University:
Eastern Kentucky University
Course:
ACC 202 | Introduction to Managerial Accounting
Academic year:

2022
Views:

74

Pages:

2
Author:

rehinhea0c

Explain different types of management accounting reports. The various management accounting reports help the management in preparation of appropriate management reports which counts on their forecasts for making critical business decisions. They provide managers with accurate and reliable statistical and financial information. The various reports prepared by the management and their benefits are discussed under: 1- Budgeting Reports – Budgetary Reports sets out the plan to analyse the company performance while making evaluations about the department’s performance and control costs. For budget preparation, actual expenditure occurred in past periods get utilised. These budget reports are used to provide incentives to employees that motivate them to achieve desired objectives. Forecasting future budget based on these reports helps the organisation to integrate the efforts of various departments towards overall objective of the company. 2- Accounts receivable aging report – This type of report is concerned with managing account receivables for these companies which are engaged in extending the credits to their customers. Proper segregations of invoices are made for the customer’s balances about how long they have been owed. It points out the problems associated with company’s collection process. An analysis can be made about the company’s credit policy and the need to tighten the credit policy. This ensures reducing old bad debts and maintaining liquidity of the company. 3- Job cost reports – Job costs reports are concerned with identifying cost, expenses, and profitability of each particular job. An evaluation can be made about the earning aspect of the projects and so that the company can introduce its efforts on those concerned while reducing their efforts on less profitable business activities. These reports also evaluate the cost while the project is in progress so that areas of waste can be taken care of and the project can be made profitable and workable. 4- Inventory and manufacturing reports – Companies involved in manufacturing processes prepare these types of reports so that their manufacturing and inventory process can become more efficient. These reports contain labour cost, per unit overhead cost and wastages concerned with inventory which provides managers for the comparison between different assembly lines and to see the opportunities for improvement which can be exploited by various departments and their employees. 5- Performance reports–The differences calculated on a comparison of actual results with budgeted performances are analysed and information regarding this are presented in performance reports. These are generally prepared yearly however they can be prepared monthly or quarterly too. 6- Order information report–The order information report helps management to see the trends in their business efficiently and effectively. Various types of reports prepared in this type of reporting help integrating management operations to achieve low cost on placing of orders and their management. 7- A business situation or opportunity reports – The reports are prepared for management so that they can be well aware of the occurrence of a particular event. The preparation of well drafted situation or opportunity report helps the management with taking important business decisions with regard to the events and their understanding