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Analysis of Accounting Reporting Methods for Using Management Accounting System

   

Added on  2020-10-05

17 Pages3823 Words487 Views
Management Accounting

TABLE OF CONTENTSTable of Contents.............................................................................................................................2INTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: (I): Management accounting and their essential requirements........................................1P2: (B): Financial statements analysis....................................................................................3(I): Different types of reporting methods...............................................................................3(II) Significance of data that are use in formulating report....................................................4M1: Advantage of using management accounting system.....................................................4D1: Critical analysis of accounting reporting methods..........................................................4TASK 2............................................................................................................................................5P3: Different types of costing methods used to determine net profit for the company..........5M2: Various types of management accounting techniques..................................................10D2: Interpretation of income statements..............................................................................10TASK 3..........................................................................................................................................10P4: Various types of budgets................................................................................................10M3: Analysis of planning tool..............................................................................................11D3: Critical analysis of financial issues...............................................................................12TASK 4..........................................................................................................................................12P5: Balance scorecard approach used for solving financial issues.......................................12M4: Analysis of financial issue............................................................................................13CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14Books and Journals:..............................................................................................................14

INTRODUCTIONThis project module is all about discussing various importance aspects which are relatedwith management accounting system. Every organisation wants to get more reliable outcomes byrecording their business transaction into various accounting books. This will be helpful in theway of preparing financial statements in more effective and efficient manner. The main objectiveof this particular module is to analyse various accounting systems and reporting methods that areuse by Tech (UK) limited. Apart from this, use of different costing method in calculating netincomes generated by the company within an accounting period of time can be analyseeffectively (Parker, 2012). Merits and demerit of several types of budget are also being discussedto control additional losses that are arises in an organisation. However, all those financial issuesthat are related with the company can be resolve by using management accounting systems areillustrated under this report.TASK 1P1: (I): Management accounting and their essential requirementsIn current era, it has been seen that plenty of organisation are getting more reliable growthand stability by using their reliable resources. At the same time, managers of Tech UK want touse best accounting systems which will be effective enough for them to get future aims andobjectives in more effective manner (Renz and Herman, 2016). for this purpose, they havedecided to analyse their financial performance through appointing a well experiences accountantthat would be capable enough to delivery more reliable outcomes in coming period of time.Management accounting is one of the primary tools which will assist an organisation torecord, summaries, communicate and evaluate various financial transactions that are done withinan accounting period. While management used to provide all sorts of functions such as planning,organising, controlling and directing the managers to make use of resources in effective mannerto get more reliable outcomes in near future.Management accounting Financial accountingIt is held responsible for providing necessaryrules and guidance to an accountant toprepared various financial statements of anorganisation.All the laws and policies that are made byupper level of the departments are needed to befollowed in effective manner so that betterresults can be drawn in effective manner.Management would not need to take any ofWhile, financial managers need to take prior1

permission to from other to make any specificdecision.permission of top level management to makeany kind of decision related with the reporting.Importance of management accounting in decision making:It has been found that any kinds of decision which are essential for the sake of anorganisation are needed to be made without any doubt. By management must have all kind ofinformation regarding their benefits and limitations. Some of them are:Increase productivity: It is considers that every decision made by the company isalways reliable for maximising productivity of the company. It can only be possible incase they are able to use best resources in coming period of time.Help in future forecasting: The primary motive of a Tech UK company is to makedecision in that ways in which they are able to estimate their cost and expenses forattaining maximum return in coming period of time. All investments are made by lookingall financial position and reports of performance that are incur by the company in lastcouple of year.Cost accounting system: This seems to be one of the main accounting systems that can aid anorganisation to manage and regulate their cost and expenses that are making impacts on overallproductivity of Tech UK within an accounting period. Some effective aspects those are relatedwith cost accounting are required to be taken into consideration. Such asNormal costing: under this cost, Tech UK need to paid for those products which areproduces by paying normal cost to direct material, labour and overheads.Actual costing: It is consider more accurate cost which is actually a company is goingtoo incurred for the production of products and services during the time.Standard costing: It happens to be more reliable costing method which is based on setstandards those are being set by the company during the time of production process.Inventory management system: It refers to be one of the crucial accounting techniqueswhich is held responsible for Tech UK company to control their ongoing stocks from thebusinesses (Soin and Collier, 2013). They need to make use of various tools to analyse theirinventory position on a regular basis so that chances of mistakes can be reduced.FIFO: In this rules, a company need not to follow any kind of rules and norms oneffective management of FIFO while reporting of financial information of the company.2

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