P1: Management Accounting and Its Importance
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Added on 2020-12-10
P1: Management Accounting and Its Importance
Added on 2020-12-10
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1: Management Accounting and its importance.......................................................................1P2. Different methods used for management accounting reporting............................................4M1: Some benefits of management accounting systems are as follows.....................................6TASK 2............................................................................................................................................6P3. Different kinds of costing techniques used for calculation of net profit ..............................6(a): ..............................................................................................................................................8(b) ...............................................................................................................................................8(c): .............................................................................................................................................8M2. Different types of accounting tools and techniques.............................................................8D2. Analysation of data collected from consolidated income statements...................................9TASK 3............................................................................................................................................9P4. Advantages and disadvantages of different types of planning tools used for budgetarycontrol.........................................................................................................................................9M3. Use of different planning tools and their applications for preparing and forecastingbudget........................................................................................................................................11D3. Evaluate planning tools to solve financial problems..........................................................11TASK 4..........................................................................................................................................11P5: Comparison with other organisation to overcome financial issues....................................11CONCLUSION..............................................................................................................................13
INTRODUCTIONEvery organisation in present time need the management for the proper and effectivecontrol over the business operation and management requires the accounting for the maintain theproper record of business transactions and for it's ascertainment. Because of this the needs ofmanagement accounting arises. For instance, the reason behind the utilisation of managementaccounting is mainly concerned with systematic procedure which pertain recording, summarisingand communicating the managerial information in systematic analysation form to ascertain thebusiness transactions . It assists the organisations to manage their all business activities in mosteffective way is helpful in ascertainment(Kaplan and Atkinson, 2015). The main objective ofusing appropriate accounting system is to manage appropriately the activities of the business andto achieve the desired goals. This study pertain the knowledge about the management accounting and its purpose andits advantages and disadvantages also it pertain the the managerial information of theorganisation Everyjoy Ltd. (U.K) which operates in entertainment industry which providesleisure and entertainment services. Moreover, management accounting and its techniques ormethods used for calculation, different types of costing method use for calculating the net profit.Not only this, advantages and disadvantages of different types of budgetary planning tools areused in budgetary control process are consists in this study. TASK 1P1: Management Accounting and its importanceDuring Ancient times there were no need of special management work force formanaging the business operations and functions also there were no systematic format orprocedure of recording classifying, summarising and ascertaining the business transactionswhich or business growth but now in present era as the need of management in an organisationis essential for effective and efficient control over the organisational transactions. In order tomanager these all the role of manager is dominant role in management workings. So, themanager engaged in managing the activities regarding the business operations and perform theactivities like analysing, summarising in a significant manner or in terms of money and interpretthe results there of(Ward, 2010). Management accounting is the appropriate systematicprocedure of presenting the of financial data in such an appropriate manner as it provides1
important directions and guidelines in order to achieve the desired goals in order to run theirbusiness. Management use management accounting systems to present efficient policies whichare important in the daily business activities and operations. It pertain some accountingtechniques and methods which helps in identifying and analysation of managerial data. it is alsohelpful in analysation of management activity. This will help them to ascertainment of profit byeffective and efficient utilisation of business resources(Hilton and Platt, 2013). The analysis ofall data prepared and maintain in a manner that it will be maintained under the systematicframework which is helpful in deciding the future plans and operations. The accountinginformation system is truly essential, as it is concerned with accounting terms and concepts, forthe process presentation and preparation of accounting statements that are essential inidentifying, measuring, evaluating and communicating the organisational economic data withthe managers of organisation the for enabling them in effective decision making.Definition: Management accounting is termed as of the effective process of accountingthat comprises with preparing and providing specific business operational information ormanagerial operations in most appropriate manner. It is beneficial for management in performingtheir managerial tasks or operational activities like planning, organising and effective decisionmaking.Financial accountingManagement accountingIt is a process of preparing financialstatements which depicts the financialperformance of the business.Financial accounting helps toascertain profitability of a businessorganisation such as Everjoy.It is a process of preparing consolidatecost and management accountingstatements which shows theoperational and managerialperformance.This type of accounting helps toascertain productivity and efficiencyof an organisation. Importance of Management Accounting in organisation. Beneficial in planning preparation : Planning is the most important elements ofmanagement operations. It is used to accomplish all desired goals of the organisation,those are decided by company for the future period( Otley and Emmanuel, 2013).2
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