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Defining and Distinguishing Management Accounting INTROUCTION 4 TASK 14 a) Preparing a written report on management accounting

   

Added on  2020-01-07

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Management Accounting

TABLE OF CONTENTSintroduction......................................................................................................................................4TASK 1............................................................................................................................................4a) Preparing a well-researcheched written report on the functions of management accounting.4i) Defining management accounting and distinguish management accounting from financialaccounting....................................................................................................................................4ii) Importance of management accounting information as decision making tool........................5b) Different types of management accounting system ................................................................6TASK 2............................................................................................................................................7Absorption costing.......................................................................................................................7Marginal costing methods............................................................................................................9TASK 3..........................................................................................................................................11a) Different types of budgets and their advantages and disadvantages.....................................11b) Process of preparing the budgets...........................................................................................12c) Pricing strategies....................................................................................................................13TASK 4..........................................................................................................................................13a) Describing the Balance Score Card and its implementation..................................................14i) Using Balance Score Card (BSC) to identify and respond financial problem.......................14ii) Use of Balance Score Card to improve the financial governance and development ofeffective strategies.....................................................................................................................16CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................18Illustration IndexIllustration 1: Financial perspective of BSC..................................................................................15Illustration 2: Balance Score Card.................................................................................................16

INTRODUCTIONManagement accounting is the important field or section of the finance which helps toprepare the effective report and meet the expectations of all related parties. It covers activitiesrelated to presenting the financial information with the accumulation of reliable information orvalid data. The current report is based on Imda Tech Ltd; dealing with special charger for mobiletelephone and other carry on gadgets in UK. Further, report covers the difference betweenmanagement and financial accounting. In addition to this, Balance Score card has also beenapplied for measuring the performance of the business and meeting the expected objectives oroutcome. Moreover, different types of management accounting system are also explained.TASK 1a) Preparing a well-researcheched written report on the functions of management accountingThe functions of management accounting are explained as follows which consists ofdifferent aspects related to costing. This enables corporation to integrate all related activities andaccomplish long as well as short term objectives of the business in an effectual manner. It coversbelow mentioned aspects-i) Defining management accounting and distinguish management accounting from financial accountingThe management accounting consists of several activities such as preparing andproviding timely statistical and financial information to business management so as to take dailydecision along with other related short term decision. For this purpose, it becomes easy to statethe difference between management and financial accounting (Kaplan and Atkinson, 2015).Furthermore management accounting helps corporation Imda Tech Ltd, in the following manner-The decision making and planning are based on the data collected or presented throughmanagement accountingThe employees or managers are motivated for achieving the organizational objectivesUse of management accounting facilitates to create the competitive position of thebusiness in the marketplace.The performance of the corporation is measures in accordance with activities, sub-unitsand managers as well as employees.

Management accountingFinancial accountingThe management accounting work on the basisof data collected from financial accountingThe base of financial accounting is monitoredtransactions.It is helpful for the purpose of decisionmaking, controlling and planning as well asoperation of the businessIt is useful to publish the financial statement another financial reports so as to present thefinancial situation of the business effectively.Internal focus is considered under themanagement accounting but no any kind ofmandatory rulesThe external focus is considered under thefinancial accounting under which practicessuch as GAAP are followed.The subjective information are considered withfocus on non-financial and financialinformation (Renz, 2016).The financial accounting consider the historicalorientation for the purpose of presenting andcollecting the data.Historical data used for future performance orany kind of estimation related to internalmanagement of the business.Overall information related to firm issummarizes for the purpose of meetingexpectations of stakeholders and providingthem reliable data.ii) Importance of management accounting information as decision making toolManagement accounting is very important for taking the decision related to business. Itfacilitates to integrate all operational activities and support firm to achieve the long as well asshort term objectives of the business. It covers broad varied aspects through which corporationcan completed all related activities regarding taking the the most suitable decision and improvethe performance of the business in an effectual manner. The following process of the decisionmaking is taken under the management accounting. There are different types of tools applied fordecision making under the management accounting (Fullerton, Kennedy and Widener, 2014).For this purpose, budget as the most effective tool is taken into account whereby management ofthe business understand the common objectives and forecast the financial activities associatedwith the firm. By referring the budget, Imda Tech Ltd, estimate the requirement of employees,cash flows and warehouse facilities so as to start the operational activities in an effectual manner.In this manner, budget is applied for the purpose of bring certainty with the business and

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