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Management Accounting Assignment : Excite Limited

   

Added on  2020-12-29

19 Pages5378 Words470 Views
MANAGEMENTACCOUNTINGREPORT FOR EXCITEENTERTAINMENTLTD

Table of ContentsINTRODUCTION...........................................................................................................................1LO 1.................................................................................................................................................1P1 Management Accounting and its requirements......................................................................1P2 Methods for management accounting reporting....................................................................5LO 2.................................................................................................................................................7P3 Preparation of Income Statement using Absorption & Marginal Costing..............................7LO 3.................................................................................................................................................8P4 Advantage & Disadvantage of Planning Tools......................................................................8LO 4.................................................................................................................................................8P5 Adaption of management accounting system to resolve financial problems.........................8CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12

INTRODUCTIONManagement Accounting enable managers of organisations in evaluating its internalinformation and making various important decisions so that company can achieve its objectives.The below report elaborate meaning of management accounting and difference between financialand management accounting. Further, this report explain different types of managementaccounting system. Furthermore, this report include various methods of management accountingreporting. Moreover, this prepare Income Statement by using Absorption and Marginal Costing.After that, the below report gives advantage and disadvantage of planning tools. At alst thisreport include various methods to resolve financial problems.LO 1P1 Management Accounting and its requirements Financial Accounting and Management Accounting are two methods of accounting usedby business organizations to monitor and control their financial position. Excite Limited is anUK based company offer services of event management and organises concerts at differentlocation in the country. As company is operating its business at a large scale it is required by theaccountant of company to manage its accounts and all the other financial transactions and itbecomes possible only when company uses an effective accounting system manage its businesstransactions(Boučková, 2015).Management AccountingManagement Accounting provides all the relevant information related to company to itsmanagers. Thus,Management Accounting is a process of accounting which is used by managersof a business firm in decision making, planning and performance management. This accountingmethod also enable managers resolving financial problems.Financial AccountingFinancial Accounting is an activity through which a business firm can record, analyse andinterpret all its financial transactions. With this accounting method Excite Limited can use itspresent its financial information in statements and disclose them to its Internal &External Users.Difference between Management Accounting and Financial Accounting: Factors Management Accounting Financial accounting Format of Presentation This accounting methodprovides internal informationFinancial statements areprepared by using this1

of business operations to itsmanagers such as informationrelated to Future FinancialPlan or Details of Cost. E.g. Budget is presented in aproper format by segregatingIncome&Expenditures(Bromwich andScapens, 2016). accounting methods such asBalance Sheet, IncomeStatement and Statement ofCash Flow. E.g. Balance Sheet ispresented in a prescribedmanner which gives detailedinformation of all the assetsand liabilities.Legal Requirements Not rules and guidelines areset by government fro thedisclose and presentation ofinformation related tomanagement accounting.Excite Limited can present itsinternal information to itsmanagers in any format whichcan be easily understand by themanagers.All the financial statementsare mandatorily prepared andpresented in the prescribedformat. Excite Limited cannotprepare its Balance Sheet inany other format which is notregulated by government ofUK. Further, it is essential forthe companies to disclose itsfinancial information togeneral public(Carlsson-Wall,Kraus and Lind, 2015).Areas of Coverage within theOrganizationThis Accounting methodmanager all the operationalactivities required inproduction of companiesproducts & services. ForExample- Cost Minimization,Preparation of ProductionBudget or Sales Budget andImprovement in productionprocesses.Financial Accounting controland manage over all businessperformance such as managingand enhancing financialperformance by disclosingfactual data to investors andcreditors so that investors canmake investment decisions andcreditors can check reliability.Through this accounting Excite2

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