Analysis of Management Accounting Systems and Financial Problems
Added on 2020-10-22
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MANAGEMENTACCOUNTING
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting system............................................................................................1P2 Different types management accounting reports ..................................................................4TASK 2............................................................................................................................................6P3 Break even analysis ...............................................................................................................6TASK 3............................................................................................................................................7TASK 4............................................................................................................................................8P4 Comparison of organization to adopting management accounting system to resolvefinancial issues............................................................................................................................8CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONManagement accounting is a process of accounting that are helping to organisation togiving financial and non financial information for growth of the business. On the basis of theseinformation business taking effective decisions. (Abdelhak, Grostick, and Hanken, 2014). It isalso known as cost accounting and managerial accounting. Periodic reports of the companyshows as a result of management accounting that will be using by managers and CEO. In thisreport taking company ever joy enterprises that is UK based company, who operates inentertainment and leisure industry in the UK is consulting with Boston consulting group onwriting a reference manual for their management accounting department. In this report covers several tasks and that are related to management accounting system.Task first related to definition of management accounting system and different methods ofmanagement accounting reporting. In task two, calculate cost with the help of appropriate costtechniques. In task three, identify different planning tools of budgetary control, and also identifyadvantages and disadvantages. In task four, adopting management accounting syatem for solvingfinancial problems.MAIN BODYTASK 1P1 Management accounting systemIt is describe as process of the company for operating company costs and analysing toprovide accurate financial records, accounts and reports to aid manager decision making processin achieving business objectives and goals. It is the act of making sense of costing and financialdata and translating that data into useful information for officers and managements within anorganizations (Baker, 2014).Difference between management accounting and financial accountingBasisManagement accountingFinancial accountingMeaningIt is the process of preparing andproviding management accountsand reports to the management fortaking appropriate decision. It is a branch of accounting thatkeeps track of a company'sfinancial transaction, recorded andpresentation of financial1
statements. Purpose It is related to internal purposebecause it is preparing for internalsystem. It is used for external reportingmainly, although the managementalso reviews it. ObjectiveIt focus on preparing financialreport for managers and CEO and italso provide financial informationto internal parties. It focus on preparing informationfor external parties, like aslenders, stockholders and publicregulators. RegulationIt is not regulated by specific laws. It has to be presented as perstandards. AuditIt is not subject to auditFinancial statements must beaudited. ContentsIt is including monetary and nonmonetary financial information. Financial accounting onlyincluding monetary information. UsersUsers of management accounting isinternal management of theorganization. Its users are regulators,shareholders and investors. MandatoryPreparation and presentation offinancial report is not mandatory. There is mandatory of preparationand presentation. FrequencyFor preparing and presenting offinancial statement there is notapply any frequency. Financial statements must beprepared for the financial year andpresented. Cost Accounting SystemIt is a describe as a framework that are mostly used by firms to predict the cost of theirproducts for inventory valuation, profitability analysis and cost control. This syatem helping topredict the accurate cost of products is critical for profitable operations. A firm need to knowwhich products are profitable and which ones are not and this can be discovered only when it hasestimated the correct cost of product (Belal, 2016). Advance, a product costing system helps inestimating the closing value of inventory materials, work in process and finished goods inventoryfor the purpose of financial statement preparation. This system works by following raw materialsas they go through the production levels and slowly turn into finished goods in actual time. Its2
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