Unit 5 Management Accounting Kensington College of Business
Introduction
Cost has enhanced the overall scope of the business as in the situation of tough external market competition the role of an entity will increase. Nero Ltd has been selected for this project report as this stresses on the management accounting techniques in assessing their internal efficiency in relation to the external market. It emphasizes on the costing techniques, capital budgeting techniques in assessing the ability of an entity.
Part A
The principles of management accounting will help an enterprise as it serves the needs of internal management to improve their existing business conditions. These principles will assist the top management in making decisions in their business related to setting of goals and the objectives (Braun and Tietz, 2013). It stresses on all other aspects such as internal business processes, resource application and creating additional value for an entity by increasing customer satisfaction. This terms are used commonly in management accounting whose primary aim is to reduce their overall cost involved in an enterprise. There are two accounting management principles which can be used by an enterprise which are given as below:
Principle of causality- The business transactions are linked with an enterprise by forming causes and effect relationship among them in order to align all transactions of an entity by scrutinize all of them.
Principle of Analogy- Another principles which cab be used by an enterprise in which casual insights are developed by an entity that defines all kinds of management activities in the business entity.
The above two principles will able to serve the needs and expectations of all the clients in overall business entity that helps in catering the needs and expectations of all community and its various kinds of customers.
Management accountant play a significant role in an enterprise as it is regarded as one of the important aspect of which is a function of tracking internal business cost. The roles and responsibilities of the accountant play a crucial role in the business entity as it helps in reducing the work load of the management by reducing their cost. The role of accountant includes collecting recording and reporting all kinds of financial information by preparing budgets. This preparation of budgets will help an entity in properly allocating their all kinds of resources in the best suitable manner. The primary aim of this enterprise is to cater all future needs of the business by preparing variety of budgets in an enterprise.
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