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Management accounting system and its use in Imda Tech

   

Added on  2020-01-07

13 Pages3745 Words66 Views
MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Functions and importance of management accounting ....................................................3P2 Management accounting system and its use in Imda Tech...............................................5TASK 2 ..........................................................................................................................................6P3 Income statement of Imda Tech........................................................................................6TASK 3............................................................................................................................................8P4 Planning tools and pricing strategies related to Imda Tech..............................................8TASK 4..........................................................................................................................................11P5 Balance score card approach ..........................................................................................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13

INTRODUCTIONManagement accounting consists of the financial information, risk factor andperformance of the company. It is Important for Imda Tech (UK) Limited to implementeffective system (Brandau and et. al., 2013). This company is dealing in mobile charger andother gadgets. Company has faced the issue that was due to lack of financial information so it isrequired for the company to adopt effective system that can help to over come such difficulties.There are many methods of management accounting that can be used by company as Costaccounting system, Inventory management system, job costing and price optimising system.TASK 1P1 Functions and importance of management accountingManagement accounting: It covers identification, analyzing and communication ofinformation. It helps to take effective decisions in the business to achieve goals and objectives. Itprovides helpful information regarding the financial, risk associated with operation, strategicmanagement, performance of company in the market so that effective decisions can be taken. Financial accounting: It is used to prepare financial statement. Company requires to appointsuch personal who are expert in their field to prepare financial statement. There is specific formatof financial statement that is required to follow (Otley and Emmanuel, 2013). The user of suchinformation are internal and external parties. Following are the distinguish between management accounting and financial accountingManagement accountingFinancial accounting It covers various content as related to risk,performance, strategic management. It covers only financial information.It is not mandatory for the company to prepare.It is mandatory to prepare.Its main objective is to make the effectiveplanning and decisions. The main objective is to provide financialinformation to the outsider.There is no timing to prepare. It can beprepared at any time. It is required to prepare at the end of financialyear.The audit of management accounting is notcompulsory.It is required to make the regular auditing offinancial accounts.Following are the functions of management accounting

1)Planning: It is crucial part of every organisation. It consists of the information of varioussector so it is easy to make the planning. It covers information as financial, strategicmanagement, performance, risk so it is easy to make the planning.2)Organising: It is the process in which task is allotted to the employees of the company. Itis the important part because in this, it is required for the management to allot the taskaccording to the strength of the employee (Amidu, Effah and Abor, 2011). 3)Decision: Management accounting helps to make the decision because it provides variousinformation. It is very helpful agent to provide information to the management so thatthey can make the decision. 4)Controlling: It is required for the organisation to make the control over the affairs. Whenrelevant information is provided then it is helpful to implement the effective controlmechanism.Importance of management accountingIt is important tool that provides help to management to make the effective decisions. Importanceof management accounting are as follows:-1.To find out goals and objective: It helps the organisation to make the effective decisions.It provides various information to the management so it is better to decide about the goaland objectives.2.Formulation of plan: When management has required information then it is easy for themto make the effective planning. Management accounting plays very important role informulation of plan (Brandau and et. al., 2013).3.To provide services: Management accounting consists of the information regarding theperformance of the company so it is easy to check that are the customers happy with theservices so that better services can be provided. 4.Increase efficiency of business: management accounting plays an important role toimprove the efficiency. Because it helps to take decision so that when such areimplemented then it improves the efficiency.P2 Management accounting system and its use in Imda Tech.It plays an important role in the decision making because it consists of variousinformation as related to financial data, performance of company, strategic management, riskfactors that are related to operation of the company.

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