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P1 Management accounting concept and its essential requirements

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Added on  2020-12-24

P1 Management accounting concept and its essential requirements

   Added on 2020-12-24

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Management Accounting
P1 Management accounting concept and its essential requirements_1
ContentsINTRODUCTION.................................................................................................................................3TASK 1.................................................................................................................................................3P1 Management accounting concept and its essential requirements..................................................3P2: Different types of managerial accounting reports and their importance......................................6TASK 2.................................................................................................................................................7P3: Calculation of cost and preparation of income statement............................................................7TASK 3...............................................................................................................................................10P4: Different kind of Budgets and their merits and demerits...........................................................10TASK 4...............................................................................................................................................12P5: Use of management accounting to respond financial problem...................................................12CONCLUSION...................................................................................................................................16REFERENCES....................................................................................................................................17
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INTRODUCTIONManagement accounting play a valuable in helping management to make an effective decision and suitable plans to execute future business activities in such an effective manner that will help in getting profitable result in near future. The manager of accounting department are held liable to prepare financial statements which includes balance sheet, Profit& Loss a/c, Cash flow statement with the help of collecting information available through various management accounting system. The present assignment report is based on Tech (UK) Ltd. which is engaged in providing special charger for mobile telephones and other various gadgets for the retail outlets. The project includes the comparison between management and financial accounting along with the benefits of management accounting and different reporting systems. Financial tools which help in resolving financial issues faced by company during accounting period are also covered under this report (Garrison and et. al., 2010).TASK 1P1 Management accounting concept and its essential requirementsManagementaccounting: One of the important system which is used within the organisation is to record the performance of different departments. It is big concept which includes the provision of cost and managerial accounting. Application of the provisions of different systems provides financial and statistical data which improves the decision making power of internal parties to make their organisational activities more effective and efficient. Ithelps the organisation is to accomplish their objectives within given period of time frame. Through implementation of management accounting systems large number of benefit are ascertained by Tech (UK) Ltd. Like risk management, planning of future actions, appraisal ofperformance of employees etc.Difference between management and financial accountingManagement accountingFinancial accountingBehind the application of the conceptsmanagement accounting is to make thedifferent kind of reports according to theperformance of departments for the purpose ofoperating different organisational activitiesThe main objective behind the application ofthe methods of financial accounting is to assessthe financial position of organisation.
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smoothly.It contributes in formulation of future plans toaccomplish desired objectives andimprovement of the decision making ofinternal partiesThis can be further used by the external partiesto make decisions regarding investments withinthe organisationThese accounts are formulate as per the needsof organisationIt is prepared at the end of the year to analysethe profit and loss of organisation. It is used regarding assessment of performanceof each and every departmentThis will helps in assessment of the financialperformance of whole organisationImportance of management accountingAppraisalofperformance: One of the important function in which these systemcontributes their efforts includes appraisal of the actual performance of employeesthrough comparison with standards. Different budgets are prepared as per using theprovisions management accounting which contains standards. This comparison helpsto identify the deviations and providence more accurate solutions to attain desiredresults.Formulationoffutureplans: There is huge role is played by the managementaccounting to make the better future plans. This will be possible because use ofmanagement accounting provisions helps to gather information from the differentdepartments. On the basis of such information future strategies are formulated whichdirects the employees of organisation.Determinationofaim: The management of organisation uses the information to settheir targets and objectives which are need to achieve through their businessfunctions. These targets are set through identification of the working capacity of eachand every department of organisation. Assessmentofrisks: Application of the management accounting systems not onlyhelps in identification of the risks which are faced by the organisation while providingtheir activities but also helps to assess the future risks which are associated with thebusiness transactions (Fullerton, Kennedy and Widener, 2014). It provides theopportunity regarding formulation contingency provisions.Different management accounting systemsThere are different management accounting systems with having different roles and functions within the organisation. There are many benefits are achieved by organisation
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