ACCT20074 Contemporary Accounting Theory Assignment
Added on 2020-04-01
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ACCT20074 Final AssignmentTerm 2, 2017Student ID:..................................... Student name..............................................................Marker’s overall comments:The markers may include any final comments here.
Overall Mark (Total) out of 50:0
Question 1: There are several possible objectives for general purpose financial reporting. Explain what these objectives might be, and which one you think best applies to Amazon’s financial reporting (based on the information in the case study). Make sure that you fully explain your answer.There are many different motivations for preparing financial statements or reports. The objective of preparing the financial reports depends on the specific needs of the person or group of persons who need the statements prepared. One of the objectives of preparing financial reports is to examine the financial performance of an organization during a given financial period by the existing shareholders. The shareholders may be interested in determining how the organization has been performing during a given period of time. They may need to get an update on the sales revenue generated, the expenses incurred by the organization and the liquidity level of the company (Rossman, 2017). To provide the shareholder what such information, general purpose financial statements need to be prepared.Another objective of general purpose financial reporting is that it helps lenders and other creditors in making decisions. The creditors are interested in the balance sheet of an organization. A lender can be able to determine the ability of the organization to meet their financial obligation when they fall due before advancing a loan or credit to an organization. The creditors need the general purpose financial statements to determine the amounts owed to other creditors and evaluate how the company is dealing with this
liabilities(Gabriel & Marcus, 2010). The cash flow of the business is also important for the creditor to determine the highest amount they can led out to a company.The general purpose reporting can be used by new aspiring investors to assess whether or not the shares of the company are viable for purchase. A new investor can use the financial reports to assess the performance of an organization and make future predictions on how they expect the company to perform. This helps them to make an informed decision. Potential new investors need enough information in order to be able to assess the cash flow of the business and understand important aspects of operation of the business. Using the general purpose report, an investor is able to understand the factors that may cause the shares and the value of the company to plummet in future. The new investor is also able to predict the underlying risks in the investment they are about to undertake. Through the general purpose financial reporting, a new investor is able to understand the intended future investment of the company. Inaddition to this, they are able to understand how efficient an organization is in its operations.The objective of general purpose financial reporting for the Amazon case is to communicate to the existing investors. The financial reports aims at communicating with the old investors of the company who are the owners of Amazon. The financial reports needs the existing investors to increase their investment in the company by buying more shares to help increase the capital base of the company(Bernstein, 2015).The reports is aimed at convincing the investors that the business is focused on future growth. The reports aims at convincing the investors that the business is currently doing well with the increase in sales for the company rising by 23%. the costs for the company are high due to the desire of the company to grow in other areas which are expected to rake in extra profits for
the company (Ahmed, 2008).The general purpose financial report by Amazon is therefore intended at persuading the investors on the need to invest further in the business since it has bigger future growth profits and the value of their investment can only increase going forward.References:Ahmed, N. (2008). Financial accounting: A simplified approach for B. Com.(Hons), C.A., I.C.W.A. and C.S (I). New Delhi: Atlantic.Bernstein, D. (2015). Is Amazon Becoming the New Cool Software Company for Developers?. IEEE Cloud Computing, 2(1), 69-71. http://dx.doi.org/10.1109/mcc.2015.10Gabriel, S. J., & Marcus, A. (2010). Financial accounting. New Delhi: Tata McGraw-Hill Education.Rossman, J. (2017). The Amazon Way: 14 Leadership Principles behind the World’s Most Disruptive Company. SDMIMD Journal Of
Management, 8(1), 95. http://dx.doi.org/10.18311/sdmimd/2017/15723Marker’s Comments: The marker will provide feedback here.Mark (10):0Exceeds Expectations(High Distinction) 85-100%Exceeds Expectations (Distinction) 75 - 84%Meets Expectations (Credit) 65 – 74%Meets Expectations (Pass) 50 – 64%Below Expectations (Fail) below 50%Demonstrates a balanced and very high level of detailed knowledge of core concepts by providing a very high level of analysis. Utilises current, appropriate and credible sources.Demonstrates a balanced and high level of knowledge of core concepts by providing a high level of analysis. Utilises mostly current, appropriate and credible sources.Demonstrates a good level of knowledge of some of the core conceptsby providing some level of analysis. Utilises somecurrent, appropriate and credible sources.Demonstrates limited knowledge of core concepts by providing a limited level of analysis. Utilises few current, appropriate and credible sources.Demonstrates little, if any, knowledge of the core concepts with extremely limited, if any, analysis. Utilises little, if any, current, appropriate and credible sources.
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