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

3.5 Final Accounts Questions

Extracts from this document...

Introduction

3.5 Final Accounts (Leading Questions) 1. What are the main purposes of Final Accounts from a business ?point of view? First and foremost, one of the main purposes of Final Accounts from a business point of view is that final accounts act as a form of appraisal on the financial position of a business. Final Accounts allow business owners to see where their money is spent and how well their investments are working. In short, Final accounts provide business with information for better financial planning and control. Additionally, final accounts also make businesses accountable to all the monies within it. This force a business makes sure all the payments and receipts in the business is accounted. 2. Name some stakeholders of Final accounts and why they should care? There are numerous stakeholders of final accounts and some of these includes employees, managers, and financiers (bankers). To begin with, employees care about the final accounts of a business because it tells them their job security and is there likelihood for wages rising or dropping. ...read more.

Middle

An example would be wear and tear eventually leading to the replacement of certain assets in a business. The eventual replacement of assets does not mean cash is saved for the replacement but just means that the depreciation is recorded as a non cash in the profit floss account. 5. Comment on methods of depreciation and provide an example where each is most appropriately used One of the methods of depreciation is the ?straight tine method". The straight line method is a common and very simple method to evaluate depreciation. The method is essentially the purchase cost of the asset minus the scrap cost of the asset divided by the expected lifespan of product. A problem with this method of depreciation is that the depreciation calculated through this method is the same every year which does not fully apply to all assets. An asset where this example can be used could be electronic goods like a TV or phone where depreciation is more constant than something like a motor vehicle. ...read more.

Conclusion

8. Window Dressing- List three ways this type of ?legal manipulation" can flatter the final accounts. There are many different ways of window dressing in the business world that makes the final accounts appear better for stakeholders. One of the method would be to record the sales revenue of products paid in credit The effects of this is that the profit number in the profit loss account would be higher. On top of that, bills and loans could be paid off after final accounts are duo. This would allow for tho business to from tax concessions. Lastly, the business can use LIFO or FIFO stock valuation to manipulate tho gross profit levels. 9. What are the main limitation of final accounts. The main limitations of final accounts were discussed earlier in question #3. The limitation is that final accounts only covers the quantitative aspect of a business. There are many other factors that affect the performance of a business these include the qualitative aspects like its image and reputation and its organizational objectives. On top of that, final accounts also leaves out human resources and the people that make up a business are the most valuable assets a business has. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Business Studies 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 International Baccalaureate Business Studies essays

  1. This paper will concentrate on Apples Apple TV business, and its complementing iTunes business.

    Major Apple products are typically released during Mac World, Apple's largest trade show. Steve Jobs' (Apple CEO) keynote is one of the most watched annual corporate media event heavily covered by media and the blogger community. While that announcement itself is a huge Acquisition strategy, the email that shortly follows

  2. New business plan

    which responsible for the marketing and promotion program of the restaurant and the other is the supplier management team which ensure the quality of the raw material purchased. The HR manager will be in charge of the new staff recruitment and training.

  1. BP Financial analysis

    See Appendix A in Section 9, for further analysis. Industrialised societies are dependent on oil, and over the last 150 years billions of barrels produced and consumed, and billions of dollars in revenue generated. However, the oil industry deals in a finite resource which is also accused of causing environmental damage by releasing carbon dioxide.

  2. Finance and business questions and answers.

    the minimum amount of pounds they should receive on October 28th, 2011 given the ten month forward rate for one US dollar in terms of pounds? What are two other ways BMW might hedge their pound/dollar exposure? Ten month forward rate is 1 Pound = $1.754 Hedge using forward contract Amount receivable by BMW ($26,500*19,000 mini-cooper cars)

  1. Free essay

    Media Planning for BMW ActiveHybrid 7. The BMW ActiveHybrid 7 was introduced in 2010. ...

    Compared with the standard version of 760i, the car's fuel-consumption has improved significantly because of the application of the new hybrid power technology created by BMW. Based on the announcement of U.S. Environmental Protection Agency, the fuel-consumption is merely 26 miles/gallon (EPA, 2010).

  2. Provide a list of 5 ethical companies & how they become ethical?

    McDonalds McDonald's mission is to be the UK's best family restaurant and they believe that this involves protecting the environment at the local and global level. They strive to ensure that our operations today do not have a negative impact on the lives of future generations.

  1. Business plan for Laundry Toaster laundry dryer.

    4.4 Estimated Market Share and Sales a) Product/service Market Share and Sales Year 2012 2013 2014 Market share (%) 50% 60% 70% Total sales in units Total sales in RM 20 60000 30 90000 40 120000 4.5. Marketing Strategy a)

  2. Questions on Globalisation and International Trade

    In 1991, India?s government embarked on an ambitious economic reform program. Much of the industrial licensing system was dismantled, and several areas once closed to the private sector were opened. In addition, investment by foreign companies was welcomed, and plans to start privatizing state-owned businesses were announced.

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