Management Accounting Unit 5: Financial Reporting Assignment Details

This assignment solution focuses on key aspects of management accounting, including budget reports, accounts receivable aging, and inventory valuation methods like FIFO, LIFO, and the average cost method. It emphasizes the importance of accurate and reliable data in these reports for strategic decision-making. The solution also briefly explains the income statement, balance sheet, and cash flow statement, highlighting their roles in assessing a company's financial performance, solvency, and cash position, respectively. Furthermore, the assignment solution also includes the importance of integrating management accounting systems within an organization by evaluating the benefits of management accounting systems and their application within an organizational context by covering topics such as Budgeting, Control, Decision making, Cost calculation, Risk calculation, Delegation, Responsibility and accountability, Adherence to the regulations, Auditing, and Performance management.

Management accounting, Unit 5 May 2018 Formative Assignment. P2
Complete the structure to the best of your ability, based on the information about the
assignment case study you have already been given. Bring it to your intern deadlines. If you
submit after the deadline no guarantees will be made as to if/when you will receive feedback.
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Explanation of the budget report and example of Budget Reports
A budget can be defined as a technique that is implemented by the organization in order to be
proactive of its actions. The budget runs on figures and hence, it is important to understand
the difference between the budgeted as well as actual performance of the business. The
sample of the budget report can be found below. Budgets can be prepared quarterly or
annually as well (Chohan, 2017).

Explanation of the accounts Receivable Aging reports and why it is important
Accounts receivable aging report is one of the important reports that can display the
performance of the accounts receivables. The accounts receivables can be termed as clients to
whom the sales is made on credit and hence, the cash is to be received back by the firm.
Under the accounts receivable aging report, the cash inflow is understood on the basis of the
credit terms assigned to each debtor and hence, it becomes important for the firm to record
which customer has paid and which customer will become insolvent as it affect the cash
position of the company (Griffiths, 2020).
Inventory reports and different methods that are used to calculate the value of
inventory
FIFO technique for the valuation of the stock is where the stock is sold on the standard of
first cum first premise. Under this technique if the stock units from the past part have been
remaining and simultaneously the new units are bought the stock is sold from the past parcel
first, at the past rate. This procedure proceeds in the comparative way (Ye and Karali, 2016).
LIFO technique otherwise called last in first out strategy is the procedure which is
represented by the proper accounting rules. Under this strategy the latest items are being sold
on the principal premise. In spite of the fact that the LIFO bookkeeping technique may bring
about decline of benefits of the firm, and it can likewise mean decrease in corporate
assessment an organization is required to pay.
Average cost of the stock is likewise one of the techniques to record the stock and it has been
figured by separating the complete expense of products ready to move by the all out units
ready to move.

Explain why the information in the above reports should be accurate, reliable and up to
date?
Inventory is one of the important elements of the balance sheet as well as income statement
and hence, the inventory report shall be accurate and reliable. The users of the financial
statement are dependent on the financial report for making the strategic business decisions
and therefore it is important to have the figures accurate. The profit can exceed or be less in
case of wring figures of the inventory and hence, the correct figure is important for the
business (Ye and Karali, 2016).
Briefly explain Income Statement, Balance Sheet statement and Cash Flow statement.
One of the most important financial statements is the incomes statement as it determines the
profit quotient of the business. Under the income statement the three major elements can be
seen such as sales, expenditure and the net profit of the business. These three elements are
interlinked to each other (Zhang, Ayer and White, 2019).
The balance sheet is a statement that displays the assets, liabilities and the capital funds
invested in the business by the owner. The purpose of the balance sheet is to define how
liquid and solvent a business is (Sunder, Sunder and Zhang, 2018).
Cash flow statement is one of the important statements prepared by the management as it
defines the incoming and outgoing of the cash flows. The cash is the important pillar of any
organization and to vouch its performance, the cash position is necessary to be reviewed
(Knežević, Mitrović and Ilić, 2016).

References
Chohan, U.W., 2017. Budget Reform and Political Reform. Global Encyclopedia of Public
Administration, Public Policy, and Governance.
Griffiths, J., 2020. The role of debtors and creditors in preventing debt crises in low-income
countries.
Knežević, S., Mitrović, A. and Ilić, Z., 2016. Different perspectives on the cash flow
statement. Hotel and Tourism Management, 4(2), pp.48-54.
Sunder, J., Sunder, S.V. and Zhang, J., 2018. Balance sheet conservatism and debt
contracting. Contemporary Accounting Research, 35(1), pp.494-524.
Ye, S. and Karali, B., 2016. The informational content of inventory announcements: Intraday
evidence from crude oil futures market. Energy Economics, 59, pp.349-364.