Management Accounting Systems and Techniques

MANAGEMENT
ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
SCENARIO 1 ..................................................................................................................................1
Section A .....................................................................................................................................1
a) Difference between management and financial accounting .........................................1
b) Cost accounting system ................................................................................................2
c) Inventory management systems ....................................................................................2
d) Job Costing System ......................................................................................................3
e) Benefits of management accounting systems................................................................3
Section B .....................................................................................................................................3
a) Management accounting reports....................................................................................3
b) Relevance and reliability of information presented.....................................................4
c) Integrating management accounting systems and reporting .........................................4
SCENARIO 2 ..................................................................................................................................4
Marginal and Absorption costing techniques..............................................................................4
SCENARIO 3 ..................................................................................................................................6
Planning tools used by Excite ltd.................................................................................................6
SCENARIO 4 ..................................................................................................................................7
Management accounting in dealing with the financial issues. ....................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Management accounting is specialised branch of accounting which is concerned with
identifying, measuring, analysing and interpreting the accounting information. This helps the
management in making decisions for efficient management and operation of company. Report is
about the understanding of management accounting systems and the financial accounting system.
This research will also cover management accounting reports and the importance of reliable and
accurate information. It will also be cover different costing techniques including their benefits
and limitations (Shea and et.al., 2018). Management accounting also include the planning tools
for ensuring the financial stability and performance improvements. Management accounting also
helps in addressing the financial problems & preventing them using different methods. Present
report is based on the activities and operation of Excite ltd which operates in entertainment and
leisure industry in United Kingdom. Its main activities are promoting concerts & festivals in
Locations throughout UK.
SCENARIO 1
Section A
a) Difference between management and financial accounting
Financial accounting is defined as collection of the accounting information for preparing
financial statements. Management accounting is used for recording the business transactions so
that the accounting informations could be used for preparing cost records and other reports for
keeping costs under control. Financial accounting is intended to disclose right and correct
information to its stakeholders, so that reliable information could be made by them. Financial
statements are prepared mainly for the external users. Management accounting is more
confidential and is limited only to management of company. Management accounting is used for
bringing effectiveness and efficiency in the working of organisation. Management accounting is
concerned over the present and future forecasts where the financial accounting is concerned with
events that have taken place.
Though management and financial accounting are used synonymously but have
difference. Functions of management and financial accounting are different even when they are
inter related (Abu, Nor and Rahman, 2018). Management accountants uses data of financial
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