Management Accounting: A Comprehensive Guide to Systems, Reports, and Planning Tools

Management Accounting
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Contents
Introduction.................................................................................................................................................4
TASK 1.......................................................................................................................................................5
Introduction.............................................................................................................................................5
(A) I. Distinguishing management accounting from financial accounting..........................................6
II..............................................................................................................................................................7
III. Cost Accounting Systems..................................................................................................................8
IV. Inventory Management Systems........................................................................................................9
V. Job Costing Systems.........................................................................................................................10
(B) I. Different types of management accounting reports................................................................11
II. Why it is important to present the information in the manner that it is understandable.....................12
M1) Benefits of management accounting systems in context of Tech (UK) Limited............................13
D1) How management accounting system and management accounting reporting is integrated within
the organization.....................................................................................................................................14
Conclusion.............................................................................................................................................15
TASK 2 (P3, M2, D2)...............................................................................................................................16
TASK 3.....................................................................................................................................................18
Introduction...........................................................................................................................................18
(A) Different kinds of budget and their advantages and disadvantages............................................19
(B) Process for preparing budget.....................................................................................................21
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(C) Importance of Budget as planning and controlling process........................................................22
M3) Analyze use of different planning tools and their application for planning and forecasting budget.
...............................................................................................................................................................23
D3) Evaluate how planning tool for accounting respond appropriately to solve financial problems to
lead to sustainable success.....................................................................................................................24
Conclusion.............................................................................................................................................25
TASK 4.....................................................................................................................................................26
M4) Analyze how in respond to financial problems, management accounting can lead organization to
sustainable success................................................................................................................................27
Conclusion.................................................................................................................................................28
References.................................................................................................................................................29
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Introduction
This part of the report explains about the understanding of the management accounting systems
and with that the explanation about the use of planning tools in management accounting systems
are also highlighted. Financial accounting helps in tracking the financial transactions so that the
financial performance of the organization can be evaluated. Various types of the management
accounting systems are also depicted such as cost accounting systems and the inventory
management accounting systems. The management reports are prepared and presented in the
understandable manner so that the managers can easily analyze those reports for evaluating
performance. The income statements of the Tech (UK) Limited are prepared by using absorption
and the marginal costing methods so as to analyze the cost. The last part of the report shows that
how management accounting and planning tools helps in solving the financial problems which in
turn leads to attainment of sustainability.
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TASK 1
Introduction
This part shows that how important management accounting systems are to the managers of Tech
(UK) Limited for taking the strategic decisions. With this it also explains the types of
management reports which are prepared by the managers for analyzing the financial statements.
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(A) I. Distinguishing management accounting from financial accounting.
Management accounting is the process which provides the guidelines to managers for taking
strategic decisions while the financial accounting is the process for preparing the financial
statements so that the performance can evaluated.
Basis Financial Accounting Management Accounting
Audit In financial accounting the
audit is necessary and is done
by the chartered accountants
hired externally (Richards,
2017).
In management accounting
auditing is not necessary.
GAAP It follows the rules as well as
the regulations of GAAP.
It does not include the rules
and regulations of GAAP
(Richards, 2017).
Time It deals with the past activities
(Kovaleva, et. al., 2016).
The management accounting
deals with the decisions which
are related to the future.
Timeline versus precision It highlights precision. It emphasis on the timelines.
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