Unit 5 Accounting Principles

Unit 5 Accounting
Principles

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Measure the main purpose of accounting for achieving the organisational, societal and
stakeholders’ requirements and anticipations in informing the decision making within a
difficult environment..............................................................................................................1
2. Measure the regulatory and ethical discipline of BAJ shop...............................................3
3. Measure the role of accounting in informing decision making to achieve firms, stakeholder
and societal requirement and anticipation within a difficult operating environment.............4
4. Calculation of financial statement of BAJ Shop................................................................6
4.1 Trading Account, Profit and Loss Account.....................................................................6
4.2 Calculate the Financial Ratio ..........................................................................................8
4.3 Compare the three year financial ratio of BAJ Shop.....................................................11
4.4 Cash Budget ..................................................................................................................12
4.5 Two advantages and disadvantage of Budgets, Budgetary planning and Budgetary control
of BAJ shop..........................................................................................................................13
5. Create the partnership trading accounting, profit & loss account and balance sheet.......14
6. Create the income statement and balance sheet of Creative Kids...................................16
CONCLUSION..............................................................................................................................17
REFERENCES .............................................................................................................................18

INTRODUCTION
In this report of accounting principles it mainly discuss about the purpose of accounting
for meeting the requirement of firm, society and stakeholders of the company along with the
expectations of them for disclosing the decision-making process of the complex environment.
After that it also analyse the role of supporting new IT technology which mainly helps to take an
accounting and business decisions, it also analyse the information to communicate decision
making. In another instance it explain the meaning of ethics and the right decision an accountant
of the company take on the basis of the case study(Al Mallak, Tan and Laswad, 2020). Apart
from this it measure the purpose of accounting which mainly inform the decision-making process
to achieve the firms, stakeholder and social necessities and expectations in a complex working
environment. At the end they create the financial statements with the help of trial balance and the
cash budget of the firm. Also it compute the financial ratios of the organization and describe the
two advantages and limitations of budgets, budgetary planning and controlling of BAJ shop as a
proprietor.
MAIN BODY
1. Measure the main purpose of accounting for achieving the organisational, societal and
stakeholders’ requirements and anticipations in informing the decision making within a
difficult environment.
The purpose of accounting is important to understand because it helps the firm for
fulfilling the firms, society and stakeholders necessities and expectations. It also very useful to
take business decisions. Before explaining the purpose of accounting its important to know the
concept of accounting; it play a very important role for running a firm because it assist to
identify the income and expenses of the company, it mainly check the company law and give
investors, system of management and government with quality of financial data which can be
useful for creating the business business related decisions(Andrew and Baker, 2020).
It includes some financial statement created by the documents.
 The profit and loss statement provide detail regarding the income, expenditure and profits
of the company.
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 The balance sheet of the firm provides a clear image on the financial condition of the
organization on a specific date.
 The cash flow statement is create a pool among the profit and loss statement, balance
sheet and report the cash created and paid on a particular time duration.
It is very difficult way to maintain the financial documents clear and updated if they have a
desire to maintain it company aimless.
Accounting is very crucial part in the projections of company. This is the task of recording,
summarizing and examining the information(Hoitash and Hoitash, 2018). It maintains and record
all income, expenditures and qualitative and quantitative information of the firm. There are some
function of accounting which are as discussed below:
1. Purpose of leading new information technologies to help accounting and decision making
Technology play a significant role for the accounting and business decision making. It
helps the firm to permitting the head of department to create good projected and strategic
decision making process.
 Collecting the data: The Information technology of the company is mainly useful to
perform the task of the organization and collecting the information which are basically
related to the business projected task. The technology of the business is very helpful to
identify the relevant information for the better and efficient running of the business.
 Identify the employee productivity: This function of technological business information
system is to determine the performance of the employee. In an organization technology
helps to track the productivity of employees and measuring the actual performance of
employee for setting standards(Jorge, Nogueira and Ribeiro, 2020).
2. Examining the data to inform Business decision making
Before making any decisions, its important for the firm to analyse the data appropriately
and then create decisions on the basis of analysing the information of business. Which helps the
firm to inform about the decisions. There are some ways to examine the data:
 Define the company objectives: Its important for the firm to define the goals of the
organization to their employees. Because it helps them to achieve the objectives of the
company. If company communicate the goals of the company to their workers then it
easy to accomplish them in a very effective and efficient manner.
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