Management Accounting and Its Significance - Report

Added on - 22 Jul 2020

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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION..........................................................................................................................1TASK 1...........................................................................................................................................1P1: Management accounting and its significance.......................................................................1P2: Different methods which are used by managers in an organisation.....................................3M1: Benefits of accounting system and it utilities.....................................................................4D1: Critically evaluate accounting reporting..............................................................................5TASK 2............................................................................................................................................5P3: Use of various costing methods by the company.................................................................5M2: Analysis of various accounting method used by the company............................................7D2: Interpretation of above profit and loss statements...............................................................7TASK 3............................................................................................................................................7P4 Merits of tools used for planning in budgetary control..........................................................7M3: Planning tools analysis for the company.............................................................................9D3: Ways to overcome financial problems through effective planning tool..............................9TASK 4..........................................................................................................................................10P5 Response to financial problems...........................................................................................10M4: Financial problem analysis................................................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONManagement accounting is responsible of providing both financial as well as nonfinancial information of the cited company. It involves participation of management decision,devising and performing critical analysis of transaction (Chen and et. al., 2011). In other words,it is said to be a field of accounting that delivered economic and financial data for managers andother internal users. In every organisation there is huge responsibility over a managers to controland maintain financial records into accounting books of accounts. The project report iscategories into various tasks which consist of management accounting use and its importance isdaily business activities.The several methods which are used by concern person in preparing accounting reports.There are some other aspects of this the project which summarise the costing techniques that areused by the company under their businesses. Benefits and limitation of budgets or how they areuseful in planning procedure of financial statements (Goyal, 2014). It also covers all thosefinancial issues which are arise in an organisation and tools which are used by managers toovercome all those issues are discussed under this project report. In the last phase of projectexplains about comparison of financial position of one company with the another one in order toachieve its aims and objectives.TASK 1P1: Management accounting and its significanceIn an organisation accounting is said to be recoding, summarising and evaluating thefinancial data into company's books of account. While, management is responsible for managingbusiness transaction into perfect order so that positive results can be achieved by the company.Through this, company can have the opportunity to make future plan and take appropriatedecision to increase profitability of the company. This accounting system helps the citedcompany's to allocate right kind of people at the right place. So that more effective results can bepossible in quick time. As it has been found that management of financial statements are one ofthe major concern for the company's.With the help of statistical data regarding other competitive forces can help the companyto manage the plan accordingly. In order to know the performance of the company managers useto prepared daily, weakly reports. It will help to analyse the total cost incurred by the company1
during its daily operations. The most effective aspect of this accounting system is that, it providetimely and more reliable results to the board of directors. Every business concern is responsiblefor determining a perfect plan accounting system in order to achieve it objectives. It is importantfor the company to increase its sales and to generated maximum profit. In previous time,management is not aware about various functions that is why they are not able to meet out itsplan in proper manner. Now, in present era the concepts are changes because of new accountingsystem. The most effective system the management need to apply in its business plan is todetermine the actual need of that particular accounting system.The company need to identified its operational cost and tried to overcome it. By the useof management accounting system business person can determine their fiscal sources and alsoestablished total required capital to manage its activities (Bodie, 2013). 4COM plc is thatcompany which is operating at a small scale level in order to established its accounting system.For the effective planning managers need to use this accounting system so that extra costs can becontrol and company can earn maximum profit. The overall decision are taken through thissystem. There are some of the techniques which are used by the company during preparation offinal account. Different types of managemet accoutning systems used by the managers are asfollows:Job costing:It is a system of cost accumulaton and recording of transactions where thereis an well known activity for whcih cost are considered. It is used at at the time whenproduction is not highly repretitive and in addition, consists of different lots and orders.Cost accounting system:It is used to identify with the recording, classifying andsummaraising cost those are incurred in the development of products and services. It isdone to control costs and furnishing of data to management for taking effective decision.Price optimisation system:It is considered as one of the crucial tool for 4COMcompany which they used in order to analyse price sensitivity regarding their productsand services. It is based on the concept that how customer react over various prices whichare charged by the company for their products.Inventory management system:It is said to be that system of accounting which is usedby the company to manage and control its stocks. The timely supervision of the stocks arerecorded and maintain so that if any demand comes to the company it would fulfilaccordingly.2
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