Evaluation of Management Accounting Tools and Techniques

   

Added on  2020-06-05

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Management Accounting
Evaluation of Management Accounting Tools and Techniques_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Various types of management accounting system and their importance..............................1P2: (1): Different types of management reporting system..........................................................4M1: Benefits of using management accounting system..............................................................6D1: Critical evaluation of accounting reporting systems............................................................6TASK 2............................................................................................................................................6P3: Various types of costing methods which are use for calculating net profit..........................6M2: Effective use of management accounting tools and techniques........................................12D2: Evaluation on the basis of data collected from business activities....................................12TASK 3..........................................................................................................................................12P4: Advantage and disadvantage of budget..............................................................................12M3: use of various planning tools.............................................................................................14D3: Critical analysis to overcome financial issues........................................................................14TASK 4..........................................................................................................................................14P5: Effective use of accounting systems to resolve financial issues.........................................14M4: Analysis of financial problems..........................................................................................15CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
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INTRODUCTIONNowadays, it has been seen that plenty of organisations are looking for an effectivesystem 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 thatare being set by company for betterment of future. The main role of managers is to record theirfinancial transactions in more effective manner so that goodwill of the company can be attain inmore quick time (Wickramasinghe and Alawattage, 2012). The project report provide various information about different types of accountingsystems 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 netprofit of Tech Imda ltd. Merits and demerits of planning tools for controlling budgets are explainunder this. Examination of certain types of financial issues and their effective measures toovercome those issues is discussed under this project.TASK 1P1: Various types of management accounting system and their importanceIn accordance to increase profitability, it is necessary to make use of effective accountingtools that are responsible for garneting more valuable results to the company. In every businesswhether small or large they need to collect, summarise and evaluate financial transactionsthrough using effective accounting systems. Administration is always in research for all thosematters which are necessary for increasing productivity of Imda tech Ltd. It is necessaryoperation of management to make use of appropriate accounting information for the purpose ofmaking effective decision making near future. The management need to make proper planning, organising and communicating everydepartment works to analyse whether they are operating in right manner for the growth of thecompany. While accounting is said to be a systematic recording of financial data that is being usefor the purpose of analysing future profitability of the company. Management accounting is oneof the most important aspects as a profession which include manager for partnering in effectivecompany to make future decision making. This is an effective technique of business performance1
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analyses in order to prepare internal accounting statements (Lavia López and Hiebl, 2014). Thiswill assists accountant to take crucial decisions according to their set aims and objectives.BasisManagement accounting Financial accountingConceptAccording to these specificaccounting systems which is beingprovided as crucial information tothe managers to make vital plans fortheir upcoming projects.Under these accounting systems, itwill be assessing entire focus onformulation of organisationstrategies to various interestedparties.Essential It is not essential for the departmentto make entries of all data for thecompany.It more significantly need to befollowed by managers beforemaking any financial reports.PurposeThe primary objective is to makeproper planning and to make vitaldecision by delivering effectivedetail information to the department.Under this accountant need toprepare financial data for presentingit in front of various stakeholders. FormatThere is no need to make anyparticular format for recording oftransactions.It is utmost important for everybusiness enterprises to preparefinancial transactions in morespecific format.Importance of using management accounting information: ABC costing: It seems to an effective accounting method which is used to determineactivities that a company perform and allot indirect cost to a products. It would assign productionoverhead costs to produce in more specific manner than the traditional method of allocatingcosts.Relevant costing analysis: Such kind of cost evaluation is related with managementdecision and make alteration as per the future outcomes. This analysis is most important toreduce the implication those are affecting the profitability of an organisation.Evaluation of useful information: It is another importnat aspects for every managers toprovide data that is being use to develop appropriate strategies in order to make vital decision innear future time.Different types of accounting systems:2
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