Question :
- Explain the management accounting and its importance
- Presentation of financial information through managerial accounting reports
- Preparation of income statements using absorption costing and marginal costing methods
- Explain the types of budgetary control processes, types of budgeting tool and importance.
- Explanation of how management accounting help in solving financial problems.
Answer :
INTRODUCTION
Effective management and operations are the essential requirements of an organization in order to attain the desired aim and objective of business (Bovens, Goodin, and Schillemans, 2014). Management accounting is an internal part of the organization that helps to manage and operate the functions and operations of the business in a particular format. This report is prepared to analyze the essential aspect of management accounting. Management accounting system provides a structure to record the transactions and events in better way. Types of management accounting systems and reporting methods are defined in this context. Types of reports are provided in terms of helping and recording the data in effective and reliable manner. Tech UK Ltd is chosen organisation in which the role of management accounting is defined.
TASK 1
A) Explain the management accounting and the essential requirement of management accounting
Management Accounting
Management accounting is considered a management tool that assists in preparing and managing in terms of day-to-day business transactions and short-term managerial decisions. There are types of information and tools are analysed in terms of making effective plans and management strategies in business. Management accounting is a concept which analyses the overall transactions and events that happened during the year and summarise the information subject to determining the performance of the organization. Periodic reports and information are produced for managers and accountants which helps to manage the operations and departments of the organization (Brewer, Sorensen, and Stout, 2014).
As per IMA (Institute of Management Accountants), Management accounting is a profession that remains involved in management decision-making and developing plans and performance management systems. It provides expertise in financial reporting and control to help the management in the formulation and implementation of an organization's strategy. This is one of the essential aspects and important thing for determining the effectiveness of the organization. This basically helps managers and accountants to make business plans, effective management, and operational strategies with effective management and operations. This is mainly associated with making crucial decisions and management (What is Management Accounting System, 2018.).
I. Distinguishing Management Accounting from Financial Accounting
There are significant differences found in management accounting and financial accounting which are defined as follows;
|
Basis |
Management Accounting |
Financial Accounting |
|
Concept |
There are types of management accounting system. There are types of principles and concepts are defined which helps to make vital plans for their upcoming events and projects. |
Financial accounting is a process of financial statements and information. Financial rules, principle and rules are analysed which are used strategies to make financial plans. |
|
Essential |
This is considered as an internal part of organisation which helps to record the transaction for better management and operations. |
There are significant needs are analysed to follow the managers and the making financial plans. Financial rules and principle assist the financial planning and presentation of financial plans. |
|
Purpose |
Assistance to managers and accountants to analyse the plans and making strategies for internal management and operation. |
Providing financial information and preparing financial statements are the prime objectives of organisation in respect of shareholder and stakeholders of organisation. |
|
Format |
There is no specific format and structure made to keep records and presenting information. Organisations can use structure as per their suitability. |
There are type of formats and structures are used by organisations to present financial Information enterprise to prepare financial transactions in more significant form. |
You may also like to read: Enhance Personal and Professional Development
II. The importance of management accounting information as a decision-making tool for
Department managers
Evaluation of effective information: There is a proper analysis and evaluation done in respect of produced information and data. This information are used to affect the decision-making process and strategic planning. There are types of information that need to determine the implication affecting the profitability of an organization.
Relevant costing analysis: Cost analysis is also determines and analyse the important factors that remain associated with reducing cost and enhancing profitability of organisation. Relevant information are used to make decisions and strategies.
III. Cost accounting systems
cost accounting system is mainly helps to determine the overall cost of production, manufacturing and functional cost. Minimise the cost and maximise profitability.
You may also like this:
- Law of Business Organisation as Jupiter Publication Ltd.
- Master's Program Political Marketing
- Role of Marketing in Tk Maxx and its Relationship
- Objectives of Neroltd
- Case Study of Ilford-On-Sea Limited
UPTO56%
Avail The Benefit Today!
To View this & another 50000+ free
Update your Number