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Essay / Research Paper Abstract
This 3 page paper looks at the difference between financial and management accounting, and then considers the use of cost profit volume analysis and the way that it may be useful for a business. The bibliography cites 4 sources.
Page Count:
3 pages (~225 words per page)
File: TS14_TEFAcCVP.rtf
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Unformatted sample text from the term paper:
by the annual accounts and the way in which they are used to compare year with year. The aim of annual account is to provide external stakeholders with needed information,
this may include official agencies for tax assessments, it is a review and a report, the defined user group for the annual account are the shareholders (Elliott and Elliott, 2007).
These are historical by nature and review the year, meaning they have limited value in terms of the day to day management. If the annual accounts show a problem it
is likely it has been present for a period of time. Management accounting is different in approach, the financial accounts include
many theoretical costs rather than real costs as seen in the bank accounts, for example depreciation is not an invoiced charge it is a financial accounting tool (Chadwick, 2004).
Management need more that this, they need to have up to date figures on a daily or weekly basis form which they can monitor the companys performance, control costs and
the bank accounts, plan for the future as well as formulate goals, and focus on the specific issues that require attention. It is also useful to understand that management accounting
also allows a greater amount of planning giving costs for different scenarios so it may also be used as a planning tool (Chadwick, 2004).
In short management accounts can be seen as the preparation of accounts that serve the purpose of the management of the company. This may include the cash flow forecasts
on a week by week or month by month basis, the individual department accounts so that problems may be identified (Chadwick, 2004). They provide the relevant information to aid with
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