Unit 5 Accounting Principles, Accounting in Context and Budgetary Control

Unit 5 Accounting
Principles, Accounting
in Context and
Budgetary Control

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
P1 Examine the purpose of the accounting function within an organisation..............................1
P2 Assess the accounting function within the organisation in the context of regulatory and
ethical constraints........................................................................................................................2
M1 Evaluate the context and purpose of the accounting function in meeting organisational,
stakeholder and societal needs and expectations.........................................................................3
D1 Critically evaluate the role of accounting in informing decision making to meet
organisational, stakeholder and societal needs within complex operating environments...........4
P6 Prepare a cash budget from given data for an organisation using a spreadsheet...................5
P7 Discuss the benefits and limitations of budgets and budgetary planning, and control for an
organisation..................................................................................................................................6
M4 Identify corrective actions to problems revealed by budgetary planning and control for
effective organisational decision making....................................................................................8
D3 Justify budgetary control solutions and their impact on organisational decision making to
ensure efficient and effective deployment of resources..............................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Accounting planning is one of the most important factors from many others as it can help in
planning for the future which is highly uncertain and dynamic and thus it is very crucial as well
as critical to plan in an impactful manner so that it can add value to the company in the long run
(Al-Dmour, Zaidan and Al Natour, 2021). The below report contains explanation of many
aspects like the functions of accounting, its ethical constraints, cash budget and various
advantages and related aspects of the company named as OLC Restaurant which is operating in
the market on a big scale and thus has captured a larger share in the market.
MAIN BODY
P1 Examine the purpose of the accounting function within an organisation
The costing structure is determined by the company. In just about any event, the global
financial detailed principles have established a standardised sequence. The expenses incurred by
a company are determined by the operations they participate in. As a result, OLC Restaurant
Inc.'s spending structure is based on the activities. OLC Restaurant recognizes the following
price categories: immediate expenditures of transactions, item advancement, marketing,
miscellaneous, and management. The price of agreements includes all of the transactions that
occur during the development process. It's also not hard to keep track of the costs of
manufacturing components. OLC Restaurant divides such expenditures into two categories:
goods and administrative charges (Annen, 2017). Raw product, workmanship, and related
operational costs expenses are all included in price of the product. OLC Restaurant keeps track
of its expenditures in the following way: The total price of agreements, divided into 2 categories,
is 1996 million dollars, with the governments sector accounting for 1786 million dollars. In the
present timespan, the creative things component has been using 1217 million dollars. In 2018,
the marketing, administrative, and executive sector will generate a total of 1245 million dollars.
The break-even analysis point refers to the point at which the company neither loses money nor
makes profits. As a result, the firm's overall revenue is equal to its total expenditure. The
contribution margin threshold for OLC Restaurant Inc. is difficult to determine because the
financial statement doesn't really reflect the specifics for constant expenditures. Planning is an
important part of every company's operations. It assists organisations in successfully planning
and utilising existing assets. As a result, functional/departmental spending must be factored into

the budgetary process. OLC Restaurant Limited has a set spending for its operations. The
financial inflow report depicts the progression of income throughout the business. Furthermore,
projections have an impact on judgment call procedures. The appropriations include sections
inside the firm's many segments. Capital projection is a technique which ensures that a
corporation's activities are supported by adequate finances. Projection also aids managers in
understanding the streams of funding. They might generate money from either internally or
externally. This comprises income from activities as well as borrowing from outside parties.
OLC Restaurant has enough cash on hand, but it must plan correctly in the event of revenue and
spending changes. Furthermore, the fiscal position aids in the analysis of the firm’s monetary
efficiency assuming it remains to operate efficiently and effectively.
P2 Assess the accounting function within the organisation in the context of regulatory and ethical
constraints
Accountancy plays a vital function in business, economy, and culture. The competence and
reliability of the operations are critical for the advantage of the businessmen along with all
stakeholders (Commerford, Hatfield and Houston, 2018). As a consequence, accountancy
guidelines have indeed been formed, like the Widely Recognized Accountancy Procedures that
differ by region, and the Global Monetary Disclosure Rules that are adopted among most
nations. Such criteria and guidelines are intended to assure corporate accounting uniformity and
simplicity of comparability across companies. Despite current norms, there were also accounting
scandals that already have tarnished the reputation of corporations and the accounting profession
as a whole. To adapt to an emerging market, sustainable rules must be developed, and they are
only sustainable provided they have been accompanied by personal morality. An ethical is an
important component in developing appropriate standards and regulations high-quality and
consistent help. While completing accounting duties, ethical difficulties are commonly
occurring. Clients exert pressure on accountants to provide financial statements which are in
conflict with the firm's true financial condition in intended to mislead their major stakeholders.
The accountants are currently faced with the decision of choosing to gratify the client or to
promote the greater good. Groups, such as the Cpas Definition of Professionals Responsibility,
establish ethical norms for accountants in order to guide them in using their better judgement.
The duties framework, national good, legitimacy, impartiality and liberty, and reasonable
attention regulation are indeed the basic principles of the charter. Due to the complexity of their