AS and A Level: Accounting & Financial Management essays
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190 AS and A Level Accounting & Financial Management essays
- Marked by Teachers essays 4
Evaluate how Cash flow forecasts, Break even charts, Profit & Loss statements and Financial recording systems can contribute to managing business finances Distinction3 star(s)
They are the standard way to find where your business will peak and trough in its revenues. It is also a handy way to see how much money your business has recently if it is up to date, since it lists closing balances. You can also check your trading profit (Sales capital minus costs) and revenue, (Capital from sales) whilst also having your capital from last month and costs from the current month easily displayed. These are helpful for a business because they are quick and relatively easy to make. They can be flawed sometimes because people can sometimes not make realistic estimates or consider all factors, which can result in the company being too optimistic or pessimistic in spending and sales.
- Length: 1112 words
I have identified different types of ratios using financial information from the company named First communication plc. I have identified how these ratios help the user to understand the financial position and performance of the business.3 star(s)
current ratios = current assets current liabilities = ratio Most of the short term creditors would prefer high current ratios as it will reduce their risk. Shareholders may prefer a lower current ratio so that more of the firm's assets are working to grow the business. First communication plc liquidity ratio 2008 2009 665.1 = 2.3 451.7 = 1.10 283.6 409.7 First communication result in 2008 is 2.3 in 2009 is 1.10 2009 it was 1.10. According to this result 2008 was better than 2009.
- Length: 855 words
In this assignment I will talk about why costs and budgets need to be controlled and the advantages and disadvantages of controlling costs and budgets. I will also explain what can happen to a business if costs and budgets are unmonitored.3 star(s)
In a business organisation, a budget represents an estimate of future costs and budgets. Budgets may be divided into two basic classes: Capital Budgets and Operating Budgets. Capital budgets are directed towards proposed expenditures for new projects and often require special financing. The operating budgets are directed towards achieving short-term operational goals of the organisation, for instance, production or profit goals in a business firm. It is crucial for a business to control its budget. Budgets help the business to determine whether they have enough money to raise the business or generate more profit.
- Length: 1142 words
This would improve the performance and success of the business overall. If a business manages its costs efficiently then it would improve the success and performance of the business. If a business employs the right amount of workers it needs then it would reduce the cost of the business. Another benefit if the business employs the right amount of staff is that the business will have more productive workers. Another advantage if the business employs the right number of staff would be that they would have enough money for other areas of the business.
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Explain what is meant by capital and revenue expenditure, indicating why the distinction is important.
Therefore, extra money will be needed over the previous sales scale to obtain larger premises, more equipment and workforce. To put it simple, Perks & Leiwy (2010) indicated that capital expenditure is spending on items which will be shown on the balance sheet. Due to it adds to the purchase of fixed assets, under which the heading 'non-current assets', also, including the maintenance and repair of buildings and machines which are as depreciation as well. These amounts are carried forward as part of the next year's opening statement of accounting position due to its contribution on several periods' revenues (Thomas & Ward, 2009).
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Balance Sheets. The balance sheet shows an overall financial view, this can be helpful in purchasing decisions.
A balance sheet is a financial statement that reports the assets, liabilities, and owner's equity at a specific date. The balance sheet is a snap shot of the financial situation at a specific time. With the economy suffering so severely this important sheet is crucial to benefit us and see what changes may need to be made financially. The asset part of the balance sheet list everything the company owns, like cash in their banking accounts etc., inventory, money owed to them from customers and long term assets such as property, land or equipment.
- Length: 480 words
Shareholders equity is money that is left over that belongs to owners if the company sells. The balance sheet is set up in a simple manor, which is fairly easy to read. The income statement will give a wealth of information about a company's earning status over a certain time period. This statement shows how a company is fairing financially. The income statement reports a company's profits, losses, shares, net income, operating expenses as well as income taxes.
- Length: 640 words
Dear Ms C Walsh, Im writing to inform you about the different sources of finance that are available to you.
This shows that you can have full us of the equipment without having to pay the full cost of the item in straight on go. Over the time of the lease, the leasing company will maintain the price of the item plus their charger which means you only need to deposit a small amount at the start of the lease. At the end of the lease you have a decision to choose if you want to carry in leasing at a low rate or to sell the product to another person or to another company.
- Length: 1966 words
The purpose of accounting is to keep track of transactions and recording revenue and expenses are important business processes often applies to an accounting department or a financial manager.
However the profit and loss account provides a perspective on a longer time-period. Monitoring business activities are Records will be updated on a regular basis this indicates how the company is doing for example there sales, receiving payments, paying expenses. The owner would realise if the money going it seemed to be increasing while the sales were going down. Controlling the business accounts describes the Accounts receivable and accounts payable are the most commonly used in control accounts, and their balances are controlled of the accuracy of associated subsidiary records. The manger should be responsible for planning, monitoring, and controlling all the resources they are responsible for.
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So the assets will be revalue and thus in the combined balance sheet will be shown at revalue price. The goodwill will b determined at the price paid over the revalue assets less liabilities of the acquiring entity. The firm may have to deal with changes in the external environment, give 3 examples with brief descriptions. Answer: The examples dealings with changes in the external environment are cited as below: 1. Law and Regulations-The laws and regulations prevailing during the time affects the strategic decisions. For an example there may be new rule that an acquirer has to make a public announcement before an acquisition.
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The purpose of this paper is to analyze the decision of pursuing an MBA or to continue with the existing job. Will MBA would add value or my existing job returns will be more. The paper has helped us to learn the importance of capital budgeting.
analysis which provides us gold standard answers. "Thomas Ittelson (2009), Financial Statements Chapter 21, 2009" MBA returns Vs Job return is the comparison between my existing job and my decision of pursuing an MBA. In order to find the end result we have taken into account the Cash inflows and outflows. I have to take an important decision of my life of pursuing MBA or to continue with my job. The decision of this can only be possible if I compare the returns which I will get after doing my MBA.
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The internal users are including the managerial accounting from inside of the business. Owners use accounting information to make buy, sell or keep decisions related to shares. Owners use this accounting information to indentifies the firm is gaining or losing. They also make the decision on whether to increase or decrease their existing ownership in the firm. Managers also are the one of the users of accounting information. Managers of the business will want to know how things are going. They need financial information in order to plan for the future; they then need more up-to-date information in order to check whether actual performance is on target.
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Internal control report Marlene Enterprises. This report focuses on the internal control over cash, which ultimately assists in the managing and the keeping track of cash.
However, receipts with errors should not be destroyed. They should be marked with 'cancelled' and to be kept for auditing and other purposes. The cancelled receipts should be filed in numerical order since that all receipts, or source documents in general, should be able to be traced. Entries should be recorded in a cash remittance book when cash is received through mail. No cash should be taken from the cash register to pay for other expenses. Cash in the cash register should match the tape recording the daily cash sales.
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Business Skills in travel and tourism. Scenario: you have just finished school and are now working as a travel agency. The agencies manager has decided to create a handbook on financial and administrative procedures. As you have just received training and
You would have to record the customer's details and the details of the product that the customers booked. A copy of this information needs to be given to the customer so that he or she knows what has been paid for and to give the customer peace of mind Invoices Invoices must be sent out with every item that has been bought on credit. This is done because the customer has to nave a statement of how much he/she has paid for the product and the balance which is owed to be paid. An invoke should include all the details of the product or services that are being purchased as well as a statement of the account to date and amounts received.
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Calculation of Future Values Exam Question - Given the recent drop in mortgage interest rates, you have decided to refinance your home.
(Refer P.V.A table) = 17,077 for 1 year 12 = 1,423 for one month @ 8% Q2. Ramesh and Laxmi wish to buy a new home. The price is Rs56, 500.00 and they plan to put 12% down. New Rahat Savings and Loan will lend them the remainder at a 12% fixed rate APR (Annual Percent Rate) for 30 years, with monthly payments to begin in one month. (Ignore taxes.) Suppose Ramesh wants to pay off the loan in 15 years.
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The balance sheet must reflect financial positions of the business alone. The Continuing Concern Concept The continuing concern concept assumes that a business will continue to operate unless it is known that it will not. This is also known as the going concern concept. The Principle of Conservatism The principle of conservatism provides that accounting for a business should be fair and responsible. In their work, accountants are required to make evaluations and estimates to deliver opinions, and to select procedures.
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Income Tax Liability Case. Before advising Ian Smith we need to perceive following technical questions whether any of the proceeds from the sale of his furniture on 14th, 25th, 27th and 30th January 2009 should be included in his assessable income.
Application of the indicators There is no simple answer to whether you are in business or not, it depends upon the facts in each case. However, we can use the following indicators to help us determine whether Ian's above activities amounted to carrying on a business or not. Is there repetition and regularity to above activity? In Ian case the transaction has been commenced not before then 14 Jan 2009 and after 30 Jan and till April 2009. Therefore it is come into view that Ian is playing a role irregularly as the work is not as much as profitable
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Ratio 1. Leverage ratio = total equity÷total assets . 2.Capital Ratio = Total Equity ÷ sum of risk-adjusted assets . I A4. In order to restore its capital ratio level to the legal minimum a bank has two major options; 1. Increase total equity * Find new investors to put in money and thereby increase Equity * Delay the payments of dividends thereby increasing retained profits. * Improve profitability, either by increasing its loan rates & bank charges, or by laying off staff and closing underperforming branches (or both).
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Your investors might want a set rate of interest and a final repayment date. It is very common for friends and family to lend money at a lower rate of interest that a bank or another financial institution. If the business is struggling when it is a couple of months into trading, these repayments may be difficult to meet. Friends and family may be a little more sympathetic if you cannot make a month's payment and maybe cannot afford the whole amount the next month.
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Budgets - An explanation of the use of budgets as a means of exercising financial control in Name It Ltd
Break-Even: Businesses should aim to break even to ensure they are going to survive in the future. Break-even is where the business doesn't make enough sales to make a profit but they make enough sales to avoid making a loss. The point of break-even is shown on a graph that businesses produce to see how well they are doing financially. The below diagram shows a break-even chart. http://www.bbc.co.uk/schools/gcsebitesize/business/finance/profitabilityrev2.shtml To calculate break-even: Break-even point = fixed costs (unit selling price - variable costs) The calculation of break-even tells you how many units of a product you will need to sell in order to break-even.
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The final accounts should be a true reflection of the financial state of a business on a particular date, however, there are several ways that a business can make its final accounts look good or even bad, therefore Im going to talk through the differen
D Simpson's accounts are all good but their may have been ways he changed them, I'm going to discuss the different way he may have changed them, this is known as window dressing. Intangible assets Intangible assets are something that can't be picked up or touched. For instance a customer may make a purchase on an item because of its brand name, or reputation. This is a value to the business, if the business is to be sold this shows a big value to the business from a brand name.
- Length: 1035 words
Finance case study. Explain two methods that John and Jackson might have used to finance the business start up.
Explain two methods that John and Jackson might have used to finance the business start up. (4 marks) AO1: Kn: State to possible ways of financing AO2: Ap & An: Provide a detailed explanation The first method that can be used to set up their business is their own savings, this is beneficial as there would be no interest charged on this money, however if the business does not do well they would have lost their money. They could also ask friends and family to invest in the business although to do this they would need to set up as a private limited company.
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In this essay there will be a discussion of three main points. Firstly, the history and development of management accounting. Secondly, factors which influenced management accounting to change its role. Finally, the new management accounting role. The history and development of management accounting: There are not many publications on the use of accounting data's history for decision making purposes. The aspect of decision making led to the current development of management accounting (Parker, 1994, p: 408). Focusing on the management accounting history is important to explain the current and future circumstance of management accounting.
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Secondly, spotlight on the new so-called "hybrid" management accountant. The authors state that There were some external factors have been claimed by managers and accounting directors to influence management accounting to change. Firstly, the global competition of the economic state of the 1990s. The extent to which the claims of increased competition, rather than effects from the economic circumstance, which that is accountant and managers' conception and how they can observe the economic climate is actual. If it does matter to increase the competition and the focusing on consumers, that can be done by just rhetoric.
- Length: 1307 words