Accounting Principles Report 2022

PEARSON-BTEC: SEMESTER 02 ‘ACCOUNTING PRINCIPLES’ –CROMWEL UK, AJMAN
Unit 5: Accounting Principles
Student Name/ ID
Number
Unit Number and
Title
Unit 5: Accounting Principles
Academic Year Sep. 2021-22
Unit Tutor Ms. Ragila Kana
Assignment Title Accounting in Context and Budgetary Control
Issue Date
25th March 2022
Submission Date 18th May 2022
Submission Format
The submission is in the form of an individual report compiled from the evidence produced for two
assignments that include the following.
This should be written in a concise, formal business style using 1.15 pt. spacing and font size 10.
You are required to make use of headings, paragraphs and subsections as appropriate, and all work
must be supported with research and referenced using the Harvard referencing system. Please also
provide a bibliography using the Harvard referencing system. The recommended word limit is
2,000 to 2,500 words, although you will not be penalized for exceeding the total word limit.
You will also submit a memorandum with an accompanying Excel spreadsheet (raw data will be
provided). You will insert sections of your spreadsheet into the memorandum. The recommended
word limit for the memorandum is 1,000–1,500 words, although you will not be penalized for
going under or exceeding the total word limit.
Referencing for both submissions should use the Harvard system (or an alternative system).

PEARSON-BTEC: SEMESTER 02 ‘ACCOUNTING PRINCIPLES’ –CROMWEL UK, AJMAN
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 organization and to
appropriate stakeholders
● Creation and interpretation of information, showing how that information can be used most
effectively to add value to an organization.
Vocational scenario
Organization:
A large accountancy firm that undertakes extensive business consultancy work for their client
base. They have a central London head office and regional offices in the UK in Birmingham and
Southampton. Last year, the group turnover was £200 m with 25 per cent deriving from non-UK
markets, principally in Southeast Asia. They have a small regional office in UAE. The firm also
has a policy of taking on smaller niche clients, where they feel there is potential for fast growth.
Role
You have recently joined the firm as a Graduate Trainee attached to their UK SME (Small and
Medium Enterprises) Unit, offering accountancy and financial services to businesses that
typically have a turnover ranging from £0.5 m to £15 m. As part of your ongoing training, you
have been asked to undertake some activities.

PEARSON-BTEC: SEMESTER 02 ‘ACCOUNTING PRINCIPLES’ –CROMWEL UK, AJMAN
Assignment activity and guidance
Your supervisor as a part of your training asked you to prepare a report about the ‘role of
accounting in an organization’ to check your knowledge in the finance field. It should cover the
relevant academic theory, appropriate headings and paragraphs.
Your report should include the following, but not limited to:
● the purpose and scope of accounting in complex operating environments
● a critical evaluation of the accounting function in informing decision making and meeting
stakeholder and societal needs and expectations
● the main branches of accounting and job skillsets and competencies
● accounting systems and the role of technology in modern-day accounting
● issues of ethics, regulation and compliance and the extent to which they are constraints or
threats to the organization.
Having completed the first activity, you have now been asked to work with a textile startup business
that your firm has just taken on as a client. The business is particularly in need of support and
guidance with budgeting and how it can be used to inform efficient resource allocation and support
effective control and decision making. The founder of the business is investing 100,000 Dhs. of
their own capital and has also secured a business loan of 50,000 Dhs.
(Note: students are provided with a raw budget data in spreadsheet format, which they will then
manipulate and model.)
You have been asked to prepare a memorandum that includes the following.
● Production of a 12-month cash budget that makes use of variance analysis to show the
impact of the different individual scenarios below:
1. discounting prices by 20 per cent, which in turn increases sales volume per month by
10 per cent
2. increasing the marketing budget by 10 per cent per month, which in turn
generates an additional 20 per cent in sales revenue
3. offering suppliers one-month’s trade credit
4. reducing rental/property related costs by 15 per cent per month.
● An evaluation of the role that budgets play in the effective planning and control of resources
in an organization such as your client’s. This will include both benefits and any limitations of
using budgets and the extent to which they can help identify problems and corrective actions.
● An outline of a range of budgetary control solutions, with justification, to support
organization decision making and ensure efficient and effective deployment of
resources.

PEARSON-BTEC: SEMESTER 02 ‘ACCOUNTING PRINCIPLES’ –CROMWEL UK, AJMAN
Submission Format
The submission is in the form of a detailed report. It should be clear worded, well-structured
and should make use of appropriate business language and terminology. The report can also
include clearly-labelled tables and charts. It will accompany and support the appropriately
constructed financial statements (income statement and statement of financial position) for
the business.
The word count is 2,000–2,500 words, although you will not be penalized for going under or
exceeding the total word limit. A bibliography should be provided using the Harvard
referencing system. Inaccurate use of referencing may lead to issues of plagiarism if not
applied correctly.
Unit Learning Outcomes
LO2 Prepare basic financial statements for unincorporated and small business
organizations 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 organization and to
appropriate stakeholders
● Creation and interpretation of information and showing how that information can be used
most effectively to add value to the organization
● 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
Having successfully completed your six-month probation as a Graduate Trainee at the
accountancy firm, you have now been attached to a unit in the firm that deals with the
provision of accountancy and consultancy services to small businesses that are typically set up
as sole traders, not for profit and partnerships.
The firm is careful about which small and emerging businesses it works with as it seeks to spot

PEARSON-BTEC: SEMESTER 02 ‘ACCOUNTING PRINCIPLES’ –CROMWEL UK, AJMAN
growth potential and identify and work with clients that have scalable business models.
Assignment Brief and Guidance
You are initially working with a selection of small businesses that have been trading for three
years and which now need annual trading statements to be compiled and submitted in line
with government requirements. You have been given:
 an extended trial balance for each business, including accruals, prepayments and figures
for bad debts and depreciation
 a range of comparative key performance ratios from the previous year.
The businesses do not make use of contemporary software to support book-keeping and local
accounting function. This is something which concerns you as you feel that it represents an
opportunity for the business to save time and resource.
Your supervisor, one of the firm’s Key Account Managers, has asked you to compile the year-
end financial statements ready for submission and provide, for each client, some detailed
analysis of the figures produced, which will be presented in the form of an accompanying
report. Specifically, you will undertake the following:
1. From the data provided, you are required to prepare the year-end financial
statements, taking into consideration accounting principles, conventions and
standards. You will need to make and show appropriate adjustments to both the
income statement and the balance sheet.
2. Write an accompanying business report to the client that will be sent with the
completed financial statements. The business report needs to include:
● calculation of relevant profitably, liquidity, asset usage and investment ratios
● critical evaluation of the performance to the business year on year (making reference to
data you have calculated and data provided from the previous year), with reference to
relevant benchmarks as well as any limitations of using financial ratios as performance
measures
● an outline of the benefits of contemporary accounting software packages, with examples
of products on the market
● justified conclusions and recommendations for your client.

PEARSON-BTEC: SEMESTER 02 ‘ACCOUNTING PRINCIPLES’ –CROMWEL UK, AJMAN