Management Accounting

MANAGEMENT ACCOUNTING

INTRODUCTION
Management accounting refers to the study of managing the accounting in the company
regarding analysing cost or making budgets to identify the accurate cash flows in company. It is
mainly undertaken in relation to preparing report such as financial report of the company which
indicates the organization overall working and also manages the cash flow in better way
(Askarany and Yazdifar, 2017). The main reason of carrying the management accounting in
business is relating to controlling the functions in business so that they can attract the
shareholder towards the business for longer way. Present report is based upon Excite
entertainment Ltd. which is based upon the leisure and entertainment industry mainly based in
UK. The main criteria which they carry is relating to promoting the concerts and festivals
throughout the UK to retain the interest of customer.
Report will include the matters relating to understanding the meaning of management
accounting. It also covers the matters relating to using the methods for managing accounting
reporting. Further it carries with the aspects relating to calculation cost through using the
appropriate techniques to prepare the income statement report. It also includes various planning
tools which is used in managing accounting. At last, it covers the matters relating to comparing
ways to respond to financial issues.
SCENARIO 1
A) Meaning of management accounting and its essential requirement
Management accounting: Organization mainly adapts the procedure of managing the
accounting in respect of conducting the accurate planning and analysing the aspects regarding
improving the performances. Through these aspects, it helps companies in making right
decisions and also interpret the business activities to gather relevant information. It also covers
the component relating to managing the budgets, break even analysis, valuation of stock,
estimating the cash flows and many more (Azudin and Mansor, 2018). These activities are
performed by the managers which assigned the task to manage the accounting. In respect of
undertaking the matters relating to Excite Entertainment Ltd, it is necessary to manage the
accounting which helps in getting the accurate information regarding the profits and losses which
they attained during the particular time period.
Difference between management accounting and financial accounting

Basis Management Accounting Financial Accounting
Aggregation Management accounting used
to report at most detailed level
in the organization as compare
to Financial accounting. Such
as profit by product, product
line and geographical region.
At same time financial
accounting used to report the
result of an entire business
together (Difference Between
Financial Accounting and
Management
Accounting, 2018).
Focus Management accounting used
to focus on different issue
which is causing problem and
how to fix the same in an
organization (Burritt, 2017).
Financial accounting used to
focus on profitability of
business in the long run as well
as sort run of business.
Standards Management accounting need
not compile with any of
standards. As information are
compiled for internal
consumption.
Financial accounting has to
compile with accounting
standard.
Timing Management accounting may
be issued more frequently as
compare to financial
accounting
Financial accounting is issued
during the end of an
accounting period (Golyagina
and Valuckas, 2019).
Cost accounting system
The essential requirement of the management accounting systems are as follows:
 Cost accounting systems: It is mainly adapted by firms in respect of figuring the cost
regarding selling the products which is estimated by managers. In case of Excite
Entertainment Ltd, they mainly use these systems regard to track the records of the good
inflow and outflow and manages the cost of inventories which is useful in promotion of
concerts or organizing festival in UK. The main important aspects of cost accounting