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Importance of Management Accounting – Doc

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Added on  2019-12-18

Importance of Management Accounting – Doc

   Added on 2019-12-18

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MANAGEMENTACCOUNTING
Importance of Management Accounting – Doc_1
Table of ContentsINTRODUCTION..........................................................................................................................3TASK1.............................................................................................................................................3A)............................................................................................................................................31. Management accounting and its differences financial accounting:....................................32.Importance of management accounting:.............................................................................4B).Types of management accounting system: .......................................................................5TASK.2............................................................................................................................................7Income as per absorption and marginal costing:....................................................................7TASK 3..........................................................................................................................................11(a) Different types of budget................................................................................................11(b) Process of preparing Budget...........................................................................................12(c) Pricing Strategies............................................................................................................12TASK 4 .........................................................................................................................................13Balance score card approach................................................................................................13CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15
Importance of Management Accounting – Doc_2
INTRODUCTIONManagement accounting is the method which is used by the organisations in dealing withthe different types of the cost that gets incurred in the various activities of the firm. Managementaccounting is a very essential element of the firm as because it helps in the making of thedecision and it also helps in identifying the financial resources that are required in the operationsof the organisation. With the help of the management accounting system the management teamof the organisation can be able to make several plans as well as strategies so that the operationsof the firm can be carried out in an effective manner (Angelakis,Theriouand Floropoulos,2010).The issues that are regarding preparing the budgets can also be well planned with the help of it,and the organisation's performances can also be enhanced with this. The risk factors that areinvolved in the various activities of the firm can be very effectively managed in the firm and thesolutions can also be identified with the help of the management accounting systems.Imda Tech Limited is dealing in the chargers of the mobiles and also in the differentelectronic gadgets. The organisation is having the lack of financial resources to carry out itsoperation, due to which the whole operation is getting hampered. Therefore the study will help inunderstanding the various methods through which the firm can resolve the issues.TASK1A).1. Management accounting and its differences between FA and MA:Definition of MA:Management accounting is the process of making reports and accounts which render adequateand timely financial and statistical information needed by the managers to frame routine andshort term decisions. With the help of management accounting, Imda tech needs to operates theiroperations in a better manner so the the objectives of the company can attained. Managerialaccounting is also known as the cost accounting. The main difference between managerial andfinancial accounting is managerial accounting information is focused at assisting managers underthe cited firm to frame decisions, while on the other hands, financial accounting is entirelyfocused at rendering information to the parties outside the firm.Definition of FA:
Importance of Management Accounting – Doc_3
Financial accounting is a particular branch of accounting which keeps track of firm's financialtransactions. With the help of standardized guidelines, the finance related translations arerecorded, summarized, and presented in a financial statement. Difference between MA and FA:There are basically few differences between management accounting and financialaccounting:Basis of differenceManagement Accounting Financial Accounting Aggregation MA reports at more definedlevel.FA reports on the outcome ofthe whole business. EfficiencyIt reports on more particularlyon what are the causing issuesand how to fix them. FA reports on profitability of afirm.Proven informationIt frequently deals with theforecasting instead of provenand verifiable facts.It needs that records to be heldin considerable precision, thatare required to be assured thatthe financial statements arecorrect. Standards It does not need to comply anyof the standards whilereporting.It needs to comply with somany accounting standards inorder to make the businesssustainable.2.Importance of management accounting:Management accounting reports renders data driven inputs to these decisions, that couldenhance decision making. Managers could leverage this strong method to assist in makingbusiness more successful and effective.Relevant cost Analysis: Management accounting reports aids to the administration of the firm toidentify what are need to sold and how to sell it. For instance, a small entrepreneurs might be notsure where they should concentrate his marketing efforts. For assessing this decisions, a manager
Importance of Management Accounting – Doc_4

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