M1 - Evaluation of various management accounting system
Added on 2021-01-02
16 Pages4428 Words491 Views
FinancePolitical Science
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Management accounting
ContentsINTRODUCTION.....................................................................................................................................3TASK 1....................................................................................................................................................4P1: Management accounting and its different systems.....................................................................4P2 Different method of management accounting reporting.............................................................5M1: Evaluation of various management accounting system.............................................................7D1 Management accounting system and management accounting reporting that are integrated with the organisation process of company........................................................................................7TASK 2....................................................................................................................................................8P3: Cost accounting techniques to prepare an income statement....................................................8M2: Management accounting techniques and financial reporting documents...............................11D2. Financial reports which applies to interpret many business activities......................................11TASK 3..................................................................................................................................................12P4. Advantages and disadvantages of different types of planning tools used for budgetary control..........................................................................................................................................................12M3. Usage of different planning tools for preparing and forecasting budgets................................13TASK 4..................................................................................................................................................13P5 Comparison of how organisation adopt management accounting system so as to respond to financial problems...........................................................................................................................13M4 Analysis of how in responding to financial problems management accounting can lead organisations to sustainable success...............................................................................................15D3 Various planning tools to resolve financial problems.................................................................16CONCLUSION.......................................................................................................................................16REFERENCES........................................................................................................................................17
INTRODUCTIONManagement accounting refers to the managing and monitoring of financial transactionsrecorded in financial statements such as profit and loss a/c, balance sheet, cash flow statementetc. It is the responsibility of the accounting manager to keep records of every transactions soas to present actual financial position of an organisation towards its stakeholders. It assist themanagement of company to make an effective and suitable decisions in order to maintainfinancial stability and rivalry position in competitive market (Management accounting and itsimportance, 2019). The present assignment is based on LM Engineering Ltd. company whichdeals in civil engineering and planning services to the people of northern British Columbia. Itwas established in the country of UK. The present assignment explains the variousaccounting and reporting systems along with their integrations in order to achieveorganisational objectives. The project also includes the different costing methods andplanning tools to control budget along with its merits and demerits. Role of managementaccounting systems and various tools to resolve financial problems in order to attain financialstability in competitive market (Garrison and et. al., 2010).TASK 1P1: Management accounting and its different systemsThe term management accounting is the activity or whole process of recognising,summarising, presenting and recording of different financial transaction that relate with in thebusiness. For record of this transaction various method or books are present such as profit &loss account, cash and fund flow statement and balance sheet. The concept of managementaccounting impact directly on various cost that are bear by company in upcoming future. Ithelp to increase cost efficiency and find different ways by which company operate activites incost effective way (Grabel, 2018). Management accounting and its importance LM Engineering ltd. Uses various types of accounting system that help company tomaintain their financial records. Along with this it also help management to make decisionwith help to achieve company goals and targets. Several accounting system that are adoptedby LM engineering LTD. are as followCost accounting system- Through this system company analysis cost of goods,services, fixed and variable cost of company. This is essential part for every organisation like
LM Engineering Ltd. execute this accounting system to find out estimation cost of businessas it is beneficial because with company analysis their profit in future. So with costaccounting system company sell their products in market with add their margin (Harris andMongiello, 2012).Job costing system- The total cost of company is found with job costing system. LMEngineering ltd. use this to predict or calculate the total cost that are bear by them to offeretheir product or service in the market.It is most suitable for those companies that offerproduct in wide range to company. With job costing LM Engineering ltd. predict the actualcost of their different units. So in future this help company to find out the actual amount ofprofits that are earn with specific unit. Inventory management system- With the implement of inventory management systemit is easy to track the status of different inventories that are available in organisation. Thishelp a company to meet their products as expectation of customer with in a minimum timeperiod. LM engineering ltd. use this system to find out the actual number of products that arepresent in company warehouse and store. Example- if an company want to track the numberof loans that are raised by company to complete its activities then they use this system(Siverbo, 2014).Comparison of management accounting with financial accounting:BasicsManagement accountingFinancial accountingMeaningWith this system companyanalysis relevant and usefuldetail about market andcompany. It help to developeffective plan and policy fora business.This system mainly focus toprepare financial account fora company such as profit andloss account, trading accountetc. It help to ensure financialposition of company.Time focuses Management accounting isdone for the future. Financial accounting is abase by which companyknow their present and pastdata.Rules and regulationIn this only internal rules andregulation impact position ofbusiness.For this accounting companyhave to follow properguidelines for a business.
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