Types of Management Accounting Systems

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Added on 2020-06-04

Types of Management Accounting Systems

Added on 2020-06-04

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MANAGEMENTACCOUNTING

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Management accounting functions........................................................................................1P2 Types of Management Accounting Systems..........................................................................3TASK 2............................................................................................................................................5P3 Income statements..................................................................................................................5TASK 3............................................................................................................................................7P4 Tools of planning...................................................................................................................7TASK 4..........................................................................................................................................10P5 Balance score card approach................................................................................................10CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................13

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INTRODUCTIONManagement accounting is referred to preparation of accounts and reports of theorganisation. It is also known as managerial accounting (Bodie, 2013). The accountinginformation prepared by the organisation is used by managers in taking accurate timely decision.The management accounting reports is used before making plans and policies it supports inmanaging the operation activities of business and increases the performance. In simple termsmanagement accounting is refers to presentation of financial and non-financial information oforganisation for managers. The reports of management accounting are prepared on weekly ormonthly basis to assist internal departments within the organisation. It has prepared with certainobjectives of organisation which supports in evaluating performance of employees and monitorsproduction efficiency. Certain businesses conduct assessment of risks and it is also done toallocate required resources within time frame. Following assignment is based on the IMDAbusiness which provides services in media sectors. The document will help to study differencebetween management accounting and financial accounting and importance of managementaccounting as a decision making tool is described significantly. This assignment will help to getknowledge on different types of budgets and their advantages and disadvantages. The differentpricing strategies which can be used by business to maximise its profits are studied significantlyin the following report. TASK 1P1 Management accounting functions.(1)Management accounting:- It is also known as cost accounting and it is completely differentfrom financial accounting.It is a significant process of formulation of reports which providesdetailed information to managers of organisation and assists them in taking effective short andlong term decisions. It used by managers in planning and controlling business activities(Chenhall and Smith, 2011). Differences Between Financial Accounting and Management Accounting.BasisFinancial AccountingManagement AccountingMeaning It is referred to process of preparingfinancial statements of businessIt is a systematic process of accountingwhich provides knowledge to internal1

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which supports in providingknowledge about financial position oforganisation (Cinquini and Tenucci,2010). departments and managers oforganisation and assists in effectiveplanning and decision making. ObjectivesMain objective for preparation of thisreport is to provide completefinancial information of business toexternal parties. It is prepared in order to supportinternal departments and managers inplanning and making effectivedecisions for achieving goals andobjectives of business. UserInformation laid down in this reportis used by outsiders of business suchas shareholders and investors whohave interest in organisation.Reports is only used by internalmembers of organisation such asmanagers and employees. RequirementPreparation of these report isnecessary for organisation.It is not necessary for organisation toprepare this. It can be prepared as perneed of organisation.FormatFinancial reports is prepared inspecific format.There is no specific format forpreparation of this report.InformationThis reports of organisation includeson monetary information.Both monetary and non-monetaryinformation of business is includedunder this report. Legal RulesAll legal rules are followed inpreparation of financial reports and itis prepared as per the AccountingStandards. There is no legal rules for preparationof the reports.Auditing andPublicationThe reports prepared in financialaccounting is published among publicand it is the audited by appointedstatutory auditors of organisation.Report prepared in managementaccounting is nether published amongpublic nor it is audited by auditors ofbusiness.ReportsFinancial status of organisation issummarised in this report. Complete detailed information aboutvarious matters of organisation is2

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