Management Accounting in Uk - Sample Assignment
Added on 2021-02-19
16 Pages5055 Words22 Views
FinancePolitical Science
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1TASK 2............................................................................................................................................6TASK 3............................................................................................................................................8TASK 4..........................................................................................................................................11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13
INTRODUCTIONIn the business context, the process of accounting that is related with collectingquantitative financial and business information into separate accounts so that day to day decisionare made is known as management accounting. It is related with gathering, reporting,formulating of useful business report which enables manager to take valid decision in order toimprove the business performance. By using internal report, internal manager use to identify thefinancial performance and profitability of company and make cosine report in order to makefurther improvement. To better recognise the importance of MA topic Excite enterprise havebeen selected which is located in UK. In this report, several kind of management accounting system with its main advantagesand reports are discussed. Costing method is also elaborated in this project which help inpreparing annual statements and extract net profit. Apart from this different planning tools withpros and cons and support in budgetary control is stated. With the support of different systemcompany is able to resolve the situation of financial problem. TASK 1Section A(a) Assessment between MAS and Financial accounting.Management accounting: Financial or non-monetary data in corporate reporting isbeing used by bookkeepers throughout this type of accounting.Financial accounting: In this kind of accounting the processing of variousfinancialreports provided to outside investors so that they can get the financial information aboutcompany within reporting year (Smith, 2015).Comparison:BasisManagement accountingFinancial accountingLegalrequirementThe preparing of managementaccounting documents is not legallyrequired.It is a legal requirement in terms offinancial reporting for investors toformulate financial reports.Types of datausedEconomic or non-financial informationis used in management reporting.On the opposite, just financialinformation is used to prepare authenticreport. 1
Format ofpresentationThe MA documents are not delivered inany specific format.Accountant must file financialstatements by considering IFRS-regulated particular format.Various types of MAS:(b) Cost accounting system:Thisaccounting systemis associated with the cost forecasting method for different tasksand procedures within company. Costsystem primarily helps to control and decreaseexpenditures of companies. Therefore, businesses are primarily expected to distribute themonetary resources for company according to the projected costs of the various activities(O’Grady, Morlidge and Rouse, 2016). This system mainly includes various types of costinglikedirect, standardcosting, etc. Standard expenses involvethe absorption costing structurewhere both kinds of expenses are assumed to be unit costs.Whereas,directcostsconsidermarginal costs in which only the variable costs are considered asmanufacturing costs. This systemassistsbusinesses to maintain efficient spending control.Excite limited is using that accounting system for the purpose of controlling the expenses ofoperations in the context of entertainment servicesFor example, absorption costs are valuable ineffectively measuring benefit and marginal costs supportto control manufacturing costs.(c) Inventory management system: Thisaccountingsystemprimarilyincorporates two practices that track and managemanufactured inventory in storage. The inventory deposited could be assets of businesses, rawmaterials and finished products, etc. Manufacturing divisions need to do that specifically inbusinesses to make a smart decision related tooutput level. Different solutions such as aperpetual inventory systems, continuous inventory systems and periodic stock systems are partofthis process.Just in time technique means reducing production time and decreased costs. Thepermanent inventory plan also monitors the product balance present in factories. The periodicinventory process results from reviewing the number of items a company holds at the start ofreporting year. This accounting system applies by the management respective firm to keep anauthentic record about inventories, such as LEDs, music system and many more so that decisioncan be made regarding setting of price.(d) Job costing system – 2
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