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MANAGEMENT ACCOUNTING

   

Added on  2021-02-20

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MANAGEMENTACCOUNTING
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Table of Contents1.0 Introduction................................................................................................................................42.0 Purpose of budgets ....................................................................................................................42.1 Cash Flow budgeting.............................................................................................................42.2 Capital budgeting..................................................................................................................42.3 Zero based budgeting:...........................................................................................................42.4 Rolling Budgets.....................................................................................................................52.5 Operational budgets:.............................................................................................................53.0 Planning tools used in Management Accounting.......................................................................53.1 Cost Accounting....................................................................................................................53.2 Budget Control......................................................................................................................63.3 Pricing Strategies..................................................................................................................63.4 Financial statement Analysis.................................................................................................64.0 (Question 3) Explaining the term KPI's.....................................................................................64.1 Company manage accounts in context of KPI's internal process. ........................................64.2 Advantages and disadvantage of KPI's.................................................................................74.0 (Question 4) Role of management accounting profession in identifying and preventing thefinancial irregularities......................................................................................................................75.0 Conclusion.................................................................................................................................76.0 REFERENCES..........................................................................................................................9
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1.0 IntroductionManagement accounting refer to the managing the financial and non financial activitiesof the company which helps them to take effective decision and also expand their business togain more profits (Management Accounting – Meaning, Advantages and Limitation, 2019). Thus,to mange the accounts various plans and procedure are to be implemented to take appropriatedecision. In this report it includes the planning tools which is used inn management accounting.It also includes the appropriate ways which is used by the organization to take effective decisionto respond to financial problems.2.0 Purpose of budgets Budgets are mainly prepared by company to analyse the income and expenditure which isincurred in the internal working of the company. With the preparation of authentic budgets ithelps to analyse the financial stability of the company (Bromwich and Scapens, 2016). The mainpurpose to budgetary control system is that it helps the company to expand their business andalso raise funds through presenting their stability and performance to achieve goal and targetwithin the stipulated time.2.1 Cash Flow budgetingThis budget is mainly prepared by company to analyse the cash inflow and outflow fromsuch transaction. The advantages of cash budgets reflect the sustainability of the company bymanaging there cash and can also borrow the funds for investors and banks. The majordisadvantage of cash flow budgeting reflects the fraud and distortion of cash from the companyand also demotivate the interests of employees by viewing more cash in the company.2.2 Capital budgetingThis is considered to be the important budget which is prepared by every organization orthe investment for longer time period. With this budgeting it enhances the values of the firm andalso it examined the strong reputation in the market (Carlsson-Wall, Kraus and Lind, 2015). Theadvantage of capital budgeting is that once the investment is made in capital it results inincreasing the profits of the company. The disadvantages which is to examined that there aremore chances of risk arise and also the equipment required lot of maintenance amount.
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