Management Accounting Presentation: Prime Furniture, East London

This presentation provides an overview of management accounting (MA) and its significance for business decision-making. It defines MA and explores different types of management accounting systems (MAS), including cost accounting, stock management, job costing, and price optimization systems. The presentation highlights the importance of integrating MAS within an organization and discusses the origin, role, and principles of MA, differentiating it from financial accounting. Furthermore, it examines the presentation of financial information, emphasizing reliability, up-to-date data, and understandability. Various types of reports, such as inventory reports, accounts receivable aging reports, and performance reports are also discussed, showcasing their utility in managerial decision-making, particularly within the context of Prime Furniture, a company based in East London. The presentation concludes by summarizing the key takeaways regarding the crucial role of MA in corporate strategy and operations.

INTRODUCTION
The management accounting (MA) is a type of accounting that is related to systematic
process of collecting monetary and anti monetary data of a company to prepare internal
reports. These reports help to corporations in order to take corrective actions for better
management. This power point presentation is based on a company that is Prime
furniture which is located in East London.

TABLE OF CONTENT
 INTRODUCTION
 INTRODUCTION TO MANAGEMENT ACCOUNTING
 DIFFERENT TYPES OF MANAGEMENT ACCOUNTING SYSTEM
 PRESENTING FINANCIAL INFORMATION
 CONCLUSION
 REFERENCES

INTRODUCTION TO MANAGEMENT
ACCOUNTING
What is MA and its definition?
As above stated that MA is a kind of accounting in that accountants produce reports to
help internal stakeholders, specially to managers. In these reports information about all
types of aspects is included for a particular accounting period.
Definition:
The term MA has been defined by different authors and institutions. Herein, underneath
MA is defined as per the CIMA (Charted institute of management accountants) which
states that it is a process of identifying, measuring, accumulating and sharing
information that is used by management in order to establish control.

CONTINUE
What is Management accounting system?
The MAS can be defined as those accounting systems which are related to process of
measuring and evaluating business operations for better management. There are
different types of accounting systems that helps to managerial aspects of companies in
an effective manner. In the Prime limited company, they applying different systems of
accounting for better management.

CONTINUE
Why it is important to integrate MAS with organisation?
It is necessary for companies to integrate MAS with process of companies because of its
significance. Each accounting system contributes in an effective to different departments
of companies. Such as cost accounting system helps to department of finance for
better usage of available financial resources. Like in the Prime furniture limited
company, it is responsibility of their managers to integrate accounting system
with business process.

CONTINUE
Origin, role and principle of MA?
Origin- MA has its foundations in the nineteenth-century industrial age.
Role- The role of MA is too wide for companies as it is linked with overall operations
and activities.
Principle- There are three types of principles such as:
 Influence
 Relevance
 Value
 Credibility

CONTINUE
Difference between MA and financial accounting?

DIFFERENT TYPES OF MANAGEMENT
ACCOUNTING SYSTEM
 Cost accounting system- It is related to making projection of cost and expenditures so that
managers can allocate funds in more effective manner. In the prime furniture limited company,
it is being applied to managing cost of different operations.
 Stock management system-This is aligned with process of measuring quantity of stored goods
by help of different techniques like LIFO, FIFO etc.
 Job costing system- It is associated with computing cost of job which is allocated to different
task. In above company, they apply this accounting system to find out cost of each produced
unit.
 Price optimisation system- This is linked with process of setting prices of products and services
as per the demand by customers. In above Prime limited company, their marketing department
applies it to set price of furnitures.

CONTINUE
Benefit of different MAS:
 Cost accounting system-Its application is to control overall cost. In Prime limited company,
it contributes in controlling cost of operations.
 Stock management system- It is associated with better management of activities regards to
purchasing and consumption of stored inventories. In above company, this helps them in
controlling cost of operation.
 Job costing system-The application of this system is to compute cost of each job separately.
By help of this, production department of above company computes cost of each output.
 Price optimisation system- This is related with setting price of products and services. In
Prime furniture limited company, their sales department sets prices of products and services
accordance of this accounting system.

PRESENTING FINANCIAL INFORMATION
Why information should be reliable and up to date?
This is necessary for companies to keep their financial informations up to date and
reliable. Such as for accountants of Prime furniture limited company, keep financial
information updated on a daily basis.
Why the presented information should be understandable?
The way of presenting information should be understandable because financial
information is needed by both internal and external stakeholders. Like in above
company, this is essential for their accountants to present information in understandable
way so that stakeholders can aware about financial condition.

CONTINUE
Different types of reports?
 Inventory report- This report consists information about quantitative aspect of various
form of material including raw material, finished goods etc. In Prime limited company,
their managers use information of this report in order to take decision regards to
production.
 Accounts receivable ageing report- This report includes information about those
debtors whose amount is due as well as information about date of transaction.
 Performance report- It is being used by managers to take decision about progress and
promotion of employees. The manager of above company decide about promotion and
progress of employees as per this report.

CONCLUSION
On the basis of above project report, it can be concluded that MA is crucial for
companies to take better decisions. The report concludes about role of different MAS
such as cost accounting system, stock management system for companies. As well as
various types of reports are also mentioned in the report like A/R ageing report, stock
report etc. in regards to their role for companies.