Unit 5 – Management Accounting

Management Accounting

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1) Discuss the management accounting and different types of management accounting
system.........................................................................................................................................4
P2) Explain various method of management accounting reporting............................................5
TASK 2............................................................................................................................................7
P3) Produce cost in order to using proper techniques for cost analysis such as income
statement, marginal and absorption costs...................................................................................7
TASK 3..........................................................................................................................................12
P4) Discuss the advantages and disadvantages of different types of planning tools in order to
used budgetary control..............................................................................................................12
TASK 4..........................................................................................................................................14
P5) Differentiate between two enterprises in order to effectively adapting management
accounting system.....................................................................................................................14
CONCLUSION ............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
It is process which are used by most of an organisation in order to properly allocated
resources as well as smoothly run the business activity. It is method which refers to manager are
effectively implementing in order to making decision due to accomplishing organisation goal
and objectives. Management accounting is process which are helpful to estimation of cost and
expanses in order to attained organisation profitability and productivity. The report is about Pearl
Chartered Accountant which are situated in UK and basically accounting firm which are
guidance to connect catering services of management accounting and effectively developing
proper record and transaction (Abdusalomova, 2020). It includes accomplishing all the detail
regarding financial function as well as performance, liabilities, accounts receivable, inventory
and budget report to solve the financial challenges. It includes make comparison between the
two enterprises in order to dealing financial aspect different way as well as follow the different
structure.
TASK 1
P1) Discuss the management accounting and different types of management accounting system.
It is process which refers to management accounting utilisation various tool and
techniques in order to managers take effective decision. It is different from financial accounting
in order to utilising various process as well as methods. It is essential to identify, analysis and
communicate accounting methodology in order to properly allocated the financial resources. The
main aim and purpose of this process which refers to effectively communicate and properly
allocate financial resources due making effective decisions. It is approach which refers to
financial information and statement are developed in order to managing business properly.
Management accounting utilised various resources in order to properly maintaining record which
effectively using by organisation. In context of Pearl Chartered Accountant, it includes
Accountant provide guidance in order to developing client connect catering services because
properly managing business due to preparing proper records such as trading, profit and loss,
balance sheet (Abdusalomova, 2019). It is process which refers to effectively taking decision
properly in order to sale product, analysis and many more. There are various kinds of
management accounting which are discussed below.

Inventory management system-: It is system which refers to effectively evaluating and
monitoring stock and asset in order to properly managing business operations. It is essential to
managing inventory system so used various method such as EOQ, JIT and ABC analysis in order
to smooth flow inventory. In context of organisation, it is essential to properly managing
inventory in order to achieving organisation goal and objectives. It considered properly
allocation of resources in order to managing expanses.
Job costing system-: It is system which refers to effectively identify and analysis need of
product so accordingly manufacturing quality and quantity. It involves properly managing
costing system in order to effectively managing costing in order to properly track product and
services (Alsharari, 2019). It includes utilisation various method and procedures so identify
product and services in order to effectively fulfilling customers need and demand. It consist
properly estimation of product and services in order to customer receive product, price, received
order and record cost due to developing final report and providing to accountant. It involves
effectively managing demand and supply of product and services.
Price optimising system-: It is system which refers to effectively maintaining price of
products in order to proper estimation of different product as well as analysis the various
situation of market. It is process which refers to customers set prices in order to managing price
of product and services in order to demand of particular product and services. It includes
maintaining demand of market and offered various product at different prices so organisation
using various promotional strategies.
Cost accounting system-: It is system which refers to properly estimation of price of
products and services which are helpful in order to increasing effectiveness of organisation. It
considered as cost accounting process refers proper costing and managing the expanses of
organisation (Drury, 2018). It is essential to proper estimation of cost of products in order to
employees of an organisation participated and coordination in order to fulfil customer need and
demand of products.
Therefore, it includes connect catering services in order to properly managing accounting
process in order to proper allocation of financial resources due to taking effective decision. It is
essential to managing system which refers to taking effective decision and enhancing
profitability. It includes properly managing information and communication in order to

estimation price of product in order to offered customers at affordable price. It is helpful for
developing business in catering services.
P2) Explain various method of management accounting reporting.
Management accounting is process which refers to record and developing in order to
maintaining financial report which refers to properly managing transaction in order to smoothly
conducting business operations. It is essential to effectively using resources due to manager
making effective decision in order to increasing organisation profitability and productivity. It
considered as management developing financial statement as well as properly allocated
resources due to managing expanses of company. It includes properly managing business
functions which are helpful for increasing profitability and productivity of company. In
relevance of organisation, it utilised various tool and techniques in order to focusing accounting
department (Hall, 2016). So, there are various methods and tool which are essential for an
organisation so mentioned below.
Budgeting Reports-: It is process which refers to organisation preparing budget in order
to analysed the performance of an organisation. It is essential to developing report in order to
proper estimation of expanses as well as resources. Budget is necessary for companies in order
to developing roughly ideas regarding cost of products and services. It considered as HR
department are developing estimation regrading employees in order to hiring, training and other
cost are incurred. Pearl Chartered Accountant developing estimation in order to providing advice
for client which refers to computation of financial funds. There are various measures which are
discussed below.
Inventory and manufacturing report-: It considered as maintaining stock and storage in
order to effectively managing operation. It includes majorly two cost such as overhead and
labour cost which effectively comparison in order to produce the manufacturing product and
services (Järvinen, 2016). It is an opportunities for an organisation in order to attained
organisation goal and objectives.
Accounts receivable report-: It is process which refers to finance department developing
effectively tools and techniques in order to serves the best services for customers. It includes
properly estimation of customers invoice as well as providing organisation credit policy. In
context of Perl Chartered Accounts, it considered as financial officers developing effective
report because organisation receiving assets and paying liability.

Performance report-: In is process which refers to effectively evaluating actual
performance of report in order to organisation developing budget. It includes financial
department plays vital role in order to measuring performance on the basis of monthly, quarterly
and yearly basis.
Advantages management accounting system with reporting
There are ample numbers of management accounting system in order to implementing
properly because without that business model cannot survive operations. It considered as
properly developing report due to collecting and gathering information effectively which result
as enhancing profitability and productivity (Johnstone, 2018). There are various benefits of
management accounting in order to proper estimation cost and expanses as well as support
providing for the connect catering services. It is essential for an organisation in order to
improving performance, financial sound, accountability and reduce various measures.
TASK 2
P3) Produce cost in order to using proper techniques for cost analysis such as income statement,
marginal and absorption costs.
Absorption cost-: It is another method which refers to effectively managing accounting
process in order to acquiring cost which result as efficiently producing product and services. It is
cost, expanses in order to properly allocation of activity which refers to product manufacturing
within period of time. It is essential to implementing effective costing techniques in order to
managing stock and inventory for next year. It includes properly estimation of cost as well as
fixed part of charges in order to managing inventory (Malina, 2017). It is process which refers to
absorption costing method which refers to proper estimation of variable and fixed costing due to
increasing profitability and productivity.
Income statements-: It is important tool and technique in order to developing financial
statements which are helpful to measuring income statement. It is statement which shows profit
and loss of organisation within specific period of time. It is statement which are providing
information regarding financial aspects in order to effectively attained goal and objectives. It is
essential to analysing financial performance of company in order to make improvement in
financial position and business functions. It is essential for organisation in order to properly
recording the expanses and gain due to enhancing profitability. It considered as various formulas

such as measuring revenue and matching concept. It is essential to calculating revenue in order
to developing income statement as well as developing balance sheet to know about the financial
condition of company.
Preparation of income statement through absorption and marginal costing of Connect
Catering Services are as follows:

TASK 3
P4) Discuss the advantages and disadvantages of different types of planning tools in order to
used budgetary control.
It considered as various method which are utilised by organisation in order to proper
planning of budgetary control method. It is approach which refers to organisation effectively
conducting budgetary method and tool in order to smoothly run the business operations. It is
essential for an organisation developing cost and expanses in budget and properly allocated
resources due to achieving organisation goal and objectives (Malmi, 2016). This tool majorly
depends on organisation profitability and productivity. It is process which refers to managing
business activity and functions on the basis of analysing performance effectively. There are

various method and tool which are effectively implementing by Chartered Accountants so
mentioned below.
Capital Budgeting-: It is process which refers to developing investment proposal due to
managing specific project. It considered as effectively measuring other factors due to purchase
machinery or plant in order to making effective decision for investment. It includes organisation
utilised various techniques in order to purchasing new product and services due to achieving
organisation goal and objectives (Nitzl, 2016). It is process which refers to effectively investing
money in new product and services so developing brand image in the mind of customers and
attracting large numbers of customers.
Advantages:
 It involves capital budgeting is process which refers to conducting proper planning
regrading budget in order to minimization of risk because various hazardous are
associated with this project. It is process which refers to companies effectively
formulating strategies in order to developing effective budget. Organisation choosing
those investment proposal which are providing greater return on investment.
 It considered as major benefit in order to effectively comparison the performance of
company with the help of preparing proper budget because various options are available
as well as find out the best possible result of particular projects.
Disadvantages:
It involves capital budgeting is process is time consuming process ion order to managers
preparing and then compare performance as well as various risk are associated on this techniques
which are directly impact on business operations and functions.
Budgetary control is system which are not effectively analysed the business environment
because comparison on the basis of numerical circumstances so accordingly managers making
different decision in order to effectively accomplishing organisation goal and objectives
(Nørreklit, 2017).
Cash budget-: It is tool and techniques which are utilised by organisation in order to
managing cash inflow and outflow due to increasing probability and production of company. It
considered as effectively and properly record are maintained in order to organisation liquidity. It
is tool which are essential for company due to measuring performance of employees.
Advantages:

 It is tool which are helpful for an organisation in order to organisation financial sound
and liquidity are managed due to smoothly operating business function and activity.
 It is necessary for an organisation in order to developing budget which are helpful for
organisation in order to successfully operating business in the market. There are various
resources in order to properly allocated in order to smoothly running business operations.
Disadvantage:
 The greatest disadvantage of cash budgeting due to managers has difficult to properly
record the transaction and entries. In relevance of company, it involves managers are not
effectively adapting techniques due to various advanced technology in order to recording
proper transaction and entries.
 Cash budget is process which refers to prescribed limitation regarding money spent so
accordingly managers recording transaction and entries.
Hence, it considered as various approaches and techniques due to effectively
implementing budgetary control process (Otley, 2016). It is process which are essential to
developing and maintaining proper record and transaction. Managers used this process in order
to maintain liquidity in business and attained organisation goal and objectives. It is tool and
techniques which are effectively using due to smoothly conducting business activity and
functions.
TASK 4
P5) Differentiate between two enterprises in order to effectively adapting management
accounting system.
It considered as management accounting is important concept in order to utilisation
various tool and techniques because organisation successfully operating business in the market.
It is essential for organisation in order to developing brand image in the mind of customers as
well as developing goodwill. There are ample numbers of policies, procedures in order to
developing financial statement due to making effective comparison between them. Organisation
facing ample numbers of financial problem so manager implement various strategies in order to
sustain in the market for longer period of time. It considered as organisation using various
resources which are discussed below (Quattrone, 2016). In reference of organisation, It involves
properly measuring the resources and allocated due to increasing effectiveness of organisation.

Management accounting using tool and techniques in order to effectively solve the problems
which result as attained organisation goal and objectives. In context of Pearl Chartered
Accountants, it involved formulating new policies which are helpful to measuring performance
indicators on the basis of set criteria. It includes financial governance so utilised various laws
and regulation in order to managing work effectively and efficiently (Samuel, 2018).
Organisation analysed the market condition and external factors accordingly implementing
strategies so effectively developing brand image as well as difficult to managing financial
function. In orders to environment drastically changes so organisation used advance technology
and methodology in finance system due to effectively managing financial fund and resources. It
considered as differentiate between the two organisation which are mentioned below.
Method Pearl Chartered
Accountants
Lost Withiel
Liquidity, solvency and debt
ratio
It is process which refers to
effectively utilisation various
tool and techniques in order to
maintain liquidity solvency
and debt equity ratio tool
because attained the financial
obligation as well as properly
measuring the proportion of
debt in relation to equity of an
organisation (Speckbacher,
2017). It is method which are
effectively solve the financial
challenges in order to properly
calculated ratio such as
solvency ratio, liquidity ratio,
debt ratio and many others. It
is process which refers to
organisation analysing
financial condition and
It is tool and techniques which
are effectively analysis the
ratio in order to managing
performance of company. It is
essential for an organisation in
order to effectively measuring
performance in the market and
utilised various strategies.
Organisation formulating
strategies in order to
effectively implementing due
to organisation which refers to
attained organisation goal and
objectives. It is essential for
company to make full
settlement of payment in order
to make payment of liabilities
and reeving amount from
debtors. It is tool which are

situation as well as
maintaining liquidity position.
It includes organisation
measuring task and activities
in order to proper managing
inventory system such as
properly allocating resources.
helpful to measuring liquidity
and financial sound so
calculation of solvency ratio
due to properly conversion in
term of short and long term
(CYigitbasioglu, 2016). It is
essential for company to solve
the different ratio and financial
issues which are faced by most
of organisation.
Probability ratio It is another method which are
helpful for calculating
profitability in an business so
properly implementing this
ratio. It considered as
organisation evaluating
analysis ratio which are
helpful to measuring revenue
and profit of company.
Organisation used various
method and properly
allocation of resources in order
to attained profitability as well
as meet with financial
obligation. It includes
organisation essential to
analysing profit in order to
know about the organisation
picture (Johnstone, 2018)
(Malina, 2017). It is process
which refers to effectively
The main aim and purpose
which refers to effectively
attained organisation goal and
objectives due to properly
allocated resources as well as
earn profitability. In reference
of organisation, it includes
organisation focusing on
business activity in order to
maintain liquidity and
profitability. It is necessary for
an organisation in order to
measuring financial
performance with the set
criteria as well as utilised
various ratio and proportion. It
involves financial risk are
associated with all this
measures in order to
effectively managing business

analysis profitability ratio in
order to managers taking
effective decisions.
activity and operation.
Therefore, it considered as utilisation various tool and techniques in order to effectively
attained organisation goal and objectives. It is process which refers to effectively implementing
method in order to maintaining authenticity and transparency in the book of accounts. It
considered as organisation effectively managing business activity and properly allocation of
resources so properly record transaction and entries as well as evaluating with the help of
stakeholders. It includes organisation effectively comparison between the competitors as well as
managing business function and activity (Malina, 2017). It is process which refers to utilised
various factor in order to developing key areas of improvement. However, it involves
comparison between the Pearl Chartered Accountants and Lostwithiel due to effectively process
of management accounting system. It considered as various ratio which are effectively applied in
order to proper manner as well as effectively gathering information and collection due to
increasing profitability and productivity of company.
CONCLUSION
From the above report, it has been concluded that management accounting is process
which refers to effectively adapting tool and techniques in order to properly managing business
activity and properly collecting information in order to achieving organisation goal and
objectives. It is process which refers to manager analysed the method in order to taking effective
decision which are helpful for an organisation due to sustain and survive in the market. It
considered as importance of management accounting system which are effectively located
resources as well as enhancing probability and productivity.

REFERENCES
The Books and Journal
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