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P 2 Different methods utilized for management accounting reporting

   

Added on  2021-02-21

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Finance
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Management Accounting
P 2 Different methods utilized for management accounting reporting_1

Table of ContentsINTRODUCTION...........................................................................................................................1LO 1 ................................................................................................................................................1P 1 Understanding of Management accounting and different types of accounting system ........1P 2 Different methods utilized for management accounting reporting........................................4LO 2 ................................................................................................................................................6P 3 Calculate costs utilizing appropriate techniques of cost analysis to make income statement......................................................................................................................................................6LO 3 ................................................................................................................................................7P 4 Advantages and disadvantages of various kinds of planning techniques utilize forbudgetary control.........................................................................................................................7LO 4 ..............................................................................................................................................10P 5 Compare ways in terms of adapting management accounting systems...............................10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
P 2 Different methods utilized for management accounting reporting_2

INTRODUCTIONManagement accounting includes creating and giving financial and statistical data tobusiness managers timely, so that they can create daily and short term decisions of managers. Itis also called as managerial or cost accounting which is different from financial accounting(Merchant and White, 2017). Study is based on the Nero Ltd. Report will explain managementaccounting and give important requirements of various kinds of management accounting system.It will state different methods utilized for management accounting reporting. It will calculatecosts like marginal and absorption costs utilizing appropriate techniques of cost analysis to createincome statement of firm. Furthermore, assignment will explain the advantages anddisadvantages of different kinds of planning tools utilized for budgetary control. LO 1 P 1 Understanding of Management accounting and different types of accounting system Management accounting can be referred as the process to prepare the management reportand accounting report in order to provide the accurate and correct financial information to thecompany so that they can operate all its day to day operations in the company (Meaning andDefinition of Management Accounting. 2019).This management accounting system defined as the systematic procedure of recoding,analysing, evaluating the cost of an entity in the organization in the direction to prepare thecorrect internal financial report and statical information which is being required by the managersof the company to manage all its day to day functions in order to achieve their desired goals ofcompany (Weetman, 2019). This management accounting is being used only for the internalteam members of the that helps to formation of the different plans, policies and strategies andcontrol those plans and policies. Basic difference between the management accounting and financial accounting is thatmanagement accounting helps the managers of the company by providing the cost and financerelated information which is needed to assist the operations and taking decision for theorganization, whereas financial accounting helps the external parties and member of theorganization like all the stakeholders by preparing the financial report and provide them to takecorrective decision.Importance of management accounting in organization1
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This management accounting help the NERO company to take its effective decision as itprovide the effective and accurate financial data to the managers. This also play important role to create planing for the different operations in Nerocompany as it gives the regular financial report to managers. Principles of management accountingDesigning and compiling – One of the principle is to design the report by compiling allthe information, records, statements and statics, of past, present and future data (Lewis and PerezMaldonado, 2019).Control at source accounting – Required sources of the company is also controlled bythe accounting. As this give the qualitative and quantitative data of resource its utilization,maintenance then have control over these resources.Roles of management accounting Management accounting play the role to planing all the strategies of the organization byproviding detailed financial reports. Also play the role as controller, decision-making, by give the accurate and effective dataon the basis of the past and present performance of the company. Different types of management accounting system Cost accounting system – This accounting system refers as to recording, evaluating,analysing and classifying the cost, in order to anticipate the cost of their products and services(Sedevich-Fons, 2019). Purpose of this system is to identify the profitability, inventory valuationand cost reduction. AdvantagesDisadvantagesIt can be followed, tinkered with andapplied as per modification wants ofthe Nero Ltd. This kind of accounting system can beideas of as sort of three-dimensionalproblems such as accounts, calculationsand reports that can be handled andviewed from various angles. This method does remove uncertaintyand misappropriation of accountingguidelines of cost accounting.Workers have to receive additionaltraining and must sufficiently cooperatewith information input (Schaltegger andBurritt, 2017). 2
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