Lo1 examine the context and purpose of accounting

Student Name/ID Number

Unit Number and Title

Unit 5: Accounting Principles (level 4)

Academic Year

2021-2022

Unit Tutor

Internal Verifier

Assignment Title

Management accounting principles                                   

Issue Date

18^th August 2022

Submission Date

30^th November 2022

Submission Format

The submission is in the form of an essay; a complete portfolio of financial statements; Ratio Analysis; Cash Budget on Spread sheet.

The portfolio of Income Statements should demonstrate calculations using different types of the busineeses.

The reports should be written in a concise, formal business style using single spacing and font style calibri and size 11. You are required to make use of headings, paragraphs and subsections as appropriate, and all work must be supported with research and referenced using the Harvard referencing system. Please also provide a bibliography using the Harvard referencing system. The recommended word limit is specified.

CALCULATIONS MUST BE DONE ON MS EXCEL.

Unit Learning Outcomes

Lo1 examine the context and purpose of accounting

Lo2 prepare basic financial statements for unincorporated and small business organisations in accordance with accounting principles, conventions and standards

Lo3 interpret financial statements

Lo 4 prepare budgets for planning, control and DECISION-MAKING using spreadsheets

Transferable skills and competencies developed

Learning of Accounting rules and regulation

Using of MS Excel for simple and complex calculations 

 Vocational scenario

You have just joined a Chartered Accountant firm as a Trainee Accountant. The firm is in business since long and has many clients requiring the Accountancy and Financial Services, as part of undergoing training you have been allocated following tasks to complete. 

Scenario 1

A client mr. freddy a sole trade and have just taken out the trial balance as at 31^st December 2021 and want you to prepare its final accounts.

Additional Information:

v  Inventory at 31 December 2021 was valued at £89,404.

v  Wages due and Unpaid are £1,500.

v  Rent paid in advance £1,100.

v  Depreciation to be provided for as follow; £9,040 on office equipment.

v  Outstanding telephone charges £800.

Scenario 2

Scot and Joplin are in partnership. They share profits in the ratio: Scot 70 per cent; Joplin

30 per cent. The following trial balance was extracted as at 31 December 2021. 

The following notes are applicable at 31 December 2021.

v  Stock 31 December 20X7 $41,312.

v  Office expenses owing $240.

v  Provide for depreciation: motor $5,000, office equipment @$2,000.

v  Charge interest on capitals at 5 per cent.

v  Charge interest on drawings: Scot $300; Joplin $200.

Scenario 3

The treasurer of the Long Lane Football Club has prepared a receipts and payments account, but members have complained about the inadequacy of such an account. She therefore asks an accountant to prepare a trading account for the Café, and an income and expenditure account and a balance sheet. The treasurer gives the accountant a copy of the receipts and payments account together with information on assets and liabilities at the beginning and end of the year:

 Long Lane Football Club

Receipts and Payments Account for the year ended 31 December 2020

Additional Information                                             31.12.2019.                      31.12.2020

                                                                             $                                            $

Stock in the bar- at cost                                                   4,496                                   5,558

Owing for bar supplies                                                   -                                       4,340

v  The land and football stands were valued at 31 December 2019 at: land $40,000; football stands $20,000; the stands are to be depreciated by $2,000 per annum.

v  The equipment at 31 December 2019 was valued at $2,500, and is to be depreciated at $500 per annum.

Scenario 4

Silver Stone Ltd Profit and Loss account

Silver Stone Statement of Financial Position 

Scenario 5:

K. Brothers wish to approach the bankers for temporary overdraft facility for the period from October 2010 to December 2010. During the period of this period of these three months, the firm will be manufacturing mostly for stock.

v  50% of credit sales are realized in the month following the sales and remaining 50% in the second following.

v  Creditors are paid in the month following the month of purchase.

v  Wages are paid each moth

v  Depreciation per month is $500.

v  Rent paid in September and December is $2,000.

v  Sundry expenses are $1,000 per month.

v  Estimated cash on 01-10-2020 is $50,000/-

Task 1- (LO1)

Commence your Report by examining the purpose of the accounting function within an organization also Assess the accounting function within the organization in the context of regulatory and ethical constraints 

Accounting function provide key services to the business do your research and evaluate the purpose of the accounting function in meeting organizational, stakeholder needs and expectations and critically evaluate the role played by accounting function in making informed decision and how accounting function help business to meet different stakeholders needs in complex business environment. 

Task 2 – Scenario 1, 2 & 3(LO2)                                                      

 From the given scenarios above Prepare financial statements from the trial balance of sole traders, partnerships and not-for-profit organizations, all relevant Financial Statements must be produced for all the 3 types of the business by making proper adjustments to show your understanding of accounting principles, conventions, and standards. MUST BE DONE IN MS EXCEL

From the data presented in scenario 3 calculate and present financial ratios from the given financial statements (3 Profitability, 3 Efficiency, 2 Liquidity ratios are required). Compare and critically evaluate the performance of the organization over time using ratios calculated. Make justified conclusion and recommendations to business to improve its performance. CALCULATIONS MUST BE DONE IN MS EXCEL

Task 4- Scenario 5 (LO 4)

From the data given above Prepare a cash budget using a spreadsheet. Discuss the benefits and limitations of budgets and budgetary control systems for the given business. Identify the cash problem this business might face and recommend corrective actions that can be taken by management by justifying how that solution can ensure better decision making and efficient use of resources in business. CALCULATIONS MUST BE DONE IN MS EXCEL

Evidence checklist (summary of evidence required by student)

Task 1: Essay (1,000 to 1,500 words)

Task 2: Financial Statements

Task 3: Report and Financial statement analysis

Task 4: Report and Cash Budget