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Management Accounting Assignment - Deloitee

Added on - 23 Nov 2020

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Management accounting
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3MAIN BODY...................................................................................................................................3LO 1.................................................................................................................................................3P1. Explaining management accounting and key requirements of different types ofmanagement accounting systems...........................................................................................3P2. Different methods for managerial accounting reporting..................................................7LO 2.................................................................................................................................................9P3. Preparing income statement using absorption and marginal costing system...................9P4 Advantages and disadvantages of the different types of planning tools used for budgetarycontrol...................................................................................................................................12P5 Ways of adopting management accounting system to respond to financial problems...14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................17
INTRODUCTIONManagement accounting can be defined as a branch of management through which variousinformation relating to the financial activities of the company are being summarised andprovided to the internal users of the company. This system helps the managers in developingtheir plans and strategies for the business so that they can take appropriate decisions for thebusiness and enhance company's profitability and overall financial position. Deloitee is the mostleading accounting firm of UK. It was established on 1845 and currently it provides accountingprofessional consultant and auditing services to thousands of business organisation in all over theworld. The present study describes management accounting along with its difference with thefinancial accounting. It shows various types of management accounting systems andmanagement accounting reporting through which company can develop effective management ofvarious business activities.It also shows preparation of income statements of the company using variousmanagement accounting techniques. Furthermore, the assignment also shows different planningtools of budgetary control that can be used by managers in their managerial functions in contextto the financial activities of business. In addition, it provides information about variousmanagement accounting system through which company's ability to responding numerousfinancial problems can be resolved.MAIN BODYLO 1P1. Explaining management accounting and key requirements of different types of managementaccounting systemsManagement accountingManagement accounting helps the managers in managing various business operations. Inthis system of management, manager’s analyses various income, expenses, profits, etc. of thebusiness (Management Accounting – Meaning, Advantages & Functions,2018). With the help ofit, Excite Ltd. Can appropriate price of the product and generate appropriate profit as well.In other words, management accounting can be defined as a process in whichprofessional skills and knowledge are being adopted by the managers so that managers can
provide all the information with the help of which they can formulate effective plans andstrategies for controlling each business operations of the company.Financial accountingFinancial accounting is a process of analysing and summarising various financialactivities of the company so that the stakeholders and other outsiders of company can analyse theactual financial position of company. Further, it can be stated that financial accounting is abranch of accounting through which the firm maintains a proper record of each financialtransaction of the company using numerous guidelines and rules provided in the accountingstandards of the company.Difference between management accounting and financial accountingBasisManagement accountingFinancial accountingMeaningManagement accounting helpsmanagers in gathering allrelevant information fordeveloping effective strategiesfor the business.Financial system refers topreparation of variousfinancial statements and showthe actual position to theexternal users of company.ObjectiveTo provide all relevantinformation to internal users.To help external users intaking their decision relating tocompany.AuditingManagement accountingreports are for the use ofinternal users only. Therefore,these need not to get audited.Financial accounting reportsare used by external users. Inthis regard, these reports areneeded to get audited bycompany.Time of preparationThese are prepared wheneverthey are needed by themanagers or other internalusers.Generally, financial statementsare prepared at the end offinancial year.FormatThere is no specific format topreparemanagementFinancial accounting reportsare needed to be prepared in a
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