• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Compare the final accounts of two organisations explaining the similarities and differences.

Extracts from this document...

Introduction

M1 Compare the final accounts of two organisations explaining the similarities and differences Similarities and differences between the sole trader and the limited accounts Both of the companies have the same structured profit and loss account but they are still different. If we have a look at the profit and loss account we will see that they both have sales, opening stock, and purchases, less return until it is reached by the overheads. This also shows that they also have different currencies, the subway Groningen deals with the Euros and the subway LLC deals with American dollars but in millions as subway Groningen dealing only with thousands. Not forgetting that the subway in Groningen is a franchising company and the subway in America is LLC. Groningen subway only does it profit and loss account for its own company and the subway in America is for the whole subways that are franchised. What is also different is that the profit and loss account from the subway LLC is that they have a share of profits; this means that this company has shareholders which are them. Profits are usually distributed to shareholders in the form of a dividend some profits may be retain by the business as working capital which will be seen in the balance sheet. ...read more.

Middle

A balance sheet is also a final account a business should provide. A balance sheet is like the picture of what a business owns, owed and is owed at a specific time. They are drawn up on a specific dates, normally the last day of a business financial year and the contents of the balance sheet are a picture of the firms situation on that date. On the balance sheet we see the building the business owns, the equipment it uses, the stock it holds, we show how much money the business is owed and how much money the business owes. We also see where the money is come from to buy all their assets of the business. A sole trader do not have to prepare a balance sheet either but it is good for them to see what is being owed, owes and it has been financial but a partnership company should make one so it can be submitted to the Companies House and shareholders. All business should prepare full sets of accounts. Here are numbers of reason why this should be done: * Legal requirements- this applies to all limited companies. The form and timing of presentation of accounts, laid down by law and by the accounting bodies * Tax requirements- if a business turnover is more than �15000 then a full set of accounts can be requested by the Inland Revenue. ...read more.

Conclusion

helps in calculating the net profit of the business Accounting cost concept This states that all assets are recorded in the books of accounts at their purchase price, which include cost of acquisition, transportation or even installation. It means that fixed costs like buildings, plan and machinery, furniture, etc are recorded into the books of accounts. It may be clarified that cost means original or acquisition cost only for new assets and for the used once, cost means original cost less depreciation. The cost concept is also known as historical cost concept. The effect of cost concepts is that if the business entity does not pay anything for acquiring an asset this item would not appear in the books of accounts. So, good will appears in the accounts only if the entity has purchased this intangible asset for a price. To the cost concept: * Required assets to be shown at the price it has been acquired, which can be verified from the supporting documents. * It helps in calculating depreciation of fixed assets * The effect of cost concept is that if the business entity does not pay anything from an asset, this item will not be shown in the books of accounts. Leticia Grinuva IBS 3 Unit 1 Exploring business activity M2 Dhr Huizinga Leticia Grinuva IBS 3 Unit 1 M2 Dhr Huizinga ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. The purpose of this report is to explain the legal and regulatory influences on ...

    following components of financial performance by results of continuing operations (including the results of acquisitions), results of discontinued operations, profits or losses on the sale or termination of an operation, costs of a fundamental reorganisation or restructuring and profits or losses on the disposal of fixed assets; and extraordinary items.

  2. The business plan

    But in winter, they only make a loss to my business, so I decided to pause this service in winter which means I can avoid this loss. Promotion-----The methods of promotion are important because it projects a specific image to the target market.

  1. Unit 5 Introduction to Accounting

    Armed with a cash flow forecast, however, it is possible to consider other options for solving the problems, as shown below: Dealing with cash flow problems Implications Obtaining credit from suppliers Once a business has been trading for a little while, suppliers may be prepared to give credit, so that

  2. Exploring business purposes

    A city landmark, the "four-cylinder" tower at the Olympic park is the nerve centre for an organisation which covers over 150 countries. The worldwide production network of the BMW Group is the backbone for growth in all our global markets.

  1. Investment Portfolio - Shares and other investments

    -1.19% 14-Feb-08 17.55 1.05 6.36% 5748.2 132.9 2.37% 13-Feb-08 16.5 -1.05 -5.98% 5615.3 -54.1 -0.95% 12-Feb-08 17.55 -0.54 -2.99% 5669.4 66.3 1.18% 11-Feb-08 18.09 -0.44 -2.37% 5603.1 -120.8 -2.11% 8-Feb-08 18.53 0.52 2.89% 5723.9 55.6 0.98% 7-Feb-08 18.01 0.31 1.75% 5668.3 -9.3 -0.16% 6-Feb-08 17.7 -1.69 -8.72% 5677.6 -174.5 -2.98%

  2. Complete Report on Askari Commercial Bank

    Its present focus is on managing the 'Askari Master Card'' brands, accepted worldwide also in 4000 locations in Pakistan. 2005 was a significant year for the CCD, as it registered a three-fold profit increase over the preceding year, despite tough competition and decreasing margins.

  1. Mr Carter has requested that I research the financial needs of potential and current ...

    At this stage of life the appetite to risk is quite high. This is because if they have a sum of money they will invest into, whereas if they lose the money they can recover the losses over the years with their income or salary.

  2. Planning the finance for my new business.

    These holidays will increase the number or customers who are informed about my business therefore in April, June, July, August, September and November I expect my sales revenue to reach �6,400 per month as research shows that my business will attract 320 customers per month.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work