Management Accounting : Bright Star Financial Consultancy
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Added on 2021-02-20
Management Accounting : Bright Star Financial Consultancy
Added on 2021-02-20
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Management Accounting
INTRODUCTIONManagement accounting refers to preparation accounts and reports which will renderexact and timely statistical as well as fiscal data that is requisite by management for making day-to-day short- term decisions. It arranges financial along with non-financial information withinorganised way (Laudon and Laudon, 2015). Accounting system is referred to accounting process,that will furnish reports to managers by which they can formulate plans as well as policies withrespect to future. This report is based on Bright Star financial consultancy, they are responsiblefor serving various organisations such as Stitchland Ltd. This report also deals with differentmanagement accounting systems, costing methods for presentation of income statements. Alongwith this, usage of planning tools & management as well as accounting systems for measuringfinancial crises has been elaborated. TASK 1.P1 Explicate management accounting as well as necessary obligations of diverse accountingsystems.Management accounting: It refers to system which is related to internal governance oforganisation by which usage of resources can be maximised. With respect to Stitchland Ltdorganisation, utilise these accounting system while carrying out their manufacturing operations. Management accounting system: It is a kind of a system that is liable for arrangement ofmonetary as well as non-financial data of organisation within effectual way with an aim offormulation of decision (Plumb and et. al., 2017). It is necessary for Stitchland Ltd to haveknowledge associated with management accounting.Significanceto incorporate assorted accounting systems in firm:Various kinds ofaccounting systems assist within computation of cost along with inventory management systemthat are beneficial for Stitchland Ltd for effectual management of stocks. It also renders priceoptimisation which will furnish a framework for identification of prices.Origin, role and principle:Origin: It can be monitored through revolution within time frame in organisations ofEngland. Along with this conceptual framework of accounting is evolving from years.1
Principles: The accounting system comprises of major generalities, they are value,relevance, influence & trust (Hilton and Platt, 2013). All these principles have significantimportance and assist to attain effectual results with respect to these. Distinguish among management & financial accounting system:BasisManagement accounting systemFinancial accounting systemSignificanceInternal stakeholders of StitchlandLtd are aided by managementaccounting. This system will assist both externaland internal shareholders oforganisation. Duration of timeThere do not exist any peculiar timefor formulation of records withinthis accounting system. In this case Stitchland Ltd, preparesfinancial statements of peculiar fiscalyear in its relevant end.Management accounting types:Cost accounting system:This denotes accountancy systems. This renders a framework forestimation of cost associated with products (Hopper and Bui, 2016). It will assist organisationlike Stitchland Ltd to calculate entire cost associated with manufacturing as well as services. Itaids organisation that operates within manufacturing sections. Organisation has executed thisaccounting system for managing as well as controlling entire cost associated with manufacturingof clothes. Inventory management system:It is associated with finding out goods withinmanufacturing process or supply chain. It negotiate with quantity of raw materials as well asfinished goods through which organisation can take effectual steps respectively (Stein and et. al.,2015). This the reason that, organisation formulate decisions with respect to purchase of rawmaterials. Bright Star financial consultancies, client organisation Stitchland Ltd can utilise thesescheme to carry their activities. Price optimisation system:It renders basis for determination of price at an effectual level.It is responsible for assigning prices by taking into consideration cost as well as profit acquiredby organisation and satisfaction level of their customers. This accounting system is responsiblefor fixture of appropriate prices of services as well as products offered by Stitchland Ltd as theyneed to furnish clothes at appropriate price to their customers. 2
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