Management Accounting: Types of Systems, Costing Methods, and Reporting Systems

Management Accounting

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
P1: Various types of management accounting system and their importance......................................3
P2: Different types of management reporting system........................................................................5
M1: Benefits of using management accounting system.....................................................................6
D1: Critical evaluation of accounting reporting systems...................................................................7
TASK 2.................................................................................................................................................7
P3: Various types of costing methods which are use for calculating net profit..................................7
M2: Effective use of management accounting tools and techniques................................................11
D2: Evaluation on the basis of data collected from business activities............................................11
TASK 3...............................................................................................................................................12
P4: Advantage and disadvantage of budget.....................................................................................12
M3: use of various planning tools....................................................................................................13
D3: Critical analysis to overcome financial issues...........................................................................13
TASK 4...............................................................................................................................................13
P5: Effective use of accounting systems to resolve financial issues................................................13
M4: Analysis of financial problems.................................................................................................14
CONCLUSION...................................................................................................................................15
REFERENCES....................................................................................................................................16

INTRODUCTION
Nowadays, it has been seen that plenty of organisations are looking for an effective
system that can assists them to record various accounting transaction in their respective
format. The primary aims and objective of an organisation is to attain their long and short
term goals that are being set by company for betterment of future. The main role of managers
is to record their financial transactions in more effective manner so that goodwill of the
company can be attain in more quick time (Wickramasinghe and Alawattage, 2012).
The project report provide various information about different types of accounting
systems and reporting that are helpful in recording of the data in more reliable manner.
Further, this report would use various costing methods that are effectively responsible for
evaluating net profit of Tech Imda ltd. Merits and demerits of planning tools for controlling
budgets are explain under this. Examination of certain types of financial issues and their
effective measures to overcome those issues is discussed under this project.
TASK 1
P1: Various types of management accounting system and their importance
In accordance to increase profitability, it is necessary to make use of effective
accounting tools that are responsible for garneting more valuable results to the company. In
every business whether small or large they need to collect, summarise and evaluate financial
transactions through using effective accounting systems. Administration is always in research
for all those matters which are necessary for increasing productivity of Imda tech Ltd. It is
necessary operation of management to make use of appropriate accounting information for
the purpose of making effective decision making near future.
The management need to make proper planning, organising and communicating every
department works to analyse whether they are operating in right manner for the growth of the
company. While accounting is said to be a systematic recording of financial data that is being
use for the purpose of analysing future profitability of the company. Management accounting
is one of the most important aspects as a profession which include manager for partnering in
effective company to make future decision making. This is an effective technique of business
performance analyses in order to prepare internal accounting statements (Lavia López and

Hiebl, 2014). This will assists accountant to take crucial decisions according to their set aims
and objectives.
Basis Management accounting Financial accounting
Concept According to these specific
accounting systems which is being
provided as crucial information to
the managers to make vital plans for
their upcoming projects.
Under these accounting systems, it
will be assessing entire focus on
formulation of organisation strategies
to various interested parties.
Essential It is not essential for the department
to make entries of all data for the
company.
It more significantly need to be
followed by managers before making
any financial reports.
Purpose The primary objective is to make
proper planning and to make vital
decision by delivering effective
detail information to the department.
Under this accountant need to prepare
financial data for presenting it in front
of various stakeholders.
Format There is no need to make any
particular format for recording of
transactions.
It is utmost important for every
business enterprises to prepare
financial transactions in more specific
format.
Different types of accounting systems:
There are several accounting systems that can be helpful for an organisation to
evaluate their regular financial transactions that are done during the period of time. Few of
them are elaborated underneath:
Cost accounting system: This happens to be utmost important tools through which company
can more easily locate and determine their actual costs that are incur over the production of
products and services. These are directly or indirectly make impacts of manufacturing
process. Some essential costs associated during that time are normal, standard and actual.
Inventory management system: according to the account officers, it is essential for the
company to keep regular record of their stock by using appropriate accounting systems. This
assists in determining total flow of stock within a set duration of time. Through effective use
of such system overall bills, detail record of invoices and inventory related transactions are
analyse accordingly.