Report on Nisa Retail Store- Management Accounting
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Added on 2020-02-03
Report on Nisa Retail Store- Management Accounting
Added on 2020-02-03
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting and essential requirements of different types of managementaccounting systems.................................................................................................................1P2 Different methods used for management accounting reporting........................................2TASK 2............................................................................................................................................4P3. Calculating costs using techniques of cost analysis to prepare an income statement usingmarginal and absorption costs................................................................................................4TASK 3............................................................................................................................................7P4. Advantages and disadvantages of different types of planning tools used for budgetarycontrol.....................................................................................................................................7TASK 4............................................................................................................................................9P5. Comparing ways through which Nisa retail store is adapting management accountingsystems to respond to financial...............................................................................................9CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12APPENDIX 1.................................................................................................................................14
INTRODUCTIONManagement accounting can be determined as a process that involves partnering ofdevising planning, performance management system and decision making. For all the differentset of activities that are being set by the firm needs money so that the plan can be enacted in aneffective manner (Bennett, Schaltegger and Zvezdov, 2013). In this context, it is important forthe organization to have management of accounting. There are different type of process that arehelpful enough to manage resources related to finance. Present report is on Nisa retail store thatis headquartered in UK and they make sure to deliver their customers with high quality services.This report covers different type of management accounting that are being used within theorganization. Further, it covers advantages and disadvantages of different tools that is used forbudgetary control. Lastly, it also includes different ways with the help of which firms adoptmanagement accounting system in order to report the financial. TASK 1P1 Management accounting and essential requirements of different types of managementaccounting systemsManagement accounting can be defined as the process with the help of whichorganizations get to record financial transaction, accounts and different financial statement(Macintosh and Quattrone, 2010). For example, it includes cash flow statement, balance sheet,income statement, etc. selected company gets benefited as they are able to provide clear dataregarding finance and accounts. When management of the firm have proper information relatedwith their financial position, then it helpful enough to make decision for the future. Further, thereare different set of decision that are taken by the firm which can be long term or short term. Forall these aspects it requires effective financial support. Moreover, purchase decision are taken upby financial support. When the rate of financial support is high, then it becomes favourable forthe firm to manage and control resources related to finance in effective manner. There arevarious type of approaches and system that can be used by Nisa in order to manage their businessoperations. In this context, below given are few of the different management accounting:ABC costing: This is a type of method that is helpful to determine expenses and cost forevery day to day operations. In order to perform daily business efficiently, it requires1
management to identify the expense that they will need in order to perform the business activities(van der Meer-Kooistra and Vosselman, 2012). FIFO (first in first out): It is type of stock evaluation method as per this process the stockand inventory that are used for the first time will be sent off. This method is generally used bymost of the companies in order to valuing the level of inventory. It helps to determine the levelof overall stock in accurate manner. LIFO (last in first out): This is another type of stock evaluation method. In this processmanagement is able to sell their stock and manage the operations of business efficiently (Siegeland et.al., 2010). As per this method, all the inventory that is bought by Nisa at last will be soldat first place. This method is not much used by companies as it is less effective when comparedwith FIFO. Inventory accounting: This can be determined as a system or method that manages thestock or inventory of the organization. This is managed in order to generate sales for the firm.With the help of inventory accounting, Nisa is able to make use of terms that are helpful enoughto produce services and products (Chenhall and Moers, 2015). In case the level of inventory ishigh, then it affects the profitability of the organization. With the help of accounting process, itsupports Nisa retail to make proper control over stock and inventory. There is a limit that has tobe maintained by the firm in relation with the stock that they are willing to use for production butwhen the rate of stock is high, then there are negative impact over the firm. Weighted average: As per this method, it enables to know the average value of LIFO andFIFO. This way firm is able to determine the difference that they are getting when both FIFO andLIFO is applied (Chiwamit, Modell and Yang, 2014). In addition to this, overall evaluation canbe identified from the available stock or inventory. P2 Different methods used for management accounting reportingThere are different type of financial accounting that has to be prepared b y Nisa or anyother organization. In this context it includes balance sheet, cash flow statement, profit and lossaccount, etc. (Cullen, Tsamenyi and Gorst, 2013). All the data that involves the expenses that areincurred by the firm are recorded in these financial statement and they are helpful to get properinformation for where they stand. It is also helpful to determine the position of firm in context of2
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