(PDF) Introduction to Management Accounting - Assignment

Management Accounting
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Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1: Management accounting and requirement of its systems................................................1
P2: Different types of management accounting reports.........................................................4
M1: Importance of different management system..................................................................5
D1: Various reporting method and accounting system integration........................................6
TASK 2............................................................................................................................................6
P3: Techniques used to analyse cost with marginal and absorption costs.............................6
M2: Analysis of various types of accounting tools and techniques.......................................9
D2: Analysis of data collection..............................................................................................9
TASK 3............................................................................................................................................9
P4: Different planning tools used for budgetary control........................................................9
M3 Analysis of various planning tool and its application for forecasting...........................11
TASK 4..........................................................................................................................................12
P5: Different financial tools to resolve company's financial issues.....................................12
M4 Analysis of planning tool to deal with financial issue...................................................13
D3: Evaluation of planning tools for accounting respond appropriately to solving financial
problems...............................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Management accounting is an analysis and communication of relevant and useful
information collected with the help of financial and cost accounting to the management of an
organisation. It assist them to make profitable decision and effective policies for the company
and bring them ahead in the competition among their rivals in the market. It performs various
activities such as creation of budget, perform asset, cost management and preparation of various
reports. The present assignment is based on the case study of Ever Joy Enterprise which is
engaged in leisure and entertainment industry in UK. The company as approached Deloitte UK
which is one of the leading professional services network deals in providing financial advisory to
prepare a draft for their management accounting department. The report describes the various
accounting systems in addition with their essential requirements, management accounting
reporting systems along with their benefits, different methods of costing, planning tools to
control budget and financial tools to resolving financial issues of an organisation.
TASK 1
P1: Management accounting and requirement of its systems
Management accounting:
It refers to an activity of analysing and interpreting relevant and useful informations of all
departments to formulate an effective plans and policies to achieve organisational goals and
objectives. It assist management to make decisions on daily basis through properly examining
the management report and financial accounts that are prepared on timely basis (Callahan, Stetz,
and Brooks, 2011).
Financial accounting:
Financial accounting refers to an activity of preparing financial statements of an
organisation such as Profit & Loss a/c, Balance sheet, Cash flow statement etc. which determines
the actual and accurate financial position of company. It helps outside parties to an organisation
such as investors, creditors and industry regulators to make decisions regarding making further
transactions with company.
Difference between Management accounting and Financial accounting:
Particular Management Accounting Financial Accounting
1

Objective The principle objective of
management accounting is to
help the managers in making
profitable decisions and
suitable planning.
The main objective is to enable
outside parties of an
organisation to make decision
further investment in company
through presenting financial
statements towards them.
Information It provides the qualitative and
quantitative information’s.
It only provides the
quantitative information.
Time The reports are prepared
according to the organisational
needs.
As financial reports are
prepared at the end of financial
year.
Users This report containing
information can be utilised
only by the internal
management.
These financial reports
containing informations related
with financial transactions
made by company can be
utilised by both internal and
external parties.
Publishing and auditing These reports are neither
published by the organisation
nor audited by auditors.
It is compulsorily required to
be published and audited by
the statutory auditors.
Management accounting can be more useful for 'Ever Joy Enterprises' in terms of making
an effective and profitable decisions by management through examining the informations of all
departments. It is the process of making possible efforts in cutting out the necessary expenses
which in turn increasing profitability of company. Management accounting involves different
activities to perform such as designing of budgets and trend charts so that allocation of cost to
different departments can be easily made (Dražić Lutilsky and Dragija, 2012). To prepare
various reports, different management accounting systems should be adopted by management of
'Ever Joy Enterprises' which are mentioned as under:
2