Management Accounting and Techniques for Financial Reporting

Management accounting

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY ..................................................................................................................................4
PART 1 ...........................................................................................................................................4
P1 Management accounting and types of management accounting systems..............................4
P2 Methods used for management accounting reporting............................................................5
M1 Benefits of management accounting systems and their application within an
organizational context.................................................................................................................6
D1 Management accounting systems and management accounting reporting is integrated.......6
PART 2............................................................................................................................................7
P3 Income statement under marginal costing:............................................................................7
M2 Range of management accounting techniques and produce appropriate financial reporting
documents...................................................................................................................................9
D2 Financial reports that accurately apply and interpret data for a range of business activities
...................................................................................................................................................10
TASK 3 .........................................................................................................................................10
P4 Advantages and disadvantages of different types of planning tools used for budgetary
control.......................................................................................................................................10
M4 Use of different planning tools and their application for preparing budgets and forecasts11
TASK 4..........................................................................................................................................11
P5 Management accounting systems to respond to financial problems....................................11
M4 Responding to financial problems, management accounting can lead organizations to
sustainable success....................................................................................................................12
D3 Planning tools for accounting respond appropriately to solving financial problems..........12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Management accounting is defined as the process of handling and managing transactions
associated with finance. There are different type of transactions involved in business and it is
necessary to have a proper analysis of managing it in order to record and track all the financial as
well as non financial data and information. Internal reports are made for managing the financial
reports and data effectively (Napitupulu, 2020). There are non monetary as well as monetary
resources available within organisations which is used for managing the organisational activities.
Following report is based upon company naming Innocent Drinks limited. This is a company
which is client of AJ and sons. It is involved in offering consultancy services and accounting
management. Basically, there are three parts in this report. Part 1 includes information of
management accounting reports and systems. Part 2 includes financial techniques and practical
implementation for the data of company. Last part discusses about planning tools involved in
management accounting systems.
MAIN BODY
PART 1
P1 Management accounting and types of management accounting systems
There are different type of managerial accounting systems involved within the business
processes. The concept of management accounting is defined as managing data and information
associated with transactions of previous year in order to develop good internal reporting system.
Managers have to take effective decisions in order to manage the functioning of company. In
context of Innocent drinks, it is said that accounting operations can be adopted by the manger of
this company in order to improve the way of working. It is important for the company to manage
the financial decisions effectively so that company can earn profits and make huge amount of
money. For running successful business, it is important to manage the financial aspect of
working effectively (Horvat and Mojzer, 2019). There is need to develop strategies which will
help in making effective financial decisions. It develops strong strategies which leads to
managing of all operations and activities in a way that company makes huge profits.
Purpose of Management accounting- The concept of management accounting is involved in
developing if effective decisions which leads to manage data and information effectively. There

are several internal stakeholders associated with the companies. All the financial data and ratio
affects them.
Distinction between MA and financial accounting:
Base for
compariso
n
MA Financial accounting
Users This accounting is mainly designed
for internal stakeholders.
It is used by both internal and external
stakeholders.
Regulatio
ns
There are no rules and regulations
under this accounting to prepare
internal reports (Tekathen, 2019).
This accounting contains several
regulations which need to be considered
by accountants.
Type of
company
It can be applied in any form of
business. This accounting does not
require any listed company.
While this accounting is a mandatory for
those companies which are listed in a
reputed stock exchange.
P2 Methods used for management accounting reporting
Management accounting reporting refers to the effective process that used for preparing
different kind of formal written documents that includes information about the different segment
of business. Thus, it is crucial for organisation to analysis all the aspects before implementing
reports. With the help of this, management of business organisation can easily take appropriate
decision and at the same time also develop positive performance.
Inventory management report: This type of document is also play a significant role in
business as it used for managing inventory. It includes the information about quality of material
that used in company, needed material and so on (Tan, 2019). This can be beneficial in taking
appropriate judgement in regards to stock. As it help in increasing the profitability level of the
company at market place.
Accounts receivable report: It is refers to the effective type of document that is used by
finance department of company with the aim of managing their performance level. Along with
this, it includes various type of information about debtors, payable amount along with interest,
debtors and many more. In this manager of the company can prevent to credit transactions that