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Management Accounting Of Company : Assignment

   

Added on  2021-01-02

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MANAGEMENTACCOUNTING
Management Accounting Of Company : Assignment_1

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1LO 1.................................................................................................................................................1Management accounting system..................................................................................................1LO2..................................................................................................................................................4TASK 3............................................................................................................................................7Advantages and disadvantages of the planning tools used in budgetary control.........................7Use of different planning tools and their application...................................................................7TASK 4............................................................................................................................................9Using management accounting system to solve financial problems...........................................9Analysis of how management accounting leads the organization to success............................10Evaluation of planning tools in solving the financial problems................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13
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INTRODUCTIONManagement accounting is the managing of the accounts any organization. It involvesrecording and interpreting the data relating to company. The management accounting is useful toall levels in organization which includes lower level to the top management staff in company.Where management accounting involves the recording of data on the daily basis, managementreporting includes presenting of accounting reports to top management. Management report caninclude budget report, job-cost report, account receivable reports and inventory managementreport. The report will include management accounting systems. Also, the various managementaccounting techniques which are-margin analysis, constraint analysis, capital budgeting,inventory valuation and product costing (Shahzadi and et.al., 2018). Further the report includes the use of planning tools which are widely used inmanagement accounting and the benefits of using management accounting in the course ofbusiness. Also, the report will study about the ways in which organization can use managementaccounting to respond to companies financial problem. Also, the management accounting is usedin organization ABC Ltd. In order to achieve its organization goals. LO 1Management accounting systemManagement accounting- Management accounting is the process of analysing and evaluating cost of operating anybusiness. It relates to maintaining of records, report and accounts of business. In the managementaccounting process there is management of the affairs of the company. This management of theaccounts by managers help them to take management as well as financial decisions (Bruno andLapsley, 2018). The management accounting involves the collection of data through the dailyrecording of data, evaluation of the data and preparing reports on the given data. Themanagement accounting helps in the accumulation of the relevant data to assist the functions ofthe company and achieve its organization goals. Types of management accounting systems- The management accounting system have many types which are as follows- Inventory management system- this involves the management of the inventory in thebusiness through the recording of the inflow and outflow of the raw material and finished1
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goods. This helps in the planning of the production of goods by production department(Hald and Thrane, 2016).Cost Accounting System- it refers to the recording of the cost of production of anyproduct. The flow of the goods are to evaluated so that there is proper flow of goods inthe company (Nielsen, Mitchell and Nørreklit, 2015).Job Costing System- the job costing relates to the estimation of cost of every job in theproduction process to ascertain the actual cost of producing the product (Akkermans andVan Oorschot, 2018).Price optimization system- this relates to the setting of the price at maximum level whichis accepted by the customer and the customer is satisfied (Shahzadi and et.al., 2018).Also, the price is suitable to company. Accounting reporting-The management reporting involves the recording of the data on daily basis by theoperation management, and analysing the recording data (McLean, McGovern and Davie,2015). After analysing the data is than interpret to the structure is required by the management.The management usually uses this data in decision making, forming plans and policies. Anowner and manager may request reports on quarterly ,monthly, weekly and daily basis. Methods used for management accounting reporting-There are mainly four methods used in the management accounting reporting which are asfollows-11Budget Report- Budget reports are prepared by mangers to evaluate the cost of incurredin running of the business and comparing it with the estimated cost (Järvinen, 2016). Thebudget reports helps in the determining the cost for the future products to bemanufactured. 11Accounts Receivable ageing reports- the accounts receivable reports shows the cash flowwithin the company. With the help of accounts receivables managers can find theproblem in the collection of funds (Bruno and Lapsley, 2018). By the continuousevaluation of the accounts receivable reports the company can handle its collectionseffectively and there can be no overlooking of the debtors. 11Job cost reports- these reports are prepared in relation to a specific projects. This helps incomparing of the actual cost incurred to estimated cost of that project (Hald and Thrane,2
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