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INTRODUCTION

Management accounting is an essential aspect for an organisation. By the help of this company would able to manage and control their financial transaction in more effective manner. The main aims of Tech UK are to attain maximum gain through using resources in more proper ways. This project report is providing crucial information about various accounting and reporting systems those are used for the purpose of recording transactions into their respective set format. Moreover, it will be discussing various costing methods that are used for calculating net profit for the company. With the use of merits and demerits of various budgets managers of Tech UK would be able to control their costs and future expenses. Apart for this, all those financial issues those are present in an organisation can be analyse by accountant and resolve them by using balance scorecard method in an effective manner (Amoako, 2013).

TASK 13

P1: Meaning of management accounting and their needs

In every business enterprises, management tried to manage their day to day financial transactions through using appropriate accounting system. These are helpful for an organisation to increase the profitability for an organisation. The primary motive of every business is to make use of vital accounting systems that are always assists Tech UK Ltd to regulate their operations in more effective manner (Klemstine and Maher, 2014). Management accounting is a systematic recording of all financial transactions that are incurred in an organisation during a specific period of time. by the help of a well organise accounting systems which is the only key to perform their operations at internal level. It is necessary to make evaluation of data through using appropriate tools and accounting standards. It will assist them to increase overall aims and objectives at the same point of time. The manager’s main aims are to enhance profitability as well as efficiency by proper allocation of organisation resources. It has been analyse that financial accounting and management accounting are having certain kind of similarities. Those are being discussed underneath:

Management accounting

Financial accounting

According to this accounting system which is aid the internal and external department of Tech UK to provide all necessary information to accountant so that overall aims and objectives can be attain in reliable manner.

While in case of this, all the policies and rules that are being made by organisation are used for the purpose of preparing specific financial statements during the time.

All the data which is being provided by owners are always assists them to future planning and growth for the company.

The main objectives of using this accounting are to provide essential information about financial position of Tech UK to their investors.

Every data and information are taken into account those are related with financial as well as non-financial at similar stage.

Only financial data is taken into consideration to make accurate report for the company.

This accounting only provides practical overview and information about the company so that future decision making can be done.

Only theoretical aspects are analyse through using reliable accounting rule and regulation for the company.

Various types of accounting system:

Cost accounting system: According to this accounting method which assists managers to control and operate their internal operations in effective manner. All the costs that are used for the production of product and services are taken into account at the same point of time. There are certain types of costing which are needed to be taken into consideration such as:

  • Normal costing: It is said to be an appropriate costing methods which a company normal incurred at the time of production of products with the same resources.
  • Actual costing: It is known as those costs that are actually incurred while production of one unit by Tech UK Ltd in their daily course of business.
  • Standard costing:  As per this costing this charged as per the set standard by the owner of the company. This seems to be used for the purpose of making comparison of actual results to that with actual one.

Inventory management system: According to this accounting system that play an essential role in analysing total position of inventory which is been kept by Tech UK in an accounting period of time. This seems to be more reliable only to make comparison or tracking of stocks that are being provided by suppliers for the process of production. There are certain types of inventory systems such as:

  • LIFO: It said to be cost flow assumption which can be helpful for the company in respect to analyse total moving of costs of products from stock to the cost of product sold. It means that last inventory which is kept by the company will be discharged first.
  • FIFO:  As per this method of stock valuation which is associated with cost flow basis that initial costs are firstly recorded and realise during the period of time.
  • AVCO: It is known as effective method of inventory control which is being used to taken into account the total cost of products still present for sales and divided through total sum of products at the initial stage (Lim, 2011).

Job costing system: It is known as one of the appropriate costing system which is being assign during the production cost to a single products or job of products. Basically, the job cost is used at the time when produce products are sufficiently different from one another. There are various types of costing system

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