Management Accounting of Tech UK limited : Report
Added on -2020-07-22
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ManagementAccounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1. Explaining management accounting and essential requirements of managementaccounting system 560 ...............................................................................................................1P2. (b) Determining the financial information............................................................................4TASK 2............................................................................................................................................5P3. Preparing income statement for the month of September.....................................................5TASK 3............................................................................................................................................6P4 Explaining the use of budget for planning and control purposes...........................................6TASK 4..........................................................................................................................................10P5 Presenting the management accounting approaches to overcome with financial problems inorganization...............................................................................................................................10CONCLUSION..............................................................................................................................10REFERENCES .............................................................................................................................11
INTRODUCTIONManagement accounting is the process of preparing management reports and accountsthat provide accurate and timely financial as well as statistical information required by managers.It is the necessary for the company to manage the functions in a better manner. Managementaccounting is the overall scenario which helps company to make financial accounting system.Present report will be based on management accounting of Tech UK limited who is producespecial charger for mobile telephone and other carry on gadgets for retail outlets in the UK. Thisreport will be based on how company manages their financial resources in a productive manner.Through they enhance the better opportunity growth. Further, assignment will discuss aboutessential requirements of management accounting system which help to distinguish managementaccounting information as a decision making tool for department managers. It will explain aboutthe importance of cost accounting system as well. Inventory management systems, job costing.Moreover, it will describe the essential aspects of management accounting system. TASK 1P1. Explaining management accounting and essential requirements of management accountingsystem.Management accounting system is the basic and necessary system to manage thecompany’s financial resources in a systematic manner. Focus of financial accounting is on thepreparing information for external parties such as stockholders, public regulators and lenders.Besides, management accounting system is based on some essential principles which helpcompany to develop the reports for internal and confidential use by managers for decisionmaking and identifying ways to run company efficiently (Ax and Greve, 2017). Moreover, itenables Tech UK limited to make product costing, trend analysis and forecasting as well asmarket constraints. Distinguishing Management Accounting from financial accountingSimilarities:Both; financial and management accounting system are the part of accountinginformation system. Accounting systems enable company to analyze its financial statements andtake the suitable decision making approach. Another similarities between both of them is theyare economic events are dealt in both system accounts. Financial accounting has given more newchallenges and opportunities to adopt new portfolio of investment (Bromwich and Scapens,1
2016). Besides, management accounting is the system that manages those systems on certainprinciples. Besides, another similarities between management accounting and financialaccounting is both the terms are equally concerned with financial statements, revenues, expenses,assets, liabilities and cash flow (Fayard, 2015). Both determining and measured of costs fordifferent accounting periods and even for different departments and sections. Differences:BasisFinancial Accounting Management AccountingAccounting Method Financial accounting followsthe double entry accountingmethod while entering thebusiness transactions such astransactions, summarizing,recording, etc (Fullerton,Kennedy and Widener, 2014). Management accountingsystem only manages thesystem. It is not based on anydouble entry system.Accounting Principles Financial accounting systemadopts Generally AcceptedAccountingPrinciples(GAAP)(GAAP) is not important formanagementaccountingsystem. Period of timeFinancial accounting system isbased on one year.Management accountingsystem relies on the situation. Purpose of ReportFinancial accounting system’smain purpose is to presentpotentialinvestors,shareholders,customers,creditors,regulatoryauthorities, suppliers andemployees (Maas, Schalteggerand Crutzen, 2016). Management accountingsystem. Is the moreover,transport and making goodgoals. It also makes goodchanges and betteropportunity, Managementaccounting make when.Importance of management accounting information as a decision making tool fordepartment managers2
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