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Management Accounting System and Management Accounting Reporting Contents

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Added on  2021-02-19

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Evaluation of benefits of various management accounting systems 3 D1 Management accounting system and management accounting reporting are integrated with organisation process 4 TASK 24 P3: Cost accounting techniques to prepare an income statement 4 M2: Management accounting techniques and financial reporting documents 8 D2. 11 M4: Evaluation of financial issues 13 D3: Critical analysis of financial issues13 CONCLUSION 13 REFERENCES 15 INTRODUCTION Management accounting is defined as a concept in which business operations and costs are analysed so that appropriate financial accounts, reports and

Management Accounting System and Management Accounting Reporting Contents

   Added on 2021-02-19

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MANAGEMENTACCOUNTING
Management Accounting System and Management Accounting Reporting Contents_1
ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and need of management accounting system................................1P2. Explain different method of management accounting reporting...........................................2M1. Evaluation of benefits of various management accounting systems....................................3D1 Management accounting system and management accounting reporting are integrated withorganisation process.....................................................................................................................4TASK 2............................................................................................................................................4P3: Cost accounting techniques to prepare an income statement................................................4M2: Management accounting techniques and financial reporting documents............................8D2. Financial reports which applies to interpret many business activities..................................9TASK 3............................................................................................................................................9P4: Advantages and disadvantages of different kind of planning tools of budgetary control.....9M3: Evaluation of planning tools..............................................................................................10TASK 4..........................................................................................................................................11P5 Comparison of how organisation adopt management accounting system so as to respond tofinancial problems.....................................................................................................................11M4: Evaluation of financial issues............................................................................................13D3: Critical analysis of financial issues.....................................................................................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................15
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INTRODUCTIONManagement accounting is defined as a concept in which business operations and costsare analysed so that appropriate financial accounts, reports and records can be prepared in aproper manner. This will benefits the business organisation in taking strategically right decisionsso that high growth can be achieved (Adler, 2013). In order to achieve this, the accounts managerneeds help from financial manager so that annual financial statements can be prepared in areliable manner. It will benefits the account manager in taking decisions as per financial positionof firm. This report is written in context with Airdri Ltd that operates in manufacturing anddesigning of air dryers that have unique features and consumes less energy. This report is goingto cover about the concepts associated with managerial accounting, managerial reports and theirbenefits to a business firm. Beside this, different costing methods and planning tools to controlbudget are discussed. At last, measures to resolve financial problems are mentioned. TASK 1P1 Management accounting and need of management accounting systemManagement accounting is defined as the way to communicate and analyse the financialdata to managers of an organisation so that timely and appropriate decisions can be taken. Itinvolve different types of accounting systems which are related with the financial terms of acompany associated with internal management. With the help of an efficient managementsystem, a firm takes important decisions by formulating effective procedures and policies. Inrelation with Airdri Ltd., the management accounting systems are going to manage differentactivities and functions so that work can be performed desirably. It depends on different methodswhich are discussed below: Price optimisation system: This kind of account management system benefits a firm indeveloping an efficient framework which allow to regulate the prices of products or serviceproperly. This accounting system is vital for a business firm to determine appropriate rates forspecific services or product at equal level. This system is also beneficial in context withcustomers as both organisation and client agrees at same price for the services & products whichare offered by firm (Arnaboldi, Lapsley and Steccolini, 2015).Cost accounting system: In this kind of accounting system, total capital and finances arecalculated which are needed by a business firm to perform different business operations and1
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activities. This kind of accounting system will allow a company to evaluate actual cost which isearned by them with the estimated cost that is decided by Airdri Ltd. management. Beside it, thissystem will benefits in calculating entire cost so that profit margins can be identified easily. Inventory management system: This management accounting system benefits a companyin organising and managing inventories that involves opening & closing stock, raw materials etc.Main function associated with this management system is that it tracks the amount of resourcesand raw material which are avialable in warehouse of company. Other than this, inventorymanagement system will help concerned company to monitor the amount of finished productswhich are present in a business firm (Chenhall and Moers, 2015).Difference between financial and management accountingBasisManagement accountingFinancial accountingMeaningThis system benefits a company incollecting relevant information anddetails which allow them informulation of effective policy andplans so that business can earn highgrowth. It is used by business firms toprepare accounts. This systembenefits them in ensuing a stablefinancial presence and position inthe market place. UserIt has involvement of internalauthorities which create effectivepolicies and plans. For example,management, manager, CEO etc. In this system those parties areinvolved which are presentoutside the company. Forexample, banks, investors andother financial institutions. Time focusIt is done for future use. It is performed to acknowledgepast data. P2. Explain different method of management accounting reportingManagement accounting report involves the data and information that is concerned withthe actual performance of various operations which are performed by a firm. Mainly, a companytakes their financial decisions after checking their report of management accounting. It benefitsthe company in formulating effective plans and strategies so that business operations can beperformed in an advantageous manner. Different types of management accounting reports arediscussed below: 2
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