• 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.

    However, when the new version came out, all existing Apple TV owners were given a free software update so their Apple TV's were now as good as the newer version. Apple has one of the best software update delivery mechanisms in the industry that enables them to push free updates to products with very little customer interaction.

  2. Difference in working culture of Malaysia & Singapore

    People at lower levels respect higher authorities. Respecting elders and seniors comes from Confucianism that still exists in the Chinese culture and Asian cultures. In such a hierarchical society or workplace, juniors do not openly question or argue with superiors.

  1. Free essay

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

    These will absolutely provide both the drivers and the passengers a comfortable travelling environment which is essential for a great amount of people who value these aspects a lot. Competitive Analysis * Competitor One > History of Mercedes-Benz Mercedes-Benz is a world famous automobile brand which is a division of its parent company Daimler AG.

  2. Project Management - planning an all inclusive carnival concert in the North Western end ...

    and NPV (Net Present Value). From the SWOT analysis for the event "Soca In D Sun" the strengths outweighed the weaknesses. The fact that the event will be held during the Carnival season is a benefit because during that time of year there is normally a flock of tourists in the country that are willing

  1. 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)

  2. BP Financial analysis

    with a good hurricane season meaning that production could continue through the year. BP's liquidity is similar to the industry average and to that of Royal Dutch Shell plc (Shell), but much lower than Exxon Mobil Corporation (Exxon). Its debt to equity ratio is considerable higher than its competitors.

  1. Business plan for Laundry Toaster laundry dryer.

    So that the timing of the production can be reduced and the production process will run smoothly. As a result, the inventory and work in progress is also reduced and increase our performance and quality of the product. Other than that, the holding cost will reduced and maintain our profit.

  2. Questions on Globalisation and International Trade

    be needed in the short term until the industry can become competitive. While it could be argued that another country could make the product more efficiently already, is it fair to limit a country?s ability to develop its industrial base?

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