Question

1. Define management accounting

2. Define

i. costing system

ii. budgeting system

iii. performance measure system

iv. cost management system

Answer 1

1. Management accounting can be defined as a process of providing financial information and resources to the managers in helping out in the process of decision making. it is also said as application of professional skills and knowledge in the preparation of financial and accounting information in a manner in which it will assist the internal management in the formulation of policies, planning, and control of the operations of the firm there are some tools of it like costing , business analysis and economics.

in simple terms it can also be said that Management accounting means analyzing and recording business activities for internal company use in an effect to increase efficiency and productivity.

2.

i). costing system-in a business there are several costs which incurred , due to incurring of these activities, a costing system is designed to monitor these incurred costs.The system is comprised of a set of forms, processes, controls, and reports that are designed and  report to management about revenues, costs, and profitability

there are two types of costing systems:

a). job costing system: it works best for unique products, such as custom-designed machines or consulting projects

b).process costing system: where the target is high like manufacturing mobiles phone about 85000 units in short terms it works well for large production runs

ii). budgeting system: it is the process of preparing detailed statement of financial results that are projected for certain period of time.the overall purpose of budgeting is to plan differ . its is the plan where you balance expenditures against income so as to assure that solvency in the organisation is maintained

iii).performance measure system:it is the process of collecting, analyzing and reporting information regrading the performance of an individual , group. it is a system that creates and manages key performance of an organisation or group.

iv). cost management system: it is the process of planning and controlling the budget of business. this system allows a business to forecast incurring expenditures to help reduce chance exceding the budget