Management Accounting Report: Analyzing Financial Information

This report provides a comprehensive overview of management accounting, detailing its importance in business decision-making. It explores the different types of management accounting systems, including cost accounting, inventory management, and price optimization, and highlights their benefits. The report also examines the principles of management accounting, such as designing and compiling reports and the use of management by exception. It differentiates between management and financial accounting, outlining their respective purposes and users. Furthermore, it details the types of reports used in management accounting, such as account receivable aging reports, inventory management reports, performance reports, and cost accounting reports. The conclusion emphasizes the significance of management accounting in analyzing financial information and managing business activities, with references to relevant sources.

Management Accounting
(LO1)

Table of Content
 Introduction
 Types of management accounting system
 Principles and benefits of systems
 Management accounting reports
 Conclusion
 References

Introduction
Management accounting is the main practices of any business as it needs to make the
right business decision by analysing all financial transactions and information. For
any organization it is important to follow principles and policies that can help to
operate the business regularly

Types of management accounting and
evaluating benefits
Management accounting is provision of financial and non-financial decision making to
managers and helps the management to make insightful intake. This is important to
take necessary needs and requirement and helps the process to take proper steps in the
management.

Principles of Management accounting
 Designing and compiling
 Management by Exception

Cont..
Role of Management accounting are as follows-
 Facilitates in Decision-making-
 Controlling-

Difference between Management and Financial
Accounting
Difference between Management accounting and Financial accounting
Basis Management Accounting Financial Accounting
Meaning This is the process of planning,
organising, identifying, managing
and controlling the functions and
activities of the management.
This related to financial information
which runs and monitor the business
decision.
Purpose It is used for internal process It is used in external reporting.
Uses This used in managing process to
take appropriate decision-making.
This used for investor, shareholders
and regulators.

Types of management accounting
system
 Cost accounting system
 Inventory-management system
 Price optimization

Benefits of management accounting system
Benefits of management accounting system are as follows-
Management accounting
System
Uses Application
Cost accounting system This helps in estimating the cost of
product and services that provided
by organisation to customer.
Prime Furniture will applying the
cost accounting system to find all
cost of transportation and other
expenses.
Inventory-management system This system will used in managing
the inventory, placing order,
checking the availability.
The organisation is applying
inventory management system to
track inventory and managing the
order of product.
Price optimisation system This is to set the price of products
which provided by organisation to
manage the activities.
Prime Furniture is using this
system to regulate the price of
their products to satisfy their
costumer.

Defining different methods of management
reporting
The reports of management accounting depends on financial statements, cash flow and profit and loss
statements which is used to regulate the organizational functions and activities. In the selected
company, following are the report that is useful in the management are as follows-

Cont..
 Account receivable ageing report
 Inventory management report

Cont..
 Performance report
 Cost accounting report

Conclusion
From the report it can be concluded that management accounting uses by all
organizations by analyzing the financial information and managing task.
Different types of systems are cost accounting, inventory management, and
price optimization system are uses to set the business activities and taking
right actions. Capital budget and operating budgets are prepared by
management that helps to control over budgets. Moreover, accounting
systems can be use by management to solve the financial problems.

References
Cohen, S., and et. al., 2019. Local government administration systems and
local government accounting information needs: is there a mismatch?.
International Review of Administrative Sciences. 85(4). pp.708-725.
Meiryani, M., Susanto, A. and Warganegara, D. L., 2019. The issues
influencing of environmental accounting information systems: an
empirical investigation of SMEs in Indonesia. International Journal of
Energy Economics and Policy. 9(1). p.282.

Thank You