Management Accounting for IMDA Ltd - Report

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Added on 2020-01-23

Management Accounting for IMDA Ltd - Report

Added on 2020-01-23

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Management Accounting for IMDA Ltd - Report_1

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1) Functions of management accounting...................................................................................3P2) Management accounting systems..........................................................................................5TASK 2............................................................................................................................................6P3) Income statement for Imda ltd...............................................................................................6TASK 3 (p4)....................................................................................................................................9a) Different types of budgets and their advantages and drawbacks.............................................9b) Budget preparation process...................................................................................................11c) Pricing strategies....................................................................................................................12TASK 4 (p5)..................................................................................................................................13Performance management for Imda ltd......................................................................................13CONCLUSION..............................................................................................................................15REFERENCE.................................................................................................................................162

Management Accounting for IMDA Ltd - Report_2

INTRODUCTIONManagement accounting is a multidisciplinary approach that is useful for makingdecisions and preparing planning for effective business operations. It decision making tool foroperating business activities and improving its efficiencies. The present report is based onunderstanding different aspects of management accounting for Imda ltd. It is producer of specialcharger for mobile telephone and its gadgets. In this regard, different functions of managementaccounting and their systems can be described. However, income statement preparation throughmarginal and absorption costing is to be presented for decision making to produce andsupplement goods through this assignment. Including this, several kinds of budgets includingcritical evaluation on them is to be expressed through that leads to analyzing actual performanceof organization and improving efficiencies for further business operations. Moreover, differentideas for maintaining performance and non-performance of Imda ltd can be understood. Thus,learners are able to understand various management accounting aspects through this report foreffectiveness of mobile gadgets for proper management effectively.TASK 1P1) Functions of management accountingManagement accounting is essential for making decisions related to quality services oforganization. It includes analysis of actual organization's performance and generating differentideas for management of overall business operations. In this regard, various tools and techniquesare used including costing, budgeting, preparing income statement, ratio analysis and so on.However, on the basis of this analyzing company's performance, further decisions are made toimproving efficiencies of company efficiently (Bogt, Helden and Kolk, 2015). It is quitedifferent from financial accounting that is interrelated with economic performance and non -monetary operations. Therefore, financial accounting is quite different from managementaccounting that can be expressed as below:-Financial accounting:- Under this accounting system, all transactions are recordedrelated for exchanging goods and services. In accordance to this, incurred costs on expendituresand gained revenue are recorded for implementing further business operations. However,effective financial information are gained through this accounting system for creating balance3

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between income and expenses effectively (Chan, Wang and Raffoni, 2014). Therefore, financialaccounting is essential for company's cash account increment and for transactions, creating debitamount similar to credit amount. Differences between financial and management accounting:- It is analyzed thatfinancial and management accounting systems are different from each other. Under which,financial accounting is related to presenting economic performance of entity and on the basis ofthis analysis strategies are prepared for financial development, relevance and reliability(Chenhall and Moers, 2015). In addition to this, different financial statements are analyzedincluding profit and loss account, balance sheet, cash flow-fund flow and so on. While, on the other hand, management accounting involves all activities of businessorganization including production and distribution of goods, performance management, incomestatement as well preparing financial statements etc. However, it is wide in concept as wellremains useful for management of entire business activities. In addition to this, effectiveness ofbusiness organization is gained through analyzing all tools and further making decisions toimplement action plans effectively (Costa and et.al., 2016). Thus, financial accounting isdifferent from management accounting for operating business operations and making decisionsregarding financial and non-monetary tools analysis. In this regard, comparison betweenfinancial and management accounting can be expressed as below:-BasesFinancial accountingManagement accountingPurposesTo disclose Imda ltdfinancial performanceon a specific time.To present end result asprofit and loss gainedby organization.To help managementthrough financialstatement analysis.To prepare strategiesand making decisionsfor furtherimplementation andeffectiveness of firm. Appropriate for usersExternal usersMainly for internal usersLegal requirementsIt is needed according to lawand taxIt is choice4

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