Analysis of Management Accounting Journals
Added on 2020-10-04
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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Management accounting and its different types of systems..................................................1P2. Different methods used for management accounting reporting............................................3M1. Evaluation of various benefits of management accounting systems....................................4D1. Management accounting system and management accounting reporting are integrated withorganisational processes...............................................................................................................5TASK 2............................................................................................................................................6P3. Appropriate techniques of cost analysis to prepare an income statement.............................6M2. Management accounting techniques and financial reporting documents.............................9D2. Financial reports which accurately apply and interpret data for a range of businessactivities.....................................................................................................................................10TASK 3..........................................................................................................................................10P4. Advantages and disadvantages of different planning tools used in budgetary control........10M3. Usage of different planning tools and their applications for preparing and forecastingbudgets.......................................................................................................................................12TASK 4..........................................................................................................................................12P5. Organisations adapt different management accounting systems to respond to differentfinancial problems......................................................................................................................12M4. Management accounting in response to financial problems which leads organisation tosustainable success. ...................................................................................................................15D3. Various planning tools to resolve financial problems.........................................................15CONCLUSION..............................................................................................................................16REFERENCES..............................................................................................................................17
INTRODUCTIONManagement accounting is a process of preparing the confidential reports that isbeneficial for the top managers to track the activities leading towards the fulfilment oforganisational goals (Management accounting, 2018). These are the reports which provides allthe relevant information for the purpose of formulating short term and long term strategies bytaking appropriate decisions. Such technique helps in formulating policies for day to dayactivities as well as for the future activities. Such accounting is a framework which includes allthe other fields of accounting which aims to inform the management regarding to the variousfunctions of business. It manages all the obstacles which arises at the path of completing varioustasks (Ward and Calabrese, 2018). To study the practices of managerial accounting, SmithfieldConsultants Limited is selected. The selected organisation was incorporated in 2003 located atLondon, Unite Kingdom which provides financial along with consultancy services to private aswell as public business entities.In the following report broad information regarding to management accounting, differenttypes of management accounting, various methods used for accounting reporting with benefits,appropriate techniques used for cost analysis for preparation of income statements are clearlymentioned. It also involves different planning tools with benefits and drawbacks as well as roleof management accounting in overcoming from the financial issues. TASK 1P1. Management accounting and its different types of systems.Accounting is a kind of system which is related to the recording of financial transactionsin a systematic manner. The main objectives of accounting is to identify and recording all thefinancial transactions in proper books of accounts to get detailed information about the financialpositions. Such system helps in having control over the assets along with liabilities to disclosethe profits together with losses with the reason of advising tax related matters during anaccounting period. The management accounting is evolved for the basis of providing all the necessaryinformation regarding to the accounting to the managers for taking effective decisions along withexecuting the strategies and plans for controlling, communicating, coordinating various activitiesand motivating all its employees. Such accounting helps in assisting the executives in planning1
different activities and formulating various future plans to control the performances. Such systemprovides various alternative solutions to overcome the business problems. It lays down variousways to evaluate the effectiveness and efficiency to achieve the targets. It emphasizes onforecasting future events by analysing past situations in order to be prepared for the future. TheSmithfield Consultants Limited applies various management accounting systems which are asfollows:Inventory management system:This is a framework which acts as a supervision alongwith monitoring the available and required inventory in any organisation. Such systemhelps in keeping the sufficient required inventory to perform the operations smoothlywithout any delays. The tracking helps in reducing the loss of obsolescence and wastageof the available inventory with the business entity. Inventory management system isessentially required in Smithfield Consultants Limited to track its inventory related to thestationary items as well as the available inventory stock of capital for performing thebusiness operations with its clients (Vom Brocke, 2014).Cost accounting system: It is a system used by different organisations to estimate theassociated cost of the different products available with them for determining profitabilityanalysis, controlling costs along with valuation of the inventory. Such system helps inguiding top level managers to ascertain as well as analysis of various costs associatedfor the purpose of reducing various costs to achieve maximum profits. The SmithfieldConsultants Limited requires such system for examining the cost structure andestablishing cost effect relationships by dividing the costs of various products.Price optimization system: It is a technique which uses mathematical analysis toevaluate the customers and clients perception towards different prices and services viadifferent channels. Such system describes various applications which directly orindirectly helps in setting prices. It provides a structure for effectively determining theprices in such a way which facilitates the achievement of profits of the business entity.Such system plays essential role in Smithfield Consultants Limited understand thebuying pattern along with analysing the perception towards the services provided by theenterprise to its clients (Tucker and Lowe, 2014).2
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