Management Accounting: A Tool for Achieving Organizational Goals
Added on 2019-12-28
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Management Accounting
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1 ...........................................................................................................................................31. Management Accounting and difference between management and financial accounting....32. Importance of management accounting..................................................................................4Types of management accounting system...................................................................................4Benefits of management accounting systems.............................................................................5Management systems and management reporting is integrated within organisational processes.....................................................................................................................................................6Task 2...............................................................................................................................................6Preparation of Income statements...............................................................................................6TASK 3............................................................................................................................................8A. Types of budgets and their advantages and disadvantages....................................................8B. Process of preparing budgets..................................................................................................9C. Pricing strategies..................................................................................................................10Task 4.............................................................................................................................................10A) Balance score card approach ...............................................................................................101. Use of Balance score card in identifying and responding to financial problems..................10II. Use of balance score card in order to improve the financial governance.............................11Conclusion.....................................................................................................................................11References......................................................................................................................................13
INTRODUCTIONIn the modern time, management accounting is important for every type of business.Management accounting provide the financial and non-financial information of the company. Itmanage the finance and provide the finance for the company objectives. It also improve thebusiness skills and their processes. In this report, management accounting is based on the ImdaTech (UK) Limited, who is producing extra charger for telephone and for extra gadgets for theretail outlets in the UK (Coad, Jack and Kholeif, 2015). In has been also mentioned about theimportance of the management accounting. There are some questions of accounting. They are:financial accounting, cost accounting system, inventory management and job cost system. Theyall are the accounting of the management. Management accounting is important in the moderntime because it provide the finance to the companies and manage the finance according to thecompany requirement. So it is the financial management accounting (Cornell, 2014). TASK 1 A. 1. Management Accounting and difference between management and financial accountingThe management accounting is the process which provide the financial and non-financialinformation to the company. It also control the activities of the business and provide the betteraccounting system (DRURY, 2013). The financial accounting system is the process of finance,accounting and management. There are some differences between the management accounting and financialaccounting. Management accounting is the internal part of the company and financial accountingis the external part of the company which is related to the stakeholders. The managementaccounting is provide the effective information to the company whereas the financial accountingprovide the financial statement to the financial analysts and to the stakeholders (McPherson andKarney, 2014). The management accounting is effective for the manager of the company whereas thefinancial accounting is necessary for the financial investors. Management accounting is
important for the management of accounting and the financial accounting is important for themanagement of the finance (Miller and Kelber, 2015). The management accounting include theBEP, operating budgeting and management decision whereas the financial accounting includesthe income statement, balance sheet and the cash flow statement (Sundem. and et. al, 2014).2. Importance of management accountingThe management accounting is important for the decision making. There are someimportance of the management accounting which is given below:Determine of aim- The management accounting is important for evaluating the aim of thecompany. The management accounting provide the right information to the department managerof the company (Quattrone, 2016). So the management accounting determine the goals andobjectives of the company. Helps in the preparation of plan- The management accounting is also important for making theplan for the business activities. It provides the information of finance to the department managerand prepare the effective plan for the company growth.Helping in make or buy decision- The management accounting is important for the departmentmanager because it provide and make the effective decision to the department manager of thecompany. Increase efficiency of the business- The management accounting is important for increasing theefficiency of the business (Saladrigues and Tena, 2017). It increase the efficiency of the businessand provide the effective goals and objectives to the department manager. b.Types of management accounting systemThere are some types of the management accounting system. They are given below:1.Cost accounting systems- The cost accounting accounting is important for themanagement accounting (Zimmerman and Yahya-Zadeh, 2011). Cost accounting providethe information of the cost. The companies following the cost for their product and theservices. The cost accounting system is based on the actual, normal and standard costingof the accounting. The management accounting system provide the goods and services atthe lowest cost. The cost accounting accounting system is the record of collecting,analysing, summarizing and control the cost of the product and services (Banerjee andDas, 2017).
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