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AP Authorised Assignment Brief Unit 5 Accounting Principles Assignment

CourseHND Business
Unit Number and TitleUnit 5: Accounting Principles
Academic TermJanuary – April 2023
Module LeaderCobola
Unit Tutor(s)Mazhar, Owusu, Waheed, Cobola, Mudassar
Issue DateWC 09/01/2023
Formative Feedback DatesWC 27/02/2023
Submission Date17/03/2023
Submission FormatsWritten Essay and Report
Assignment TitleAccounting in Context and Budgetary Control

Submission Format- Part 1

The Part 1 submission is in the form of a report. This should be written in a concise, formal business style using 1.5 lines Spacing, Times New Roman Font and 12 Font size.  You are required to make use of headings, paragraphs and subsections as appropriate.

  • All citations must be supported and referenced using the Harvard referencing system.  
  • The recommended word limit is 2,000–2,500 words, although you will not be penalized for exceeding the total word limit.
  • Please ensure that the similarity does not exceed 20% threshold as assignments with higher similarity may get blocked.

Please provide Nelson College’s Cover page with your submission and follow the required report structure (cover page, executive summary, table of contents, the specific requirements of the assignment brief and References).

Unit Learning outcomes

LO1 Examine the context and purpose of accounting.

LO4 Prepare budgets for planning, control and decision making using spreadsheets.

Transferable skills and competencies developed

  • Reasoning and analytical skills
  • Written communication using a range of media
  • Manipulation and interpretation of data using spreadsheets
  • Effective communication of relevant information across the organisation and to appropriate stakeholders
  • Creation and interpretation of information, showing how that information can be used most effectively to add value to an organisation.

Scenario:

Any business worth its salt must be a good steward of its resources and put these to efficient and effective use in order to ensure business continuity.

Accounting, is a form of stewardship and may be defined as “ the process of measuring, processing, and sharing financial and other information about businesses and corporations Why is accounting important for business and what difference does it make if a business has or does not have good accounting systems?

LO1 Examine the context and purpose of accounting.

Assignment activity and guidance

You are required to write blog posts which

  1. Examines the purpose of the accounting function within business organisations (1) using appropriate examples from real life businesses and
  2. Assesses how ethics and regulation impact the role of the accounting function in an organisation and the extent to which these factors are beneficial for a business organisation (2)
  3. Evaluates the context and purpose of the accounting function in meeting organisational, stakeholder and societal needs and expectations and critically evaluate the role of the accounting function in informing decision-making and meeting organisational, stakeholder and societal needs and expectations. 

The blog posts should be interesting and can include pictures and information that demonstrates the impact a good accounting system will have on any business

LO4 Prepare budgets for planning, control and decision making using  spreadsheets.

Assignment activity and guidance

You are a trainee accountant in Zwaner Ltd. 

The expected inflow and outflow of cash for the company over a 12-month period is given below. The figures shown are in pounds sterling (£)

Month           Sales    Purchases Wages Exp.
January  80,000          45,000   20,000         5,000
February         80,000          40,000   18,000            6,000
March          75,000          42,000   22,000           6,000
April          90,000          50,000   24,000            6,000
May          85,000          45,000  20,000            6,000
June          80,000          35,000  18,000            5,000
July          80,000          37,000  20,000            5,000
August          75,000          43,000   18,000            5,000
September          90,000          45,000   22,000            7,500
October          95,000          44,000   24,000            7,500
November          92,000          44,000   20,000            7,500
December        105,000          47,000   18,000            7,500

You are further informed that:                                                                                                                                                                              

  1. 20% of sales are for cash and the rest is on credit
  2. The average credit sale collection period for the company is one month after sale.
  3. Bulk purchases are done in cash each month.           
  4. Cash and bank balance on 1 January 2022 was £10,000.
  5. All excess cash balances at month end will be placed in a high interest savings account. The company should however maintain a balance of £25,000 each month end.
  6. The management is proposing a sales price discount that should increase cash sales by 10% in the 3rd and 4th quarters
  7. A marketing budget of £8000 per month will be introduced from beginning of the 3rd quarter as a result

You are required:

  • From the information given above, to prepare the quarterly cash budgets for Zwaner Ltd for the year Jan-Dec 2022(P6) that will show expected cash inflow over the year for each quarter
  • To prepare a report addressed to your line manager
  • In your report to assess the role that budgets can play in the effective planning and control of resources in the organisation. Highlight and explain both the benefits and any limitations of using budgets (P7) and the extent to which budgeting can help identify problems and corrective actions for any company.

You may also:

Justify budgetary policy by outlining a range of budgetary control solutions, with examples, to support organisation decision making and ensure efficient and effective use of resources.

Weblinks:

Accounting Coach courses.

Available at: https://www.accountingcoach.com/accountingbasics/explanation

The Association of Chartered Certified Accountants ACCA).

Available at: https://www.accaglobal.com/gb/en.html

Chartered Institute of Management Accountants.

Available at: https://www.cimaglobal. com/

HubSpot. How to write a memo: Templates & examples.

Available at: https://blog.hubspot.com/marketing/how-write-memo

HN Global

HN Global (2021) Reading Lists. Available at: https://hnglobal.highernationals.com/learningzone/reading-lists

HN Global (2021) Student Resource Library. Available at: https://hnglobal.highernationals.com/subjects/resource-libraries

HN Global (2021) Textbooks. Available at: https://hnglobal.highernationals.com/textbooks

Textbooks:

Atrill, P. and McLaney, E. (2018) Accounting and Finance for Non-Specialists. 11th Ed. Harlow:Pearson

Weetman, P. (2019). Financial and Management Accounting: An Introduction. Harlow: Pearso

Assignment TitleProduction and Interpretation of Financial Statements

Submission Format – Part 2

The Part 2 submission is in the form of a memorandum to a client, which will include prepared financial statements. The memorandum must be clear worded, well-structured and should be written in a concise, formal business styleAll citations must be supported and referenced using the Harvard referencing system. Provide a bibliography using the Harvard referencing system. Inaccurate use of referencing may lead to issues of plagiarism if not applied correctly.  The recommended word limit is 1,000–1,500 words, although you will not be penalized for exceeding the total word limit.

 Unit Learning outcomes  
LO2 Prepare basic financial statements for unincorporated and small business organisations in accordance with accounting principles, conventions and standards.  
LO3 Interpret financial statements.

Transferable skills and competencies developed

  • Managing financial data
  • Written communication using a range of media
  • Manipulating and interpreting data using spreadsheets
  • Effective communication of relevant information across the organisation and to appropriate stakeholders
  • Creation and interpretation of information and showing how that information can be used most effectively to add value to the organisation
  • Ability to use quantitative skills to manipulate data, evaluate, estimate and model business problems
  • Application of accounting knowledge to consistently deliver high-quality, accurate data and information in a timely fashion.
Vocational scenario
Zwaner Ltd has been in operation for five years and must submit their annual corporation returns to HMRC every year.  The company risks a fine if these submissions are not done in a timely manner.  You are account trainee in Zwaner Ltd and you have been asked to prepare the draft accounts for review by your line manager  
Assignment activity and guidance: Preparation of financial statements

You are given

  1. A trial balance for the business for 2022, 
  2. Notes for any adjustments to be made to the accounts for 2022

Requirement: Using the data given below, you are asked to prepare the year-end financial statements (P3) for the client for the year ended 31 December 2022, in accordance with accounting principles, conventions and standards.

Trial Balance for Zwaner Ltd
as at 31 December 2022
  £ £
Motor vehicle40,000
Computers30,000        
Cash & Bank10,750        
Accounts receivable9,500
Inventory4,000          
Accounts payable 10,500
Capital & Reserves 60,000
Cost of sales9,500          
Sales  45,000
Rent2,200 
Utilities1,500 
Insurance6,500          
Office stationery1,550          
 115,500115,500

Notes: The following adjustments must be taken into account at the end of the financial year.

  1. A client owing £1500 is bankrupt and that debt will not be recovered
  2. The gas bill for December 2022 of £850 was paid on 20 January 2023.
  3. The company depreciates its equipment at 10% per annum and its motor vehicles at 20% per annum.  This must be charged for each year on cost. The vehicle and computers were purchased on 1 January 2022.

 The company overpaid its insurance company in 2022.  The insurance charge for the year should be £4000.  The overpayment is to be treated as a prepayment towards next year’s bill.

Assignment activity and guidance: Interpretation of financial statements

The key performance indicators for travel agency XYZ Ltd over the past six years, is shown below.  The return on investment ratios for the same period is also given.

Key  Performance Indicators201620172018201920202021
£m£m£m£m£m£m
Revenue         4,527        4,258        3,854        3,452        2,973         3,450
net profit            450398           255           225           121            175
Working capital (current assets- current liabilities)            870           780           851           861           880            805
Current assets         1,800        1,925        1,875        1,775        1,500         1,675
Current liabilities            930        1,145        1,024           914           620            870
Inventory            300           300           350           350           500            350
Return on investment           10.1            9.8            8.5            8.3            3.0             4.9
Liquidity           1.94          1.68          1.83          1.94          2.42           1.93
WCTR520%546%453%401%338%429%
npr10%9%7%7%4%5%

Requirement:

From the information given, you are to calculate key performance ratios for each year 2016 to 2021 for profitability, liquidity and working capital turnover and submit these to your line manager.

  1. You are required towrite a memorandum detailing the financial ratios you have calculated.  (P4) and
  2. Comment on the performance of the company over the past six years making references to the ratios you have calculated(P5) including the given investment ratios.

You are also to critically evaluate the performance of the business with reference to the relevant benchmarks as well as any limitations of using financial ratios as performance measures in order to make justified conclusions and recommendations to the client.

Recommended resources please note this is not a definitive list of resources but it will help you to start your research by acting as a starting point of reference.

Weblinks:

The balance careers. Business letter format with examples. Available at:

https://www.thebalancecareers.com/how-to-format-a-business-letter-2062540

Xerox. Writing an effective business letter. Available at: https://www.xerox.com/en-us/smallbusiness/tips/business-letter

HN Global

HN Global (2021) Reading Lists. Available at: https://hnglobal.highernationals.com/learningzone/reading-lists

HN Global (2021) Student Resource Library. Available at: https://hnglobal.highernationals.com/subjects/resource-libraries

HN Global (2021) Textbooks. Available at: https://hnglobal.highernationals.com/textbooks

700820 Accounting, Organizations and Control Assignment