Managing Accounts: Principles, Techniques, and Benefits

Managing Accounts

EXECUTIVE SUMMMARY
Management accounting is a process of collecting, analysing, organizing and representing
information in such a way which useful in take decision and operate business in effective way.
This report is prepared to define how managerial system, techniques tools of planning use to
measure performance and help in decision making process . It is also recognize how various
technique of management accounting useful in solving financial problem.

Table of Contents
INTRODUCTION...........................................................................................................................1
SECTION 1......................................................................................................................................1
PART A...........................................................................................................................................1
Meaning of management accounting. .........................................................................................1
Relevance of management accounting. ......................................................................................1
Principle of management accounting. .........................................................................................2
Benefits of managing accounting approach in business. ............................................................2
PART B............................................................................................................................................3
Meaning of management accounting system. .............................................................................3
Types of system of management accounting. .............................................................................3
Meaning of management accounting reports...............................................................................4
Explanation of various types of reports of management accounting. .........................................4
Benefits of management accounting system................................................................................4
Integration of system of management accounting & its reports..................................................5
PART C...........................................................................................................................................5
Meaning of cost. ..........................................................................................................................5
Explanation of types of cost techniques. .....................................................................................6
Meaning of marginal costing and formulation of its statement. .................................................6
Meaning of absorption costing & formulation of its statement. ................................................7
PART D...........................................................................................................................................8
Impact of techniques of management accounting........................................................................8
SECTION 2......................................................................................................................................9
PART A...........................................................................................................................................9
Meaning of budget.......................................................................................................................9
Types of budget............................................................................................................................9
Planning tools use for the purpose of budgetary control...........................................................10
PART B..........................................................................................................................................12
Explanation regarding financial problem and how organization deal with theses problems.. 12
PART C..........................................................................................................................................12

Application of tools of planning to control financial problem..................................................12
Use of tools of management accounting to respond financial problem.....................................12
CONCLUSION..............................................................................................................................14
REFERENCES................................................................................................................................1
APPENDIX......................................................................................................................................3

INTRODUCTION
Management accounting is define as branch of accounting which applicable in every
business organization. This approach is developed for effectively use profession knowledge in
decision making process. This report is formulated to define relevance of managing accounting.
For this purpose Capital Joinery has been taken. In this report requirement of management
accounting, its principle use of system as well as how cost calculate to determine profit. It is also
measure tools of planning for budgetary control and use of benchmarking, key performance
indicator to overcome financial problem.
SECTION 1
PART A
Meaning of management accounting.
Management accounting: This term define as accounts which formulate for enhance
managerial efficiency of organization by providing accurate and relevant business data. In other
words it is concerned with provide professional knowledge in such a way which beneficial for
management of organization to formulate policies, strategies and take decision to run data to day
business operations (Bloom, Sadun and Van Reenen, 2016).
Relevance of management accounting.
Management accounting approach is useful for run business in systematic way,
management department of Capital Joinery apply this approach for following reasons:
Formulation of plan: With the use of various tools and technique of management
accounting, manager formulate their future business plan on the basis of analysis and observing
the future market conditions.
Useful in take decision: By recognize and calculate cost of each department manager
able to find out which project is much more beneficial for their organization, on the basis of that
they take decision regarding selection of projects or business alternatives.
Measure performance: Management accounting is essential as with the use of tools of
this approach, manager of can evaluate their organizations' financial performance for given time
period which beneficial for identify the position of entity in market.

Principle of management accounting.
While applying approach of management accounting following are some principle which every
organization need to follow, these are define below:
Relevance: It is essential that every information which collect by accountant is relevant
and reliable. As on the basis of data collect from using different managing accounting tools
manager take decision on the basis of observing these data.
Value analysis: Management accounting principle based on the connect that each and
every detail and calculation useful in analysis value of organization (Botzem and Dobusch,
2017).
Communication: This is consider as most important principle of managerial accounting. This
principle states that every information and decision must be communicate in such as way which
help in decision making process. It is easily understand by each department. As well as
information provides by managing reports must be understood by internal & external
stakeholder. Thus manager of Capital Joinery need to formulate reports in such a way which is
easily communicate to every department of organization.
Product & strategies: This principle is useful apply for practical life, t is based on the
assumption is that, product and strategies holds be made in such a way which beneficial to
satisfy customer demand.
Benefits of managing accounting approach in business.
Following are the benefits of applying this approach:
Provides reliability: By using management accounting approach it provide base to
formulate financial statement which showcase relevant and reliable information regarding
financial performance of Capital Joinery.
Raise profitability: On the basis of using techniques of cost calculation manager
recognize which activity or item is the reason of arising of high cost, on the basis of tat manager
formulate polices to cut cost of operating operation which useful in raise profits. By using
effective pricing strategy also beneficial for Capital Joinery to increase their rate of generate
revenue (Bourmistrov and Kaarbøe, 2017).
Better services to customer: On the basis of analysis market condition they analysis
demand of customer and formulate their product design in such a way which helpful in satisfy
their customers.
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