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Preparing Income Statements for the Department of Management Accounting

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Added on  2020-02-03

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Importance of management accounting information as the decision making tool for department managers 5 b) Different types of management accounting system and its use for departments to improve their reports 6 TASK 26 Preparing the income statements for the month of September using the absorption and marginal costing methods 6 TASK 39 |Providing the written report on planning tools 9 a) Different types of budgets and their advantages and disadvantage of 9 b) The process of preparing the budgets 10 c) Pricing strategies 10 TASK 411 (a) Balance

Preparing Income Statements for the Department of Management Accounting

   Added on 2020-02-03

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Preparing Income Statements for the Department of Management Accounting_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................4TASK 1............................................................................................................................................4a) Preparing report on the function of management accounting..................................................4I. Definition of management accounting and distinguish management accounting fromfinancial accounting ....................................................................................................................4ii. Importance of management accounting information as the decision making tool fordepartment managers...................................................................................................................5b) Different types of management accounting system and its use for departments to improvetheir reports..................................................................................................................................6TASK 2............................................................................................................................................6Preparing the income statements for the month of September using the absorption andmarginal costing methods............................................................................................................6TASK 3............................................................................................................................................9Providing the written report on planning tools............................................................................9a) Different types of budgets and their advantages and disadvantage.........................................9b) The process of preparing the budgets....................................................................................10c) Pricing strategies....................................................................................................................10TASK 4..........................................................................................................................................11(a) Balance score card approach and describing the its implement of a balanced scorecard ...11i. Using Balance Score Card (BSC) to identify and respond financial problem........................11ii) Use of Balance Score Card to improve the financial governance and development ofeffective strategies.....................................................................................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
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INTRODUCTIONThe management accounting refers to the procedure of handling the cash related activitiesand reporting regarding different department of the business so as to manage varied activitieseffectively for controlling the expenses. The present report is based on Imda Tech Ltd whichdeals in special charger for mobile telephone and other carry on gadgets for retail outlets in UK.The report covers aspects related to functions of management account along with its importanceand varied management accounting systems. Furthermore, income statement have been preparedin accordance with the absorption and marginal costing. In addition to this, different types ofbudget and process of preparing the budgets have been explained. Moreover, financial problemswhich are being faced by the business are identified and accordingly effective strategies aredeveloped to resolve the situation effectively.TASK 1a) Preparing report on the function of management accountingThe functions of management accounting are explained as follows with the explanationof different kind of aspects associated with the same. It helps to conduct the operational activitieseffectively and manage the performance of the business in the right manner. It has beenunderstood with the help of definition of the management accounting and its different from thefinancial accounting (Fullerton, Kennedy and Widener, 2014). Management accounting helps totrack the expenses of the firm and increase the profitability through the proper record keeping.I. Definition of management accounting and distinguish management accounting from financial accounting The process of management accounting consists of aspects such as estimating, collectingand preparing the management accounting information for taking the suitable decision for wellbeing of the business. It is helpful for taking the decision on daily business and controlling thebusiness activities effectively so as to meet the objectives of the business in the right manner(Chenhall and Moers, 2015). Financial accounting basically deals financial statements which arerotated to the lenders and stockholders. On the other hand, management accounting deals withinternal information management system so as to meet the requirement of all respective
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department of the business. The Imda Tech Ltd get support from management and financialaccounting in the following manner- Management accountingFinancial accountingCollected information from the financialaccounting is used for management accountingMonitored transactions is the base of thefinancial accountingAids in taking decision through planning,controlling and handling the operation of thebusiness (DRURY, 2013). Aids in getting the financial statementspublishedThere is not any mandatory rules but theinternal focus is doneThe GAAP is considered for preparingfinancial statements along with external focusThe financial and non-financial information arecollected through subjective informationThe historical data are taken into account forpresentation of information. Future performance of the business can beconsidered in accordance with the historicaldata.The information is summarized for the purposeof taking right decision of the business(Sundem and et. al., 2014).ii. Importance of management accounting information as the decision making tool for department managersThe information collected from management accounting is used for taking the rightdecision for the business. Management accounting work on the basis of application of differenttools such as budgeting, costing etc through which estimation can be done for the products andservices and accordingly Imda Tech can reach to the valid conclusion. By using the budgetarycontrol corporation can effectively (Coad, Jack and Kholeif, 2015). For example, businesscontrol is done by using the forecasting method and accessing the cost effective sources offinance. This leads to manage the business activities effectively and determine the success of thebusiness in the marketplace with the increased rate of return. The application of managementaccounting, makes it possible to focus on sales, cost and tax planning effectively. This in turnbusiness generate greater rate of return and limited resources can be utilized in the best manner.Not only this but the management accounting contribute towards the detection of fraud due topreparing the timely report. For example, fiance or departmental managers of the Imda Tech Ltd
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