Sample Assignment on Management Accounting - Doc

   

Added on  2021-02-19

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ManagementAccounting
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INTRODUCTIONManagement accounting is a technique which is used by managers in most of thebusiness entities for the purpose of determining the ability of company to reach all itspredetermined goals. In order to perform all the operational activities appropriately, it is veryimportant for all the enterprises to conduct it every year so that internal information could begathered to form decision for future (Abernethy and Wallis, 2018). The organisation which isselected for this project is KPMG which is one of the leading accountancy firm in the world anddelivering services to different clients such as Excite Entertainment Ltd. It is running itsoperations in leisure and entertainment industry. This report contains the subject the managementaccounting systems, reporting methods, formulation of income statement by applying marginaland absorption technique of costing it is tried to execute the importance of costing techniques.Role of financial governance and benchmarking in management accounting is correlated torespond financial problems effectively.TASK 1P1 MA systems and the requirements of various type of MA systemsManagement accounting: In most of the business entities a technique is used for thepurpose of analysing, controlling and monitoring effectiveness of operations which is known asmanagement accounting. In Excite Entertainment Ltd., managers are focusing on it as it helpsthem to determine that the efforts which are made by them are benefiting the business or not. It isconsidered by them in decision making as with the help of it, actual information aboutperformance of company could be gathered. Financial accounting: It is one of the recording structure that is used by large as well assmall companies to form final accounts so that actual financial status of business could bedetermined. In Excite Entertainment Ltd., accounting professionals are focusing on theformulation of financial statements so that they can analyse that whether operations are resultingin profit or losses (Alawattage, Wickramasinghe and Uddin, 2017). Difference between management and financial accounting:BasisManagement accountingFinancial accountingFormatThere is no specific format to prepareall the reports which are generatedIn order to formulate all the finalaccounts which are formed in financial1
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under management accounting.accounting have a specific format inwhich all the accounts are required to begenerated.Compulsion andauditingFor all the organisations it is notnecessary to conduct it every year asthere is no requirement of auditing formanagement reports.For all the companies, it is compulsory toconduct financial accounting every yearas auditing is very important for finalaccounts.Cost accounting systems: It can be defined as a system which is mainly used bycompanies for the purpose of determining actual cost which is faced by them while executingoperational activities. In Excite Entertainment Ltd., managers are using it for the purpose offinding causes of all the expenses which are taking place due to operations. It is essentiallyrequired for the enterprise as it can guide the managers to determine the factors which areresulting in higher cost. There are two types of it which are as follows:Direct costs: All the expenses which are directly related to business activities are knownas the part of such costs. In Excite Entertainment Ltd., managers face such costs whilepromoting the concerts and festivals all around UK.Standard costing: It is a costing technique which is used in most of the business entitiessuch as Excite Entertainment Ltd in order to gather information regarding the factorswhich are resulting in variation between standard and actual cost. Job costing systems: This system is mainly used in large organisations in order to segregateall the expenses which are resulting from different jobs. In Excite Entertainment Ltd., managersare using this system for the purpose of keeping track record of all the jobs which are performedaccording to specification of clients. It is very important for the organisation as it can help tosegregate different expenses according to the customers.Inventory management systems: this system is recognised by entities to manage all thegoods which are used subject to conduct operations effectively. In Excite Entertainment Ltd it isused by managers to maintain record of all the inventories in which is being used by employeesto provide leisure to the clients (Anderson and Dekker, 2014). There are three different types ofit which are as follows:Last in First Out (LIFO): In last in first out inventory management system currentlybought goods are used to deliver the services firstly.2
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