Management Accounting: Tools and Techniques for Financial Problem Solving

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Section (A)..................................................................................................................................3
Section (B)..................................................................................................................................4
TASK 2............................................................................................................................................6
Financial report for the month of January 2020..........................................................................6
TASK 3............................................................................................................................................7
Compare and contrast three planning tools used in management accounting.............................7
TASK 4............................................................................................................................................9
Ways in which management
accounting is applied to deal with financial problems...............................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The term management accounting (MA) is a form of accounting which is aligned to
procedure of gathering monetary and non-monetary data from different resources to produce
inner reports (Nimtrakoon and Tayles, 2015). These reports act as a crucial framework to take
important decisions. The aim of project report is to understand about importance of MA for inner
stakeholders of corporations. This report is based on a company that is Excite entertainment
limited company. The company operates its operations in promotion of concerts and festivals.
This company is a client company of “Grant Thornton” that is a leading accountancy firm in UK.
The project report covers detailed information about detailed understanding of management
accounting systems (MAS), MA reporting, planning tools etc.
TASK 1.
Section (A)
(a)Difference between MA and financial accounting:
Basis MA FA
Mandatory MA is not necessary as financial
accounting.
While financial accounting is
essential to be applied in companies
accounting process.
Format In this accounting any specific
format to produce inner reports is
not applied.
On the other hand, under its
financial statements are prepared as
per the accounting standards.
Information In MA, information about financial
and anti-financial aspects is
included.
In this accounting only financial
information is included for further
process.
Time frame In this accounting, there is no any
specific time to prepare internal
reports.
On the other hand, under this
financial statements are prepared at
the end of an accounting period.
(b) Cost accounting system- This accounting system is applied by production department of a
business entity in order to manage expenses of different functions. Its objective is to keep
an effective control over additional and unwanted cost. This is based on two types of

costing methods which are direct and indirect costing. The direct costing is defined as
charging cost of product which is variable (Papazov and Mihaylova, 2015). While
indirect costs are those which are not directly linked to a particular cost object. In the
context of above Excite entertainment limited company, this accounting system is applied
to manage overall expenses regards to organising any event.
(c) Stock management system- It is an accounting system which is based on evaluation of
quantity of stored stock by help of different techniques such as LIFO, FIFO etc. The
objective of this accounting system is to keep control over usage of raw material in
production process. In the Excite entertainment limited company, this accounting system
is applied to track usage of instruments in organising an event.
(d) Job costing system- In this accounting system cost of per unit is calculated by assigning
cost of job of each item. This is beneficial for those companies whose product portfolio is
larger. In the Excite entertainment limited company, their managers apply this accounting
system to track cost of organised event as well as cost of each function.
(e) Benefits of accounting systems:
 Cost accounting system- It is associated to reducing cost of different activities and
operations. In the above company, this contributes to their finance department in
order to minimising those expenses which are unwanted.
 Stock management system- This is linked with managing cost of materials that are
stored in warehouses. In the above company, their manufacturing department
implies this accounting system to better management of stored raw materials.
 Job costing system- It contributes in calculating cost of per unit separately. In
Excite entertainment limited company, they apply this accounting system to
manage cost of job as well as finding value of per unit cost.
Section (B)
(a) Different kinds of MA reports.
In business environment, different MA reports have a major role in strengthening the
business operations and determining the weak areas of business and task. These areas are needed
needed to be altered and modified to make maximum profit for company. Some of these are
detailed below: