(solved) Essay on Management Accounting
Added on -2020-07-23
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MANAGEMENT ACCOUNTING
TABLE OF CONTENTSP1. Explain management accounting and give the essential requirements of different types of management accounting systems...............................................................................................3P2. Explain different methods used for management accounting reporting..............................4................................................................................................................................................5P3 Preparation of income statement by using marginal and absorption costing........................5REFERENCE.............................................................................................................................9............................................................................................................................................9
P1. Explain management accounting and give the essential requirements of different types of management accounting systemsManagement accounting is the process by which financial statistical information are put together. Management accounting is used to produce reports annually which are used by managers on a day to day basis to make decisions for the company.Cost analysis in a company day to day decisions need to be made. For example acompany is unsure where to focus and how to sell their products etc then they need tosee the financial side of their business. This is where management accounting helps infinancial decision making.Management accounting provides a data-driven look at how to grow a small businessbudgeting. Management accounting is very beneficial to a company in providing thefinancial side of the business which helps the company to always improve theirbusiness by making decisions and changes.Inventory accounting systems are used to plan and track inventory levels andinventory related activities. One of the most common inventory system is bad codetracking this is where each of the item is tagged with a bar code. As the inventoryitems are brought into a warehouse the bar codes are scanned to add or subtract frominventory. Bar code systems can be also used to track for and account for items asthey are moved around the warehouse.Industry-specific accounting- Accounting systems also include industry-specificapplications. A retail accounting system, for example, has different requirements thanin other industries. Sales are captured at the point of sale using computerized point-of-sale cash registers. When items go on sale, the retail accounting system must trackand properly report on merchandise markdowns. Legal accounting software has otherspecific requirements as well, including the tracking of time spent by attorneys, dollaramount of time billed out based on an hourly rate and the utilization rate of eachattorney.The benefits of management accounting systems Management accounting is very beneficial to every business JJD gets many benefitsfrom management accounting management accounting. Management accountinghelps JJD carry out planning for its future. Management accounting reports contain
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