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Management Accounting INTRODUCTION 3 TASK 14 P1A. Concept of management accounting

   

Added on  2020-02-05

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Management Accounting
Management Accounting INTRODUCTION 3 TASK 14 P1A. Concept of management accounting_1
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1 ...........................................................................................................................................4P1A. Concept of management accounting..................................................................................4B. Management accounting System............................................................................................5TASK 2............................................................................................................................................7P3 Computation of cost by using different methods...................................................................7M2...............................................................................................................................................9D2..............................................................................................................................................10TASK 3..........................................................................................................................................10P4A. Different type of budgets.................................................................................................10B................................................................................................................................................11C................................................................................................................................................11M3.............................................................................................................................................11D3..............................................................................................................................................11TASK 4..........................................................................................................................................12P5 Balance care approach.........................................................................................................12M4.............................................................................................................................................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
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INTRODUCTIONManagement accounting is the process of identifying and analysing financial informationto take effective decisions and such information can be used within the organisation only. In thisboth strategic and financial information are used in order to get effective and accurate result.Accounting of the management process to evaluate the tabular information can help the managerof the Imda Tech to control and plan the activities of the business (Baldvinsdottir, Mitchell andNørreklit, 2010). Effective management accounting can be used for planning and budgeting,decision making, measurement of performance which will be helpful in achievement of theobjectives. Management accounting is a process of gathering information that can be helpful inthe process of effective decision making regarding the financial accounts of the enterprise. In thisreport of the Imda Tech various aspects in relation to management accounting will be describedwhich will include the different types of budgets that are used by the organization to run theirbusiness in effective manner, different type of management accounting systems, differencebetween management and financial accounting will also be explained together with the variousmethods of costing which are used in order to ascertain the cost of the product (AdvancedManagement Accounting, 2017). TASK 1 P1A. Concept of management accountingManagement accounting:- The preparation of reports of management and accounts ofthe organisation which provides information on time to the managers of organisation is referredas management accounting. Management accounting refers to a process in which employees ofthe business entity that they have to use appropriate and relevant skills and knowledge so thatthey can provide the best products and services with a better quality which will helps them inincreasing the sales and generate more and more revenue. The employees have to use appropriatepolicies, laws and regulations and also have to use appropriate information while providing thenservices so that they can not face nay data in attaining the goals and objectives. Managementaccounting helps in collecting,. Trecording, summarizing as well as implementing theinformation or data so that they can maintain the performance in the market and on the basis ofthat the employees of the form can accomplish the goals and objectives. Differences between Management accounting and financial accounting is described as follows:
Management Accounting INTRODUCTION 3 TASK 14 P1A. Concept of management accounting_3
BASISFINANCIAL ACCOUNTINGMANAGEMENT ACCOUNTINGMeaningThe preparation of financial statementof organisation with an accountingsystem to provide information tooutsider is known as financialaccounting (Bennett, Schaltegger andZvezdov, 2013).The systematic accounting which helps toprovide the information to the managers ofinternal departments of organisation toframe plans and policies is known asmanagement accounting.ObjectiveThe main purpose of preparing is toprovide information to externalpersonnels.Its main objective in preparation is toprovide help to managers in framing plans,policies and taking effective decisions.FormatIt is prepared in specific format.It does not have any specific format inpreparation.ReportsThe financial reports of organisation issummarised.Detailed information of variousdepartment is provided.UserReport is used by internal and externalpersonnelsIt is only used by the internal personnelsof organisation (Busco and Scapens,2011).2.The business organisations have to take many short term and long term decision in theoperation of the business. The management accounting have great importance for the managersof IMDA to take effective decisions. The importance of management accounting in taking thedecisions is described as follows:-Relevant cost analysis:- The management accounting helps sales manager of IMDA todetermine best low cos alternatives for sales promotion of the products produced by theorganisation. It helps management to analyse the cost of all alternatives of promotion availablefor the organisation which helps to take best decisions which incurs less cost (Christ and Burritt,2013).Make or Buy decision:- The management accounting helps managers to take decision regardingthe component which is used in manufacturing of primary product. In helps to determine that thecomponent has to be purchased or it has to be manufactured within the organisation by analysingthe cost of purchase and manufacturing.
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