Management Accounting - Excite entertainment limited Assignment
Added on 2021-02-20
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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3TASK 2............................................................................................................................................8TASK 3..........................................................................................................................................11TASK 4..........................................................................................................................................13CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................17
INTRODUCTIONThe management accounting can be defined as a kind of accounting that is linked withprocess of acquiring quantitative and qualitative information in order to produce internal reportsfor managerial aspects (Elmassri, Harris and Carter, 2016). These reports play an essential role inthe context of managing internal functions and activities of companies. It is so because by usingthese internal reports, managers of business entities take further decisions. Basically, the mainaim of this project report is to describing concept of management accounting in the context ofinternal management of businesses. In the project report, a company is selected that is Exciteentertainment limited which is located in UK. This company is a client organisation of a leadingaccountancy firm and operates in entertainment industry. This project report covers differenttopics such as MAS, MA reports, income statements under costing methods and many other. Inaddition, role of MAS in overcoming from financial issues is also covered. TASK 1Section A(a) Comparison between MAS and Financial accounting.Management accounting – In this accounting, monetary and non monetary information isused by accountants for development of internal reports. Financial accounting- In this type of accounting only financial information is consideredfor preparation of different financial statements which are presented to external stakeholders andare also used internally (Smith, 2015).Comparison:BasisManagement accountingFinancial accountingLegalrequirementThere is no legal requirement ofdeveloping management accountingreports. In financial accounting, it is a legalcompulsion to develop financialstatements for stakeholders. Types of datausedIn this accounting both financial andnon financial data are used.On the other hand, in this accountingonly financial data is used.Format ofpresentationThere is no any particular format ofpresentation of MA reports.It is important to present financialstatements to stakeholders in a standardformat regulated by IFRS.Different kind of MAS:
(b) Cost accounting system – It is an accounting system which is linked with process of predicting cost of various kindof operations and activities. Main objective of this accounting system is to manage and reduceoverall expenses of business entities. In addition, this is essentially required by companies toassign the financial resources in companies operations as per the predicted expenses of differentactivities (O’Grady, Morlidge and Rouse, 2016). There are various kind of costing techniqueswhich are used in this accounting system such as standard costing, direct costing etc. Thestandard costing includes absorption costing system in which both kind of costs are taken as unitcost. While in direct costing marginal costing is included in which only variable cost is taken asunit cost. These costing systems help to companies in keeping effective control overexpenditures. In the aspect of above respective company, Excite limited they are implementingthis accounting system in order to control expenditures of activities regards to entertainmentprograms. Such as absorption costing is helpful in tracking the profit accurately and marginalcosting is beneficial for controlling the cost of production. (c) Inventory management system – This accounting system is combination of two activities which are monitoring andmaintenance of stored goods in warehouses. The stored material can be companies' assets, rawmaterial, finished products etc. It is essentially needed in companies by manufacturingdepartments so that they can make a better decision regards to production. In this system, variousapproaches are included such as just in time, perpetual inventory system, perpetual inventorysystem and periodic inventory system. The Just in time is related with minimising time ofproduction so that cost can be controlled. In addition, the perpetual inventory system tracks theavailable inventory balance in warehouses. While periodic inventory system benefits in assessingamount of inventory which a company have at the end of an accounting period. As well asAbove respective company is applying this accounting system to manage their inventories suchas equipment like LED, music system and many more.(d) Job costing system – It is a kind of accounting system which is associated with identification of expendituresand income by each job that is assigned to various activities (Sithole, Chandler, Abeysekera and
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