Management Accounting: Systems, Techniques, and Reporting

MANAGEMENT
ACCOUNTING

Contents
INTRODUCTION...........................................................................................................................3
SECTION A.....................................................................................................................................3
(a) Differences between management accounting and Financial accounting........................3
(b) Cost accounting system....................................................................................................4
(c) Inventory management system..........................................................................................4
(d) Job costing system............................................................................................................5
(e). Evaluation of benefits of various management accounting systems................................5
SECTION B.....................................................................................................................................5
(A) Types of managerial accounting reports..........................................................................5
(b) Explain why information presented should be accurate, relevant to the user, reliable up to
date and timely.......................................................................................................................7
(c) Management accounting system and management accounting reporting are integrated
with organisation process.......................................................................................................7
SECTION 2......................................................................................................................................7
Cost accounting techniques to prepare an income statement.................................................7
TASK 3............................................................................................................................................9
Advantages and disadvantages of different types of planning tools used for budgetary control.
................................................................................................................................................9
TASK 4..........................................................................................................................................12
Comparison of organisations to respond the financial issues by management accounting
system...................................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Management accounting can be defined as an integral part for an organisation which
analysis business profits by making suitable reports from the existing information. The main
motive of management accounting is to make effective decisions which leads management to
accomplish their work by maintaining financial stability for the organisation. This report is based
from the perspective of Excite Entertainment Ltd. which deals in organising entertainment and
leisure activity in the United Kingdom. Their main activities includes promotion of concerts and
festivals at location of UK. Moreover, the report highlights on management accounting system
along with its advantageous factor. It undertakes cost accounting methods, reporting system and
planning tools to control budgets of the organisation. In the last, tools such as Key performance
indicator, benchmarking etc. that explains long term profitability for the management.
SECTION A
(a) Differences between management accounting and Financial accounting
Management accounting- is defined as a process of recognising, presenting, summarising
and controlling the financial transaction for an organisation. In order to manage this effectively
management focuses on all those methods which is effective to record financial information such
as balance sheet, cash flow statement and profit & loss account. Moreover, the concept of
management accounting is linked with managing cost of business operations and its functions. It
also helps organisation to operate their business operations in order to manage funds effectively
(Adler, 2013).
Financial accounting- works as a specialized branch for accounting which is used to keep
the track of financial transactions. Further, it is based on various guidelines that is used to
transact record, summarise and present all the financial information with an effective
management system such as income statement, profit & loss account and balance sheet.
Excite Entertainment Ltd. also utilise different management accounting system which is
used too to manage financial information for organisation. The main aim to implement effective
management accounting system is to accomplish organisational goals and objective in shorter
period of time.
Difference between management accounting and financial accounting

Basis Management Accounting Financial accounting
Meaning Management accounting
considers as an effective
system which leads
organisation to make effective
plans in order to increase their
profits for longer period.
Financial accounting focuses
on preparing those accounts
that are related with monetary
value such as balance sheet,
profit and loss account etc.
which helps to know about
financial position in market.
Operator Management accounting
relates with internal
department of an organisation
who are able to make effective
plans for organisational
financial profits.
Finance related decisions are
the interest of other institution
such as investor, banks and
angel investor. As
organisation leads them to
earn more profits.
Laws and legislations There is less restriction are
monitor in management
accounting because
management prepares it as per
their need.
International standard and
some rules are developed by
industry and country such as
IRS/GAAP. So it is mandatory
for organisation to follow
decided format.
(b) Cost accounting system
This system leads organisation to analyse and evaluate all the cost related with products
either fixed or variable. By utilising cost accounting system it is easy for management to estimate
accurate price for their products. These results it helps organisation to analyse the net profits
which are earned by management in future (Ax and Greve, 2017).
(c) Inventory management system
With the implement of inventory management system it is easy for organisation to find out
the actual status about the inventory of Excite Entertainment Ltd.. The major benefit for
inventory management system is to find out the availability of their products and services that is