Management Accounting Assignment | Bright star

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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Explanation of management accounting and essential requirement of various accountingsystems........................................................................................................................................3P2. Explanation of various kind of methods of management accounting reporting...................6TASK 2...........................................................................................................................................7P3 Costing Techniques for preparing the financial statements...................................................7TASK 3..........................................................................................................................................12P4 Benefits and drawbacks of different planning tools............................................................12TASK 4..........................................................................................................................................16P5 Management accounting in response to overcome financial issues.....................................16CONCLUSION..............................................................................................................................18REFERENCES..............................................................................................................................19
INTRODUCTIONManagement accounting is an accounting system that arranges financial and non-financial information in a systematic manner which becomes a basis for the managers for internalmanagement (Carpenter and Mahoney, 2012). In other way, this accounting system can bedefined as a type of accounting process, which provide reports to the managers so that they canmake competitive policies and plans for future. In the project report, management accounting isdefined in a broad sense including demonstration about various management accounting systems,use of costing techniques for presenting the income statements. As well as use of planning toolsand management, accounting systems in overcoming from the financial crises is mentioned. Forbetter understanding about these a financial consultancy, company is selected that is Bright starfinancial consultancy and it is located in UK. This company provides consultancy services todifferent companies and Stitchland Ltd is one of them which manufacturer the cloths.TASK 1.P1 Explanation of management accounting and essential requirement of various accountingsystems.Management accounting- Management accounting is an accounting system which is linkedwith the internal management of the companies so that they can take maximum use of availableresources (Ross, 2017). Such as the Stitchland Ltd company, use this accounting system in theiroperations of manufacturing process.Management accounting system- The management accounting is a kind of system that arrangesthe monetary and non monetary information of company in an effective manner for the purposeof internal decision-making. It is important to know about the management accounting systemthat it is beneficial for only to the internal stakeholders not for external stakeholders.Importance to integrate different accounting systems within the organisations:Differentkind of accounting systems are useful in the Stitchland Ltd company. Like the cost accountingsystem helps in computing the cost as well as inventory management system is beneficial ineffective management of stock (Munday,Turner and Jones, 2013). Apart from it priceoptimisation system provides a framework for determining the prices. So this is why theseaccounting systems have their importance.
Origin, role and principle of management accounting system:Origin- The origin of management accounting system can be tracked during the time period ofrevolution of industries in England (Parker and Northcott, 2016). As well as the conceptualframework of this accounting system was evolved in 500 BC.Principles- This accounting system includes mainly four types of principles like influence,relevance, trust and value. All the principles have their importance for effective result ofmanagement accounting.Difference between financial and management accounting system:BasisManagement accounting systemFinancial accounting systemImportanceThe management accounting systemis useful for internal stakeholders.On the other hand, this accountingsystem is beneficial for external andinternal stakeholders.Time periodThere is no specific time ofpreparation of reports in thisaccounting system.Under this, financial statements areprepared at the end of financial year.Various kind of systems of management accounting:Cost accounting system- It is an accounting system is also known by costing system. Ingeneral terms, this an accounting system which provides a framework for the purpose ofestimating the cost of products. As well as due to this accounting system companies cancalculate total cost of production and services. Eventually, it is useful for thoseorganisations which operates in the manufacturing sector. Such as the Stitchland Ltdcompany, they implemented this accounting system and through this they are able tomanage and control their cost of manufacturing of cloths. So overall cost accountingsystem is essential for predicting the cost and evaluating the profitability of various costof activities.Inventory management system- The inventory management system is an accountingsystem that is associated with the tracking the goods in the supply chain or inmanufacturing process (Correa and Larrinaga, 2015). As well as it manages the quantityof raw material and finished goods so that companies can take suitable steps accordingly.
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