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Role of Management Accounting

   

Added on  2020-01-23

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MANAGEMENTACCOUNTANT
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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1Difference among management and financial accounting..........................................................1TASK 2............................................................................................................................................3Importance of break-even analysis along with break-even chart................................................3TASK 3............................................................................................................................................4Evaluating importance of six operational budgets for a limited business entity.........................4TASK 4............................................................................................................................................6Significance of variance analysis................................................................................................6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
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INTRODUCTIONManagement is process which helps to the company in order to make plan, organise,implement and run the firm in effectual way. Without proper management overall businessprocess and its smooth functioning affects in negative way and it cannot achieve objectives andtargets adequately. The present study describes about management as well as financialaccounting which are key parts of every organisation. In the second and third task the studyfocuses on importance or significance of break-even analysis as well as different operationalbudgets within firm respectively. At the end of report, it emphasises on variance analysis that inwhich way it significant for the enterprise.TASK 1Difference among management and financial accountingBasis of differenceManagement accountingFinancial accountingObjectiveIn management accountingreports are prepared in order todetermine cost and expenseswhich helps to control them.Along with this, managers areable to control over the businessoperations.Objective or purpose of financialaccounting is to assess profitabilityand liquidity position of the company.Further, it helps to determine overallfinancial performance of the firm inindustry and compare with otherenterprise (Umo, 2014.).Primary usersKey users of such accounting areinternal managers and employeesof the firm.The respective approach is used byexternal parties like as customers,investors, creditors, suppliers,government, shareholders etc.KindofinformationIt provides various number ofmonetary as well as non-monetary information related tobusiness.In the financial accounting onlymonetary informations are to berecorded by managers.Time frameThere is not any specific timeperiod is set out so managementFinancial statements such as profitand loss account, cash flow1
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can prepare such reports when itrequires and need.statements, balance sheet etc. areprepared half yearly or yearly(Financial Accounting Vs.Management Accounting, 2017).Format of reportIn the management accountingthere are not any specific formatsare to be given and used.There are specific formats are to beused in order prepare differentfinancial statements.LawsandstandardsTo record monetary and non-monetary information any laws,rules and standards are not usedby the management.In order to record monetarytransactions it is very necessary to uselaws such as GAAP theory, UKGAAP, accounting standards, IFRSetc.PublicationsThere is not any requirement topublish management accountingreports.It is mandatory to publish all thefinancial statements using all the legalrules.AuditingSuch records are verifying by theinternal managers of the entity.Different financial statements areverifying with the help of legal auditrules and regulations by charteredaccountant (CA).Necessity Not necessary to prepare suchaccounts but due to gettinginternal informations companyused to make (Thomas and et.al.,2012).Necessary to record all the financialtransactions and prepare all thefinancial statements which arerequired.PerspectiveSuch kind of reports are futureperspective and helps to forecastinformation for further FY.The financial reports providehistorical information so it is historicperspective2
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