Detailed Analysis of Management Accounting for Prime Furniture

This report provides an introduction to management accounting, focusing on its role in internal reporting and decision-making within organizations. The report uses Prime Furniture, a furniture store in East London, as a case study to illustrate key concepts. It defines management accounting and emphasizes the importance of integrating a management accounting system. The report covers the origin, role, and principles of management accounting, differentiating it from financial accounting. It details various types of management accounting systems, such as cost accounting, and highlights the significance of having reliable, relevant, and up-to-date information. The report also emphasizes the importance of clear information presentation and discusses different types of management accounting reports, including budgetary reports. The conclusion underscores the crucial role of management accounting in organizational success.

MANAGEMENT
ACCOUNTING

INTRODUCTION
Management accounting is the process in which
different reports are developed in the organization with
the purpose of sending a good sort of internal
information to manager of organization
The current presentation is based on company Prime
furniture which a furniture store established in East
London.

Definition of management accounting
Management accounting is the process in which
different reports are developed in the organization with
the purpose of sending a good sort of internal
information to manager of organization.
 On the basis of that manager used to make different
short term and long term decision.

Management accounting system and importance
of integrating management accounting system
 Management accounting systems are internal system of an organization, which
is generally uses by organization for the purpose of measuring and evaluating
the process of organizational management.
 Management accounting system will also provide variety of benefit for prime
furniture. Some of the benefit of management accounting system are as
follows:

Origin, role and principle of management
accounting
Origin
Management accounting was derived in England at the time of industrial revolution for the first
time. Management accounting was at that time was derives from the financial accounting.
Role
Stewardship accounting: Management accounting used to design different type of cost and financial
accounts which is used to decision making.
Short and long term planning: Management accounting also help organization in planning helps
organization in making different short and long term plan in an organization.

Differentiate between Management and financial
accounting
Basis Financial Accounting Management Accounting
Standard Financial accounting must be compile with
various accounting Standard.
It is not necessary for management accounting to be
compiled with any of the accounting standard.
Uses Financial accounting is uses by both internal as
well as the external stakeholder of an
organization
Management accounting is generally uses by the
internal management only, for the purpose of
making different decision.
Time Period This is generally made for the specific period of
time and used to record the past Data.
Management accounting used to record the different
estimation regarding the future.
Measure Financial accounting used to measure only
financial data in the organization.
Management accounting used to look at financial
data as well as operational performance of an
organization.

Different type of management accounting
system and its benefit
 Cost accounting system: It is the framework used by Prime Furniture in estimating the cost will be
incurred in the production process of an organization. Also used to analysis, inventory valuation and
cost control.
 Cost accounting used to help Prime furniture in getting proper idea about the expenditure of an
organization and on the basis of same organization can secure economy in manufacturing.
 Cost accounting also used to help the company in making the different decision in the organization
regarding how to minimize the cost of production in an organization.
 As it gives the through knowledge of different cost incurred in the production.

Importance of having reliable relevant and
up-to date information
 It is very important for organization to have a relevant information with authentication of
information in way of some sort of proofs.
 Also, this information should be accurate and up-to date otherwise it can create the situation of delay or
wrong decision making.
 Accurate data help the company in presenting good voice to the statement which is given by the
company on the basis of that information.
 Relevant data help the company in improving the quality of decision making in organization as manager
used to get good basis to make different decision in an organization.

Preparation of information
 Information should be presented in the form that viewer find it easy to understand
what information is trying to intend.
 This will help the publisher in getting more eye toward the information, as viewer used to
build a good sort of interest toward the data which is presented by an organization.
 Good presentation of data also help the organization in getting better support at the time of
going through the same in future as well.

Different type of management accounting
reports
 Budgetary Reports: It is the type of report with the help of same
organization used to analyze different performance of business and analyze
departmental performance and control cost.
 Manager at Prime furniture generally uses budget reports to provide
incentives to employees in an organization.
 Also organization uses this report as a standard benchmark to plan the
different activity in the organization for the purpose of achieving the
organizational goal.

CONCLUSION
 After going through the presentation it can be
concluded management accounting used to play a
very crucial role in success of an organization.
 It is so because of the fact that this assist the company
in managing and taking decisions.

REFERENCES
 Taylor, L. C. and Scapens, R. W., 2016. The role of identity and image in
shaping management accounting change. Accounting, Auditing &
Accountability Journal.
 Burney, L. L. and Malina, M. A. eds., 2019. Advances in Management
Accounting. Emerald Group Publishing.