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Management Accounting - Nisa Retail Store

   

Added on  2020-07-23

17 Pages4609 Words37 Views
MANAGEMENTACCOUNTING

INTRODUCTIONThe system of accounting in which various activities like planning, organising,monitoring, managing etc. are included, is identified as management accounting. Very basicimportance of this particular accounting approach is to assess internal business conditions andsituations along with taking effective decisions. At the current study, Nisa Retail Store companyis undertaken to analysis various management accounting terms. The cited firm is operating inthe UK retail sector which is small business and having only national presence. Different kindsof approaches and systems which are used by the company for managing internal business areexplained in the current report. Apart from this, marginal and absorption costing methods areadopted to make profit and loss account which are described at the present project. Moreover, itshows about various number of planning tools which support to Nisa Retail Store in terms ofcontrol over the budgetary. At the end of present case, various systems are provided which helpsto the chosen entity in terms of responding financial issues and problems.TASK 1P1 Describing management accounting along with its several kinds of systems as well asapproaches which are undertaken by Nisa Retail StoreIn the accounting criteria or concept, there are generally two approaches involved whichare such as management and financial. Such both accounting systems are highly helpful andsupportive for the cited company in terms of resolving internal and external problemsrespectively. The system which includes in the company in procedure of decision making,devising the prepared schedule and plan as well as give financial report to the expertise is calledas management accounting. It helps in order to control over the costs which are not useful andunproductive for the business process (Takeda and Boyns, 2014). Due to this condition, NisaRetail Store able to command over the expenses and generate highly positive profit which will besign of enhancing business performance. Through this system issues as well as deficiencies aboutthe financial aspects are to be identified which comes into circumstance within workplace.Therefore, it can be said that, management accounting is one of the significant as well aseffectual kind of element for every organisation in order to raise financial health.In the management accounting criteria, there are varied systems and approaches includedwhich required to Nisa Retail company in different departments. Those systems which are1

considered by the chosen business firm are along with its essential requirements describedbelow:Cost accounting system-The system of management accounting like cost under which different number ofexpenses generated in the business of retail store are included. At the time of manufacturingretail goods and services various costs like purchasing raw materials, equipments, electricity,staff etc. included. Apart from this, administration, inbound and outbound supplyingexpenditures, marketing etc. are also analysed in this particular system. At the time of sellingproducts and services the company hire marketing experts to whom salaries and wages are givenby Nisa firm which is one of cost for the firm (Chan, 2015). Moreover, to do advertising andpromoting of new retail goods and services the firm has to make expenses which are recorded incurrent system. It can be said that, overall costs and expenditures made by the Nisa Retail entityare included in this system which is supportive in terms of making calculation of total costs.Therefore, cost of every product and service along prices ascertained easily through costaccounting system. Inventory or stock management system-Stock is one of the crucial part of each and every company and when it increases in theworking environment then reduce sales generation capacity in the industry. Further, it can beclearly said that inventory leads to direct impact on revenue and profitability of the entity whichadverse situation. Therefore, it is mandatory to manage and reduce stock level in the firm and forthat inventory management system is the best tool. It helps to analyse stock conditions andquantities through which judgement for further production are taken by management of NisaRetail firm (Klemstine and Maher, 2014). Basically it is supportive to entity in terms ofevaluating stock using main three methods of inventory. The techniques and procedures formaking assessment of stock are such as LIFO, FIFO and Weighted Average method. Here LIFOstates for Last in first out where products which are prepared at the last time are sold firstly.FIFO indicates to the First in first out which is totally opposite of the previous technique. In thesecond method for selling preference is given to those products which are produced firstly. Job costing system-2

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