Finance and Accounting- Assignment
Added on 2020-12-26
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Finance and Accounting
Table of ContentsINTRODUCTION...........................................................................................................................4BUSINESS REPORT......................................................................................................................4A. Financial Accounting and its purpose:..............................................................................4B. Internal and external stakeholder:......................................................................................5CLIENT 1........................................................................................................................................7CLIENT 2......................................................................................................................................20CLIENT 3......................................................................................................................................23CLIENT 4......................................................................................................................................25CLIENT 5......................................................................................................................................26CONCLUSION..............................................................................................................................28REFERENCES..............................................................................................................................29
INTRODUCTIONFinancial accounting refers to formation of final accounts of business organisation orentity for internal or external stakeholders like investors, shareholders etc. on periodical basis.Accounting includes a systematic summary and analysis of account and records of all inflow andoutflow of funds to and from business organization for a particular period. Financial accountingprocess starts with recording of financial or accounting transactions and ends with finalisation ofaccounts and reporting to various users of financial information (Ahn, Amiti and Weinstein,2011). It assists business organisation to define its goals and objectives and ensure correctdecisions and future course of action based on previous performance of business organisation.Relevance of financial accounting is more in case of large business organisations and limitedcompanies as compare to sole traders. Reporting is main feature of financial accounting whichhelps to describe actual financial position and performance of business organisation in front ofdifferent stakeholders. Mazars is small accounting firm based on UK is dealing in auditing, taxadvisory services. In addition, Mazars is a leading independent enterprise that is specialised inproviding tax advisory services. This report exhibits a complete definition of financialaccounting, purpose of financial accounting, internal or external stakeholders, purpose of controlaccounts and bank reconciliation statement, explanation about term Imprest and suspenseaccount and its main features.BUSINESS REPORTA. Financial Accounting and its purpose:Financial accounting is the process of accounting that includes summary, reporting offinancial transaction and analysing performance of business. Basically, it is an area of doingbusiness that focuses on internal and external users with useful information. In other words,creditors and investors are known as external users because they help to make decision out of theorganisation by using company's financial information. Financial transaction statessystematically classification to prepare final accounts such as trading account, profit and lossaccount or income statement, balance sheet, cash flow statement, change in equity statement andother relevant statements that are using by any organisation to analysis actual financialperformance and situation of company (Archer, Ahmed and Sundararajan, 2010). In financialaccounting accounts are prepared by enterprises as per accounting principles (UK GAAP),
guidelines, concept, convention and assumptions, that is administered and governed byinternational and local guidelines and standards. Most considerable purpose of financialaccounting are as follows-Financial accounting helps to create information or financial statements that may be usedby creditors and investors for making financial decisions.It helps to maintain double entry system (debit and credit) by using financial information.It helps to analysis the actual performance and position of business enterprises.It makes sure about compliance of statuary requirements, structure, rules and regulationsand policies.Financial information gives a comparative data and records that help to compare withprevious year data and perform effectively.It helps to classification organisation's assets and liabilities in order to manageprofitability and efficiency.Clear financial transaction and information helps to increase balances in organisation'saccounts.It also helps to measures the events in monetary terms by using s transaction effects.Its main purpose is taxation decision that is based on business assets or income, may bederive from financial accounting information.B. Internal and external stakeholder:Stakeholders are an independent person or group of people that has an interest in anorganisation. In other words, any person, organisation and society who owns shares in a businesssuch as an employee, customer, or citizen that are connected with business activity. Stakeholdersare classified as internal and external stakeholders (Needles and Powers, 2010). Organisationinvolves internal stakeholders such as individual or group of person whose having substantialinterest within the organisation, whereas external holders having direct or indirect interestoutside the business organisation.Internal Stakeholder: These are entities or corporate body within a business that includesmanagers, board of directors, investors, employees and managers. Following are the keystakeholders, as follows: Employees: Employees plays an important role at every place to formulate strategy andother essential operation work. A big size of organisation considers employee opinions and their
perception in formulating strategies. In an organisation employee means a person who hasspecific job that is defined by job description and they work collectively. Employees areinterested in financial information because their salary, bonus, incentive and other employmentbenefits are closely related with organisation's growth and performance. Employees are holdingstake in form of salary and career growth.Owners or shareholders: Owners are the main pillar of any organisation who havingmore substantial interest in form of shares held by them, voting rights, profits, dividend on sharesand making decisions. Owners are called real stakeholders of any entity because of holdingmajority of shares. Owners or Shareholders are holding stake in organisation in form ofdividends or share in profits. External stakeholders: These are entities or corporate body not within a business that includesconsumers, regulators, investors, government and suppliers. In other words, externalstakeholders are group of people outside a business who do not work within enterprises. Theseare the major external stakeholder:Government: Government get their share in an organisation's profit though taxes andduties. Government is the system or group of person that regulates or governs an organised orqualified community. It contains legislature, executive and judiciary that helps to make effectivedecision. Each government has a kind of formation and legislation that helps in business relatedpolicies and making financial statement such as taxation, VAT, truthful reporting, legalities,externalities and legislations. Government is interested in financial information of entity to(Dyreng and Lindsey, 2009).Customers: Customers are essential external stakeholders in large size of businessorganisation, that affects demands, supply and marketing strategies of business. It has an interestin any organisation in the form of quality of product and services, price sensitiveness, brandpopularity, and availability of products. The main aim of any enterprises is to fulfils the need andwants of their customers and provide maximum customer satisfaction.Regulators: A regulator is an organisation or person that is appointed by government toregulate and formulate an area of business activity like as manufacturing industry and banking. Italso involves a body that is used to control things such work speed of an organisation, productionactivity and controlling the working rate of machinery in any business enterprises. Regulators are
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