Management Accounting and its Systems

MANAGEMENT
ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Management accounting ............................................................................................................3
TASK 2............................................................................................................................................5
Management accounting system and its internal systems ..........................................................5
TASK 3............................................................................................................................................6
Use of management accounting reporting...................................................................................6
TASK 4............................................................................................................................................8
Definition and calculations ........................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
There are a number of accounting approaches in financing that are being applied in their
activities by company organizations. The word Management Accounting (MA) may be explained
as a kind of accounting methodology by providing financial and non - financial details in which
internal reports are generated. This method is commonly used for businesses engaged in
industrial operations. The project report is based on Dell incorporation which operates its
operations in the process of making personal computers. This company is a leading in the aspect
of computer manufacturing and selling. In current time company is facing issue which is that
they are unable to know whether they should personal computers or not. For this purpose,
different types of tasks are covered under project report. The report covers information about
Management accounting systems (MAS), reports as well as some calculations are also carried
out.
TASK 1
Management accounting
Definition of MA:
MA is also known as systematic accounting which can be described as a method of supplying the
managers with financial details which resources while making decisions. MA is utilized
primarily by the organization’s management department, so that is the one aspect that renders it
distinct from financial reporting (Azudin and Mansor, 2018 ). Through this phase, tax
information and documentation including payroll, annual balance sheets are exchanged with the
management team committee by operational budget. This accounting approach is completely
different from financial accounting (FA) due to serval reasons which are mentioned further. It
can be applied in the Dell computer corporation so that they manage their financial and non-
financial information in a systematic manner.
How MA is distinct with FA.
There is numerous variation between both accounting methods because each of them is being
applied in a specific manner in operations of companies. Below difference between both
accounting is mentioned in such manner:
Basis MA FA
Information Under this form of accounting, In FA, only those transactions’

included information about monetary and
non-monetary transactions are
included.
information is contained which is
related to monetary transactions.
Compulsory This accounting is not essential for
companies to implement even they
are listed in any stock exchange.
FA is mandatory for those companies
which are listed in any specific stock
exchange.
Outcome In MA, internal reports are
produced in accordance of need of
business.
Under FA, various types of financial
statements are prepared including
P&L, balance sheet etc.
Auditing It is not essential that internal
reports produced under this
accounting need to be audited.
While in this accounting, it is
necessary to do auditing of prepared
financial statement before presenting
to stakeholders.
Users of MA information:
As per the above discussion, this can be inferred that MA is mainly useful for internal
stakeholders because they utilize key information form it. Below some key users of this
accounting are mentioned in such manner:
 Management department- In a particular company, management department is one of the
key department whose responsibility is to manage all tasks and activities in an effective
manner. In order to do so they need key information which can be derived via internal
reports produced under MA. In the context of Dell company, they use this information for
better decision making.
 Top level management- the management accounting is also used by the top level people
of management for taking the correct and right future decisions for the company (Bedford
and Speklé, 2018). The management accounting contains the financial information about
the company, the top level people review these information and data and then they
evaluates the financial and management soundness of the businesses.
 Policy makers: The people who forms the policies or rules for the organisation also needs
the management accounting information. In this actual information and the statistical data
is been analysed and evaluated by these people so that they can make the objectives and
goals for the company in a appropriate manner.