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MANAGEMENT ACCOUNTING INTRODUCTION

   

Added on  2021-02-19

17 Pages3111 Words378 Views
MANAGEMENTACCOUNTING
MANAGEMENT ACCOUNTING INTRODUCTION_1
MANAGEMENT ACCOUNTING INTRODUCTION_2
INTRODUCTIONMA is an accounting which is based on monetary and non monetary information whichhelps in internal management of the companies (Serena Chiucchi, 2013). Eventually, thisaccounting system is applied without considering any accounting period and concepts. Theorganisations implement it as per their needs. To understand in broad sense about the MA, Alphafinancial consultancy company has been chosen that provides consultancy services to differentcompanies which operates in manufacturing, construction etc. In the report their client companyis Sewport that operates in manufacture of clothes. Additionally, in the project report the firstscenario defines about different accounting systems and reports as well as it covers differentcosting methods to prepare financial statements. While the second scenario includes differentkind of planning tools and role of MAS in response to financial problems.TASK 1.P1. Introduction to management accounting.Management accounting- The MA is a typical part of accounting which is associated withproviding the financial information and suggestions to the companies for the purpose of effectiveplanning (Lindholm, Laine and Suomala, 2017). The above company applies this accounting forintegral management.Management accounting system- MAS is a field of accounting that gather company'squantitative and qualitative information for preparation of reports. The main purpose of thesereports is to helping the managers of companies to take suitable decisions. Role of alignment of accounting systems to companies: Various accounting systems ofmanagement accounting are very important because each of them have their own role. Like thejob costing system is useful in calculating the cost of job separately as well as inventorymanagement system is integrated with the solving the issues of stock management. Along withthe price optimisation system helps in determining the prices. Such as in Sewport they use theseaccounting systems for purpose of effective management of cost regarding to jobs as well as forbetter stock management of cloths. Origin, role and principle of MAS:
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Origin- The term management accounting system was evolved by cost accountingtechniques which was developed in England during revolution of industry (Stechemesser andGuenther, 2012). Principles - The MAS is based on different principles such as influence, relevance, valueand trust. These principles are needed to be implemented for management accounting system. Distinction between financial and management accounting system:BasisManagement accounting systemFinancial accounting systemInformationThis accounting system consistsboth kind of accounting informationsuch as quantitative and qualitativeinformation. While this contains only financialinformation.AccountingprinciplesThe management accounting doesnot follow any accounting principleand conceptsThis accounting system is implemented asper the accounting period and concepts.CompulsoryIt is not necessary for the companiesto apply this accounting system.On the other hand, it is essential for thecompanies to adopt this accountingsystem.Different type of MAS- The MA includes a wide range of accounting systems and some ofthem are mentioned below:Cost accounting system- It related to computing total cost of different activities.Eventually, it is important for controlling and managing overall cost. Such as in theSewport company, this system is important for in analysing cost of their differentoperations.Job costing system-It is related to the computing cost of job associated in of activities(McVay, Kennedy and Fullerton, 2016). This helps in provide information about howmuch cost is occurring in the process of job of various functions. In Sewport company,they applies this accounting system is guidance of their consultancy company for thepurpose of getting information about job cost.
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