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Management Accounting System Assignment Report

   

Added on  2020-07-23

14 Pages5579 Words63 Views
MANAGEMENTACCOUNTING

ContextTo work as a trainee management accountant at Imda Tech limited, which make different types of electronicalproduct and other gadgets for the retails in UK. The company is progressing with the successful rate but at presenttime they are facing some lack of financial information to improve their decision making.So, this report will help to solve the financial information gap and other relations of the function in the businessTask 1A) Definition of management accounting (MA) and its importance of Management accounting systemManagement accounting is the most significant issue of the business to make success on it and toaccomplish aims and objective of the company. Within the management accounting, the functions of managementand accounting are connecting with each other. Financial and non-financial accounting activities and the otherfunctions are coordinated with each other to make the progress of the business. Management accounting deals withthe issues like fund raising, fund management, resource management, decision-making, planning monitoring andcontrolling and the other issues relates with the business. Management accounting is the concept that has many scopes on the business to make the efficient strategicmanagement. There are several scopes is available of the MA these are-Management accounting (MA) helps to do effective management and strategy to the business.MA supports for identifying the roles and responsibilities of the management MA helps to understand the capacity of the entity itselfMA assists to Imda Tech for taking effective decisions and planning for the businessMA system is the most important system for the organisation which relates to various internal financialaspects of the firm. MA system helps to do the effective management with the use of different systems ofManagement accounting system. The major systems of MA system are-1.Cost accounting system2.Inventory management system3.Job-costing system4.Price optimizing systemManagement accounting system have more activities that makes more help to manage the business. Management accounting system leads to do the effective coordination with the financial and theinformation with the management.Management accounting system makes deals with the helps to do effective monitoring and controlling overmanagement.In order to assess the financial data for present and next accounting period the MA is an effective tool.Apart from this, it helps to make fruitful kind of business decisions.It helps to the Imda Tech Limited for setting objectives and aims of the workplace and boost up totalprofitability performance in the industry. 1

Difference between MA system and financial accountingManagement accounting system is not similar with the financial accounting while it deals with the financialterms but the way of working and approaching is completely different from the financial accounting. Financial accounting deals with the financial reports for a period (usually a year) in business that describesthe company affairs to stakeholders of the business. On the other hand, MA system deals with themanagement issues to make effective coordination with the financial data to make the effective decision.On the other hand, Management accounting deals with the current financial information. This is needed tomake effective plan for the day to day running of the business to achieve its goals and objectivesFinancial accounting followsingthe laid down standards whereas management accounting system does notfollow the any standards and giving but focuses on information needed forto the internal use according toeh of the business structure.Financial accounting describes the overall business result in various report as income statement and balancesheet. Managerial accounting shows the in details the figures level ofneeded for the day to day working inthe organization.Financial accounting describes with the profitability issues while managerial accounting describes thespecific cost issues of the business.Financial accounting focuses mainly on the profit margin only whereas management accounting helps tomake co-ordination of work to reach the goals of the business.Financial accounting deals with past financial information and turns them into them the income statementand balance sheet.B) Various systems of MA and its essential requirements within workplace of Imda Tech LimitedTo reach aims, purposes and objective of the firm, managers need to imply the systems of MA in aneffectual direction. To do that need to understand different systems of MA system like-Cost inventory system:To reach the goals and objectives of Imda Technology they can use the cost inventory system that use toidentify the cost issues to produce the product from production to distribution. To do the whole operation need tomanage the cost to get the highest level of production. Because to reach the profit margin first need to identify thecost issues like fixed cost, variable cost, overhead cost, labour cost and other cost that relates with the productionand operation. Some systems that the cost accounting system offered like actual costing, normal costing, standardcosting, other costing activities, life cycle of costing, environmental related costing Actually costing is known as the costing of the business which occurred after completing the productionand selling procedures. Further, it is not based on the assumptions as well as estimations within workplace of an entity.On the other hand, standard cost describes the target cost in comparison of the actual cost that describes theperforming the operations according to the plan with the costing issues. Further, these are only estimated and notbased on the incurred within workplace of cited company.2

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