Accounting Assignment Sample

Introduction

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In this accounting assignment would gone to examine about different factors of accounting. This assignment would explore about accounting g concept utility in financial accounting. Therefore, the auditors and directors of company involvement in public company to make decision about business plan. Additionally, using of annual report will help to make understanding about organization financial condition. Cash budget and breakeven point importunacy and evaluation would be described to present different accounting tools. Another part would be use to present about importunate of consolidated financial reports use to evaluate financial position. Moreover, different type of cost and double entry system would be using to presenting accounting reports for analyzing different insights. 

Executive summary

This project has explained about different accounting tools and interpreted of organization. Those accounting tools importance in presenting analyzing has delivered in this project. Additionally, breakeven point, cash budget and financial statement of regarding organization has explain about financial strength has weakness. Furthermore, this aspect of financial statement also represent about financial insights of those organizations. Another, part of this project has explained about importance of double entry system. Different type of financial accounting that has explained financial condition to stakeholders. Additionally, important of financial statement toward stakeholders has derived about utilization of financial reports. Moreover, management accounting prospect in corporate industries has been derive to make report about importunate of accounting for corporate success. 

Task 1

Important role of accounting concept and standards in financial accounting 

Accounting to concept is being used as a method that has been used for presenting financial factors of organizations. Accounting concepts have been implemented by financial managers that have been focused over the “Revenue recognition” concept that has concentrated over the “profit and loss statement”. Through P&L statement organization has representing total revenue in a financial year that also explains about growth in revenue volume compared with previous years revenue. Revenue is the total cash flow of an organization. Moreover, this concept of accounting has established a P & L statement that has been used for evaluation of profit. 

Additionally, “historical cost” concept is being used in acquisition time that has produce present value of assets. Meanwhile, the cost accounting process is being considered as evaluation of assets. The concept of accounting using depreciation method helps in presenting the current value of an asset of an organization (Jasim and Raewf, 2020). Moreover, “Matching principle” in accounting follows a double entry system has been used to make the match end of accounting. Additionally, expenses are being posted in ledger books and those are expenses also being posted in P&L statements to match the profit of organizations. 

Explanation of characteristic of public limited company according to financial reports

A public limited company characteristic as considered as a legal entity that has been considered as an individual person in the legal system. Separate legal entity system has been used for legal documentation that has considered visual persons in the legal system (Demirkan et al. 2020). Another characteristic of a public limited company is that it is too easy to transfer the whole company by selling off equity. Therefore, the making limited risk of directors by distributing equity to different persons. Another, paid up capital is that amendment has been passed according to Companies Act. Moreover, limited companies have rights to put “limited” words after company names that have helped to represent a trustable organization toward stakeholders. Moreover, at least members are required to form a private company and the maximum number has no limit. Income statement of the organization has a presentation about profitability. Moreover, a cash flow statement is being presenting about the cash balance of an organization. Through balance sheet characteristics is presenting about assets and liabilities of an organization.

Usefulness of a public limited company’s annual report

Additionally, the balance sheet has been presenting assets and liabilities. Assets are being divided in current and non-current segments that also present the financial sustainability aspect of long term goals. Current assets of the company holding details reading inventory, provided loans and bills recoverable to others. Additionally, non-current assets contain details regarding building, properties, and motor vehicles that are tangible. 

Role of directors and auditors in public limited company

Directors and auditors are involved with an organization where they have some responsibilities. Directors are playing an important role for business development where acquiring new frames and expansion strategies both have been finished by them (Bonsón and Bednárová, 2019). On other hand, auditors are maintaining the accounting process of an organization. Additionally, auditors have recorded every financial transaction for maintaining accuracy and transparency in the organization. Additionally, auditors are being involved with presenting benefits and risk regarding acquisition. Financial reports also explain changes regarding financial growth or deficit in the present financial year. Additionally, the balance sheet has been presenting assets and liabilities. Assets are being divided in current and non-current segments that also present the financial sustainability aspect of long term goals. Current assets of the company holding details reading inventory, provided loans and bills recoverable to others. Additionally, non-current assets contain details regarding building, properties, and motor vehicles that are tangible. 

Analyzing useful element of financial reports of public limited company

In financial reports of a public limited company it has contained revenue, expenses and profitability. Through these elements stakeholders or potential investors evaluate the growth rate of the company (Bebbington and Unerman, 2020). Through analyzing ratios that helps to present different growth and deficiency in recent years. Moreover, in P&L statement also contained bad debts of the company, also considered as loss. These details about bad debts show relation with debtors that has present potentiality of growth in revenue generation.

Additionally, the balance sheet has been presenting assets and liabilities. Assets are being divided in current and non-current segments that also present the financial sustainability aspect of long term goals. Current assets of the company holding details reading inventory, provided loans and bills recoverable to others. Additionally, non-current assets contain details regarding building, properties, and motor vehicles that are tangible. 

Legislation impact over accounting process

Legislation is a guideline, which is being followed by auditors and managers. This legislation rules bind organizations to follow specific rules to filing tax and recording financial activities (Putra, 2019). Through legislation prices proper accounting process b\need to be followed by auditors otherwise it could affect the reputation of this organization. Accounting in organization provides professional activity that has made proper entries of financial activities. Moreover, legislation also provides ethical guidelines to present transparency in organizations. Additionally, impact of legislation over accounting is verified after accounting entries that have eliminated wrong and rectify records to provide appropriate reports to stakeholders. Including ethical standards in accounting accuracy of recording different records would be effective to present sufficient data in accounting reports.

Critical review of International Accounting Standards impact over limited companies

According to “International Accounting Standards 1” is presenting a guideline of financial statements that has an impact on positivity over limited companies. Moreover, limited companies filing reports following this IAS 1 guideline helps stakeholders to evaluate position and chances of growth in future (Kwilinski, 2019). Moreover, consolidated financial statements also gather information of every business activity that has been by a specific group of companies. Moreover, this consolidated statement process has presented total profit and loss toward stakeholders that help to understand specific results through the overall process of b business. The collection of consolidated results of a a group helps to present the details of total “assets and liabilities” of an organization. Through the ISA inventories related information is being considered about inventory level of a companion that has use as current assets of a company. Through IAS auditors and funds managers follow these rules and regulations where manipulation regarding rules and norms are not even included in this standard protocol (Doering, 2019). Moreover, in following IAS have influence financial reports of organizations that have presented different financial data. According to IAS depreciation are being deducted from tangible fixed assets that has reduced valuation of assets. Through this depreciation charge auditors could manipulate profitability of an organization to save tax. According to IAS depreciation has been deducted from revenue or gross profit where extreme percentage of depreciation would present less “profit before tax” that manipulate tax payable amounts. 

Task 2

Original entry and double entry accounts

Date	particulars	L.F	Debit	Credit
January 01	bank account	20000
	To capital account		20000
Narration	Being Started business with
January 02	Purchase account	155
	To K Smith		75
	To M Zainab		22
	To T Doggart		58
Narration	Being Bought goods on credit
January 05	cash account	187
	to sales		187
Narration	Being Cash sales
January 06	Wages	254
	To cash account		254
Narration	Being Paid wages in cash
January 07	H Maclean	35
	L Rory	42
	J Gardener	72
	To credit sale account		149
Narration	Being Sold goods on credit
January 09	Purchase account	259
	To Cash account		259
Narration	Being bought good for cash
January 10	Purchase account	155
	To M Zainab		57
	To T Doggart		98
Narration	Being Bought goods on credit
January 12	Wages	314
	To cash account		314
Narration	Being Paid wages in cash
January 13	L Rory account	32
	J Gardener account	23
	To credit sale account		55
Narration	Being Sold goods on credit
January 15	Shop fixture account	2550
	To store Ltd. Account		2550
Narration	Being Bought shop fixtures on credit from Store
January 17	M Zainab account	67
	To bank account		67
Narration	Being Paid M Zainab by cheque
January 18	T Doggart	20
	To return out ward account		20
Narration	Being returned goods to T Doggart
January 21	bank account	550
	To store Ltd. Account		550
Narration	Being Paid Store Ltd a cheque
January 27	K Smith	12
	To return out ward account		12
Narration	Being returned goods to K Smith
January 30	Cash account	6000
	To Kettle and Co Ltd account		6000
Narration	Being Kettle and Co Ltd lent by cash
January 31	motor van account	4000
	To bank account		4000
Narration	Being Bought a motor van paying by cheque

Table 1: Journal entries month of January

(Source: created by learner)

Date	particulars	Amount	bank account	Date	particulars	Amount
January 01	To capital account	20000	motor van account	4000
	20000	By balance C/D	16000
						4000
Date	particulars	Amount	wages account	Date	particulars	Amount
	To cash account	254
					By balance C/D	254
Date	particulars	Amount	M Zainab account	Date	particulars	Amount
	By purchase account	22
	To balance C/d	22
Date	particulars	Amount	Purchase account	Date	particulars	Amount
January 02	To K Smith	75
	To M Zainab	22
	To T Doggart	58
	By balance C/D	155
		155				155
Date	particulars	Amount	cash account	Date	particulars	Amount
	to sales	187	By wages	254
	To Kettle and Co Ltd account	6000	By balance C/D	5933
		6187				6187
Date	particulars	Amount	H Maclean account	Date	particulars	Amount
	To credit sale account	35
	By balance C/D	35
		35				35
Date	particulars	Amount	L Rory account	Date	particulars	Amount
	To credit sale account	42	By balance C/D	42
		42				42
Date	particulars	Amount	J Gardener account	Date	particulars	Amount
	To credit sale account	72	By balance C/D	72
		72				72
Date	particulars	Amount	Motor van account	Date	particulars	Amount
	To bank account	4000	By balance C/D	4000
		4000				4000
Date	particulars	Amount	Kettle and Co Ltd account	Date	particulars	Amount
	By cash account	6000
	To balance C/D	6000
		6000				6000
Date	particulars	Amount	sales account	Date	particulars	Amount
	By cash account	497
	By H Maclean	35
	BYL Rory	42
	to balance C/d	646	By J Gardener	72
		646				646
Date	particulars	Amount	K Smith account	Date	particulars	Amount
	By purchase account	58
	to balance C/d	58
		58				58
Date	particulars	Amount	T Doggart account	Date	particulars	Amount
	By purchase account	75
	to balance C/d	75
		75				75
Date	particulars	Amount	Capital account	Date	particulars	Amount
January 01	bank account	20000
	to balance C/d	20000
		20000				20000

Table 2: Ledger accounts month of January

(Source: created by learner)

Financial statements

Financial statements of Alpha Stores
Date	particulars	Amount	Date	particulars	Amount
	Purchases	68975		Sales	248783
	Sales Returns	1206		Inventory	2000
		Purchase Returns	780
	Gross profit	181382
		251563			251563
	Carriage Inwards	220		By Gross profit	181382
	Discounts Allowed	2474		Discounts Received	3135
	Wages	111220
	Insurance	7500
	General Expenses	39590
	Heat and Light	3880
	Bad Debts	965
	Net profit	18668
		184517			184517

Table 3: Financial statements of Alpha Stores

(Source: created by learner)

Break-even data

ABC Production Ltd
Particulars		Amount	Per unit
Sales revenue	900000	45
Direct wages	200000	10
Direct materials	300000	15
Variable overheads	120000	6
Fixed costs	205000	10.25
Profit of ABC Production Ltd	75000	3.75
Contribution (sales - variable cost)		780000	39
ABC Production Ltd next year
Particulars		Amount	Per unit
Sales revenue	990000	49.5
Direct wages	206000	10.3
Direct materials	285000	14.25
Variable overheads	111000	5.55
Fixed costs	212500	10.625
Profit of ABC Production Ltd	175500	8.775
Contribution (sales - variable cost)	879000	43.95
Breakeven point (contribution / fixed cost)		4.136470588	4.136471

Table 4: Breakeven point

(Source: created by learner)

Cash budget

Three month Cash Budget of Active Sport Gym
				February	March	April
Credit Sales (£)		3600	3825	3900
Cash Sales (£)		1200	1275	1300
Customer pays		22400	22400	24640
Total receipts (A)				27200	27500	29840
Less
Purchase	550	550	616
Expanses
Wages	11000	11000	11000
Light and Heat		550	594	594
Maintenance				13875
General expenses				7500
Total expenses (B)				12100	12144	33585
Cash balance				15100	15356	-3745
Carry forward balance				15100	15356
Reaming balance in cash				15100	30456	11611

Table 5: Cash budget of Active Sport Gym

(Source: created by learner)

Task 3

Evaluation of importance of consolidated financial statement

Consolidated financial reports contain about summarizes of all business of an organization that present fair and true value of financial activities. Moreover, consolidated financial reports are being used to present about total revenue of the company that has evaluate performance. Through consolidated P&L statement management present overall loss and profit. Due to consolidated P&L statement management presents all expenditure of all business that has been subtracted from the total revenue to present total net earnings (Karabarbounis and Neiman, 2019). Additionally, this consolidated statement has made sustainable reports where any segment of business faced loss in the current financial year that has been covered up by t\other business earnings. Also consolidated statements present segment wise revenue, expenditure and profit that have evaluated higher profitability business and low profitability business of the limited company. Therefore, the consolidated balance sheet has a president about total assets of the company that has been presented by segment wise growth in assets from every business where stakeholder could understand about assets gained business. This use of consolidated balance sheets also presents liabilities related information that produce higher liability oriented business where management could focus more for development. 

Explanation of type of costs involved and pricing methods used by organizations

There are different types of costs that arise in an organization where direct cost is the essential cost for continued production. Direct costs are labor and materials both are considered as production costs (Rosenthal, 2018). Moreover, indirect costs are rent, administrative expenses, and depreciation. More indirect costs are considered in organization as primary indirect costs. Additionally, variable cost is being considered as those costs depend on the unit of products produced like sales commission, raw martial reloaded cost and labor cost. During production of products those are not fixed for organizations; those are averages over production quantity. Additionally one more a cost is oriented with organizations this is controllable cost, which means wastage reading cost. Wastage is the primary issue of all production related organization wastage could be controlled by implementing specific strategy. 

Pricing model is a act of financial activity that sets the price of products to gain marginal benefits from sales. There are four types of pricing models being used for establishing pricing of products. “Cost plus” pricing model is used by markup cost that considers a percentage that is being added after total cost has been made by the organization. As an example of 10 percent markup cost is being used to set pricing of products where product total cost is 100 then selling price would be (100+10) = 110. 

Another pricing model is “Target Return Pricing'' is based on the target of return from investment. Moreover, this pricing model is being considered as management makes a target over return on investment that has set the price of products. For an example of this pricing model total investment is around 100000 where management has decided to return about 130000. This has to be the total selling price of all units of production that has been divided by total quantity of products. Through each product the sale price has been established by selling price. 

Therefore another pricing model is “value based pricing” that depends over products demand according to customer's demand. Due to products being used in reasonable basis demand where management has decided product price according to consumers demand. 

Moreover, “psychological pricing” is another pricing model to make the price of products. This segment of pricing method has been presenting the influence consumers have to make demand in the market (Andiola et al. 2020). This process of method is being implemented to provide about actual methods of pricing where products selling price is being set by demand of consumers. Management influence through strategy has created demand in the market that has raised demand for products. 

Importance of double entry system 

The double entry system is being considered about double entry of every financial activity that has been posted in financial reports. This double entry system has been implemented as a double effect over financial statements (Tiwari and Khan, 2020). This process of double entry has presented important over ledger accounts that have produced both side effects over every ledger statement. Due to this process of accounting system that has presented every detail of planning of projects of making stability in the entry system. 

Changes implication in breakeven costs and revenue with preparation of budget

Break-even point is the factors where an organization has started earning more than investment. Moreover, this process of analyzing has set a target for sales volume to get more revenue to get profit. For example, the initial investment of an organization is then break-even point would be more than 100000. Change in cost and revenue would change the break-even point of the organization. 

Usefulness of financial statements to stakeholders of business organizations

Financial statements are useful to stakeholders that have presented the importance of evaluation of an organization. This process of P&L statement has been projecting expenditure and profitability. Moreover, all expenditure of an organization has been projecting about employee’s future in this organization that has presented about employees importance in organization (Hörisch et al. 2020). Moreover, investors are another stakeholder of an organization that helps investors to make decisions over investment. Investment in organizations is being used as stakeholder’s understandability about organization current condition. Suppliers and creditors are reliable to organization due to these stakeholders playing an important role in decision making. 

Review of usefulness of management accounting principal makes sure corporate success

Managerial accounting process has included overall posting of all cash receipts and payment related entries that has been conducted about presentation of a financial statement (Karale, 2020). Managerial accounting follows specific rules and guidelines about organization understanding financial data. Managerial accounting has involved the asset quality of an organization that has present growth of assets in the current financial year. Controlling business operating method that analyzing financial statements has reduced cost to make more profit through whole operations. 

Moreover this process of managerial accounting presents insights in detail about financial aspects that have evaluated the progress of a company. The corporate success depends on profit generation where the accounting system has evaluated and proposed some recommendations for future growth. Additionally, this process of accounting has separate each department for calculating growth or deficit that also present those points that need to focus for corporate success (Maheshwari et al. 2021). Additionally, the success of corporations depends on making use of the accounting system. Through strategic accounting process management maintains transparency in the accounting system that attracts investors to participate in corporations through investing large funds. Decision making and planning both are relevant activities for business growth that depend over managerial accounting.

Reference list

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