I’m trying to study for my Economics course and I need some help to understand this question.
Management accounting is the process that business management is creating to manage their finances. It is more effective for business management to rely on cost accounting. There is different information that I have acquired to help in better planning and controlling of the business operations (Ameen et al.,2018). The development of the principle control of management accounting can help in making effective decision making while avoiding the threats that can interfere with the organization’s finances. The organization focuses on managing their funds and avoid the issues that can make them make losses instead of the profit to increase their investments.
The implementation of management accounting in the company helps the managers to have better planning to control their fund and select some of the resources that can lead to better organizational performance in generating an effective result. The information that is more helpful to cost accounting can make business management make a better decision based on the components (Cooper, et al.,2017). The funds can be controlled and manage d by avoiding the risks that can interfere with the utilization of the resources. The organization management has to rely on useful academic skills and some of the social responsibilities thus focusing on making better cash management and some of the numerical strategies.
Ultimately, there are some of the measures that require different interfaces of the affiliation procedure. The organization has to make better plans that consist of the rules and regulations while protecting the company’s financial statements against the threats. The organization has to rely on the management accountants to help in creating measures that can lead to better accounting strategies. The financial department should focus on updating the financial information through management skills to help in detecting and correcting errors that can be caused by fraudsters (Latan et al.,2018). Most of the business have developed different techniques to estimate the organization budgeting to avoid misusing the cash and resources on an effective cost accounting.
Ameen, A. M., Ahmed, M. F., & Abd Hafez, M. A. (2018). The Impact of Management Accounting and How It Can Be Implemented into the Organizational Culture. Dutch Journal of Finance and Management, 2(1), 02.
Cooper, D. J., Ezzamel, M., & Qu, S. Q. (2017). Popularizing a management accounting idea: The case of the balanced scorecard. Contemporary Accounting Research, 34(2), 991-1025.
Latan, H., Jabbour, C. J. C., de Sousa Jabbour, A. B. L., Wamba, S. F., & Shahbaz, M. (2018). Effects of environmental strategy, environmental uncertainty and top management’s commitment on corporate environmental performance: The role of environmental management accounting. Journal of Cleaner Production, 180, 297-306.
Managerial Accounting Learning Outcome
Managerial accounting refers to the field of accounting responsible for presenting financial information in a manner that can be used in decision making in a company. Prior to taking the managerial accounting class, I was conversant with the following set of skills and knowledge.
Budget preparation- this skill refers to the setting of the capital and resources required to undertake and complete a particular project. This skill also involves the dividing of capital in the various departments of an organization equally or according to the needs of each department.
Record keeping- this skill refers to the recording of events as they occur, like recording the minutes of a meeting and planning of other organizational events. This skill also refers to the deciding of the requirements of the events.
Preparation of basic financial statements- this skill refers to the preparation of accounts information for external and internal users. This skill involves calculating the expenditure of the organization, calculating the available cash both in liquid and cash form, and determining the number of debts of the organization.
Collaboration- this skill refers to being a team player in any project. It involves the ability of a manager to work with others in any given project with the least or no supervision.
Question 2 and 3
Based on the course content of this class, I acquired the following skills and their relevance
Planning- by use of the cost-volume-profits method of analysis, one can effectively and efficiently plan for resources and sales of a company. This analysis assists a person to decide on the best sales strategy that maximizes the profits of a company. Also, this analysis method assists a manager in determining the number of sales a company needs to cover costs and reach a particular profit target. This skill is relevant because it helps make sure that a manager chooses the best sales strategy more precisely hence avoid wastage of time and resources.
Price modeling- this skill involves looking at the various components like competition, production costs, and the price of raw materials to determine the appropriate prices of a product. It also involves looking at the various components like the resources used and the time spent in delivering a service to determine the cost of the service. This skill is relevant because it prevents the over-exploitation of customers through the over-pricing of products and also avoids cases of losing customers due to high costs as compared to competitors. This knowledge can be used to set the prices of services and products offered by a company.
Capital budgeting- this skill involves determining whether the long term investments are profitable enough to be pursued. This skill is relevant because it prevents a company from pursuing an investment that is not profitable. This skill can be used by a manager to advise a company on the best long-term investment that the company should pursue.
Performance analysis- this skill involves the evaluation of the performance of a particular situation in comparison to the set objectives. The analysis is made possible by the use of certain tools and processes like flexible budgets and standard costs. This skill is relevant because it ensures that a company’s performance is in line with its goals and objectives. This skill can be used in determining the organizational departments that are doing good and those that are not performing well.
Risk management and assessment- this skill involves the evaluation of potential risks that may impact a project or activity. There are various risk assessment methods like failure mode and effects analysis (FMEA) and hazard and operability analysis (HAZOP). This skill is relevant in determining potential risks and their causes. The knowledge in risk management and assessment can be applied in the future in determining and managing potential risks before they cause serious impacts.
Averkamp, H. (2019, August 12). What is responsibility accounting? Retrieved from Accountingcoach.com: https://www.accountingcoach.com/blog/what-is-responsibility- accounting
Belyh, A. (2015, September 14). Financial Statement Analysis: An Introduction. Retrieved from cleverism.com: https://www.cleverism.com/financial-statement-analysis-introduction/
Managerial accounting is just a growth of managerial elements of cost accounting. It provided me with the information to managerial with the aim that masterminding, sifting through, planning, and managing of business workouts ought to be conceivable in a fashion that is made up. The Principles control practice that is most beneficial in managerial accounting to make certain problematic decisions is taken that will drive by worth. Managerial accounting may be the plan of action of cash associated and non-financial information that is effective professionals. Managerial accounting gave information that can help bosses with managing activities in the company, and to choose exactly what to provide, where you should offer them, just how to source those simple things, and which professionals to produce utilizing the relationship’s advantages. The information gave by cost accounting to your managerial is effective for cost and control decrease through aspects of masterminding, power and control (Management accounting skill, 2016).
Managerial accountants are noticed due to the fact-value creators on the list of accountants. Whatever could be the kind of company, it recalls utilization for work, materials, and items that are various for collecting and disposing of this thing. Academic abilities, specific abilities, social and communication abilities likewise as business managerial abilities had been completely supportive associated with the component that is many made during functional work. More post that is broad abilities on financial and business abilities, cash associated managerial, organization, numerical and quantifiable methods, risk managerial, and strategy are proposed. Managerial accounting interfaces the affiliation’s procedure to its game plan. This guideline makes affiliations duplicate various circumstances to fathom their impact on making and regard that is protecting. The experience calls for a room that is joining and quantitative and adventure managerial abilities with different limitations. What’s needed for cash associated accounting are making the managerial to understand the criticalness of cost accounting (Skills and abilities of managerial accountants, 2019).
Management accounting skill (Sep, 2016), https://www.cleverism.com/skills-and-tools/management-accounting-skills/
Skills and abilities of managerial accountants (Nov, 2019) https://www.universalclass.com/articles/business/skills-and-abilities-of-managerial-accountants.html.