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Accounting for Managers PDF

   

Added on  2020-03-16

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ACCOUNTING FORMANAGERS
Accounting for Managers PDF_1
Accounting Answer – 1a.There are various kinds of companies, which utilize distinct types of budgets within their operations in order to enhance the availability of their financial resources. Such budget may be either a fixed budget or a flexible budget. A flexible budget can be referred to as the budget wherein a company is capable of making in a budget based on the volume of its operations (Robinson & Last, 2009). For instance, if a manufacturer ascertains that the cost of his supplies and electricity is $20 per hour. Heis also well aware of the fact that the depreciation, supervision, and other fixed costs of the factory is $50000 per month. Moreover, the production inventories operate around 4000 and 7000 hours every month. Therefore, from this situation, it can be determined that the flexible budget of the manufacturer is $50000+$10 per month. The major goal of evaluation of performance is to offer an equitable measurement of the contribution of employees to the workforce, safeguard both the employees and employers and produce appropriate appraisal documents (Venanci, 2012).b.It can be noted that apart from the cash budget of a company, it is also under an obligation to prepare several other kinds of budgets. Furthermore, the budgets that arerequired to be prepared before the preparation of cash budget are as follows:Capital expenditure budgetExpenses related to such budget can only be recorded in the tenure in which these have incurred. Furthermore, if a capital asset is purchased by the company, then the same is required to be reflected on the payment side of the financial statement whereas if a capital asset is sold by the company, then the amount attained in relation to the same must be reflected on the receipts side (Robinson & Last, 2009).Expense budgetExpenses associated with such kind of budget are always recorded in the period in which the same are already paid. Furthermore, expenses that are outstanding in nature does not form part of such budget.Sales budget2
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Accounting When the company attains successful sales within its operations, the same are recorded in the cash budget or sales budget when the amount related to the same are adequately attained fromthe debtors or customers respectively (Robinson & Last, 2009).c.Operating cycle can be referred to as the average period of time that is necessary for abusiness enterprise to facilitate an initial cash outlay so that production of goods can be undertaken, the same goods can be successfully sold to the consumers, and cash in respect of the same is properly attained from those customers. Such operating cycle is very relevant for making an estimate of the amount of working capital that is required by a company to enhance or develop its operations in the market (Shim & Siegel, 2009).Cash cycle, on the other hand, can be defined as the computation of cash flow that plays a key role in measuring the time that is consumed by a company to transform allits investments into inventories, and other resource inputs into liquid cash. Furthermore, the reason why it is important to understand the elements of cash cycle and operating cycle can be attributed to the fact that it assists in evaluating all the requirements of a company and also plays a vital role in evaluating the working capital requirements as well. There are different kinds of ratios that can be used to evaluate the management effectiveness of working capital. Some of them are as follows:Inventory turnover ratioThis ratio is the ratio that plays a key role in reflecting how many times the company has replaced or sold its inventories within a period of time.Working capital ratioThe ratio of current assets divided by current liabilities is called the working capital ratio of a company.d.Accounting is a very significant practice for all types of enterprises including government enterprises. The reason behind this can be attributed to the fact that even 3
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