Management Accounting Assignment Solved (Doc)
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Added on 2020-10-05
Management Accounting Assignment Solved (Doc)
Added on 2020-10-05
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Concept of management accounting and its essential requirement.......................................1P2 Different types of managerial reports and its importance......................................................4M1...............................................................................................................................................5D1................................................................................................................................................5TASK 2............................................................................................................................................6P3 Application of absorption and marginal costing method for preparation of incomestatement.....................................................................................................................................6M2...............................................................................................................................................8D2................................................................................................................................................9TASK 3............................................................................................................................................9P4: Merits and demerits of using various types of budgets and their significant.......................9M3: Evaluation of planning tools..............................................................................................12D3: Critical analysis of financial issues....................................................................................12TASK 4..........................................................................................................................................12P5: Balance scorecard approach................................................................................................12M4: Analysis of financial issues arises in an organisation.......................................................14CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15
INTRODUCTIONEvery kind of organisation whether small or large in nature required to record theirtransactions to analyse the current performance of their employees. This will provides theopportunity in development of new strategies which directs the employees for accomplishmentof desired objectives. Management accounting is important concept which helps in formulationof different kind of accounts and reports for improvement of understanding between the differentdepartments. It refers to the process of measuring, analysing, interpreting and communication ofinformation in achievement of organisational goals. Such different kind of reports providesfinancial and statistical information which enhance decision making power of management foroperation of day to day functions (Arroyo, 2012). It assists the manager of organisation inplanning, organising, monitoring and controlling. Tech(UK) Ltd. Producing special charger formobile telephone and other gadgets for retail outlets in UK. In the present report explain about, concept of management accounting, distinguishbetween management and financial accounting, importance ascertained by manager frommanagement accounting information as decision making tool, different types of managementaccounting systems, various kind of managerial accounting reports and their importance andapplication of the costing techniques like marginal and absorption for the purpose of preparationof income statement. Also, define about different kind of budgets and its advantages anddisadvantages, budget preparation process along with different pricing and costing system,importance of such budgets to manager and application of the principles of managementaccounting to respond financial problems.TASK 1P1 Concept of management accounting and its essential requirementDifference between management and financial accountingManagement AccountingFinancial AccountingBroad concept contains the provisions ofmanagerial and cost accountingNarrow concept in comparison tomanagement accounting and only includes theprovisions which helps in preparation offinancial statementsThe different kind of accounts and reports areused by the internal parties to enhanceThese accounts are used by the externalstakeholder to gain the information about1
decision makingorganisationIts perspective is future orientedIt includes the evaluation of past informationof organisationThis includes the preparation of differentreports which depicts the performance ofevery departmentIt helps to analyse the overall financialposition of organisationIt helps in preparation of operational budgetsaccording to need of different departmentsThis will assists in preparation of financialbudgets only.Examples of using this accounting is todetermine accountability that can be moremeaningful to the business management teamand other corporate finance departments.These are mostly used for evaluation ofcompanies performances. Examples of this aresuppliers, banks, customers and investors.Management Accounting: It is important concept which helps in recording of thetransactions of organisation of the basis of the performance of every department. This willincludes the use of various cost accounting principles in development of different kind ofaccounts and reports like job costing, inventory management, cost accounting etc. The mainpurpose behind the application of the principles of management accounting is to improvedecision making of internal parties and attains the support of employees in performance ofdifferent tasks and accomplishment of objectives within stipulated period of time.Importance of management accoutring to manager of organisation as decision making toolAs management accounting assists in performance of different kind of functions withinthe organisation. Therefore large numbers of importance are associated with their different kindof managerial and costing tools which are used by the manager of Tech(UK)Ltd. Are definedbelow:Effectivedistributionofresources: Management accounting system helps inpreparation of different kind of reports like inventory management, Accounts receivable,budgeting etc. It helps in assessment of the need of different departments to perform theirfunctions. It improves decision making regarding allocation of resources in mostoptimum manner (Boyns and Edwards, 2013).Assessmentofrisk: The main perspective behind the application of the managementaccounting principles within the organisation is formulation of future strategies on thebasis of the evaluation of their past performance. It improves the insight of manager toeffectively identify the risks and make solutions for its removal.2
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