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Management Accounting Assignemnt | Nero ltd

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Added on  2021-01-02

Management Accounting Assignemnt | Nero ltd

   Added on 2021-01-02

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MANANGEMENTACCOUNTING
Management Accounting Assignemnt | Nero ltd_1
ContentsTASK 1..........................................................................................................................................................3P1: Define management accounting and requirements of management accounting systems................3P2: Different methods used in management accounting reporting:.......................................................5M1: Benefits of using management accounting system..........................................................................6D1: Analysis of the various reporting methods and accounting system integration................................7TASK 2..........................................................................................................................................................7P3: Different kinds of costing methods....................................................................................................7M2: Various types of accounting tools and techniques.........................................................................11D2: Analysis of data collected through income statement....................................................................11TASK 3........................................................................................................................................................11P4 Advantages and disadvantages of using planning tools:...................................................................11M3: Analysis of the planning tools.........................................................................................................13D3: Evaluation of planning tools for responding to financial issues......................................................13TASK 4........................................................................................................................................................13P5: Measures taken to resolve the financial problems of company......................................................13M4: Evaluation of the planning tools to deal with the financial issues..................................................15CONCLUSION.............................................................................................................................................15REFERENCES..............................................................................................................................................16
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INTRODUCTIONManagement of the company plays an essential role in managing the operations of thebusiness activities so that the organizational goals are achieved in an effective and efficientmanner. Role of management is very crucial in every organization irrespective of its size. Forthis, Management accounting system plays an important role by providing the internal managerswith the essential information. The management accounting system summarizes the informationof the financial statements of the company with the future economic and non economicconditions that may affect the business in the near future, and then passes on this information tothe managers so that they can take suitable decisions and attain the organizational objectives. In this research report we will discuss about ‘Nero ltd’ and the various accountingsystems that should be implemented and their essential use in the workings of the organizations.We will discuss about the methods used in management accounting reporting, what are theappropriate techniques of cost analysis, advantages and disadvantages of planning tools inbudgetary control and how companies respond to financial problems using accounting system. TASK 1P1: Define management accounting and requirements of management accounting systemsMeaning and Definitions: The management accounting is the form of accounting whichis done for providing the necessary information to the internal management of the company. Theaccountant collects the information from the financial statements of the company and studiesother future economic and non economic condition and then presents all of that information in areport, and that report is given to the internal managers for taking suitable decisions for thecompany so that the company can take suitable decisions according to the market conditions.The information presented in this report is quantitative in nature as compared to the qualitativenature of financial accounting.Management accounting is concerned with the preparation of financial reports andforecasts that are reliable, accurate and fair, the data contained in these reports should be helpfulto the internal management for formulating the plan and policies for the organization that wouldhelp the company in attaining the determined objectives which may be short or long term.
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Types of accounting systems:Price Optimization: This is the accounting system which focuses on balancing betweenthe value and profit of the product to maintain the customer satisfaction along with theprofitability of the company. This accounting deals with determining the price of the product insuch a manner so that the price of the product seems optimum to both the company and thetargeted customers. The system of price optimization allows the companies determining thedemand of their products in the market and accordingly setting the pricing strategies.Cost accounting system: The modern companies such as Nero. Ltd can only survive inthis competitive environment only if they use such costing systems in managing their operationsand determining their production cost to perform effectively and efficiently. Thus, theaccountants of such companies need to ensure that there is no excessive cost involved in thebusiness operations and if there is he need to cut it down. This helps in reducing the wastages offinancial resources incurred in the activities of business.Inventory management system: This accounting system deals with managing theinventory levels of the organization. The companies like Nero ltd. Needs to maintain their stocklevels by using this system for satisfying the demands of their customers as and when required.The managers of Nero Ltd should take the responsibilities of managing all the activities startingfrom the production level till the final sales of company. The inventory management system thatcompanies follows are discussed as under:FIFO: This inventory system suggests that the goods that came first in the stock of thecompany are supposed to be sold first, which means that cost of goods sold represent goods thatcame earlier in the stock and the goods that came in later goes to the closing inventory.LIFO: This system of inventory management means last in first out and it suggests thatthe goods that came into stock later are supposed to be sold first and thus the cost of goods soldrepresents goods that came into inventory in the end and the earlier purchased goods goes intoclosing inventory.
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