration about companies products. On