Management Accounting: MAS and Financial Accounting Comparison

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................6
TASK 3............................................................................................................................................8
TASK 4..........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
In the business context, the process of accounting that is related with collecting
quantitative financial and business information into separate accounts so that day to day decision
are made is known as management accounting. It is related with gathering, reporting,
formulating of useful business report which enables manager to take valid decision in order to
improve the business performance. By using internal report, internal manager use to identify the
financial performance and profitability of company and make cosine report in order to make
further improvement. To better recognise the importance of MA topic Excite enterprise have
been selected which is located in UK.
In this report, several kind of management accounting system with its main advantages
and reports are discussed. Costing method is also elaborated in this project which help in
preparing annual statements and extract net profit. Apart from this different planning tools with
pros and cons and support in budgetary control is stated. With the support of different system
company is able to resolve the situation of financial problem.
TASK 1
Section A
(a) Assessment between MAS and Financial accounting.
Management accounting: Financial or non-monetary data in corporate reporting is
being used by bookkeepers throughout this type of accounting.
Financial accounting: In this kind of accounting the processing of various financial
reports provided to outside investors so that they can get the financial information about
company within reporting year (Smith, 2015).
Comparison:
Basis Management accounting Financial accounting
Legal
requirement
The preparing of management
accounting documents is not legally
required.
It is a legal requirement in terms of
financial reporting for investors to
formulate financial reports.
Types of data
used
Economic or non-financial information
is used in management reporting.
On the opposite, just financial
information is used to prepare authentic
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report.
Format of
presentation
The MA documents are not delivered in
any specific format.
Accountant must file financial
statements by considering IFRS
regulated particular format.
Timing In this accounting reports are frequently
issued as manager needs specific
information on each aspect of business
to make proper decision.
This accounting requires financial
statements to be published as the end of
accounting year to determine overall
financial strength.
System In management accounting manager use
to look into the every system of
different operation so that ways can be
made to improve the overall profit of
company.
Manager under financial accounting
consider the system that company used
for making profit.
Valuation This method consider the value of items
that only increase the productivity of
company.
It includes different impairments in
order to address the proper valuation of
assets and liabilities.
Various types of MAS:
(b) Cost accounting system:
This accounting system is associated with the cost forecasting method for different tasks
and procedures within company. Cost system primarily helps to control and decrease
expenditures of companies. Therefore, businesses are primarily expected to distribute the
monetary resources for company according to the projected costs of the various activities
(O’Grady, Morlidge and Rouse, 2016). This system mainly includes various types of costing
like direct, standard costing, etc. Standard expenses involve the absorption costing structure
where both kinds of expenses are assumed to be unit costs.
Whereas, direct costs consider marginal costs in which only the variable costs are considered as
manufacturing costs. This system assists businesses to maintain efficient spending control.
Excite limited is using that accounting system for the purpose of controlling the expenses of
operations in the context of entertainment services For example, absorption costs are valuable in
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