Finance for Managers Assignment Solved
Added on 2020-10-04
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Finance for Managers
INTRODUCTIONFinance is the most important part of any business organisation as it is a core requirementof business. It is important for managers to manage the finance available for business. Managingfinance is an essential aspect as managing finance includes recording, summarizing of businesstransactions. This report contains the detailed information about the requirements of keepingfinancial records it also analyses various techniques which are used while recording financialinformation. This report also explains the usefulness of financial statements to various interestedparties, it explains the difference between financial and management accounting and it alsocovers the process of budgetary control. This report also states the evaluation of the uses ofvarious methods of costing used for pricing purposes. This report also contains the calculation ofvariance from budget and actual profit and the various investment appraisal methods. TASK 11.1 Requirements and Purpose for financial records keepingFinancial Records:They are the formal documents which represents the transactionsrelated to business, individual or any other organisation (Baker and Wurgler, 2013). The recordswhich are maintained by most business organisation includes the statement of cash flow andretained earning, revenue statement and tax returns. For a successful business it is essential for abusiness to keep their financial records in an organised manner. Following are the variouspurpose:Monitor Business Progress: the main purpose of financial records keeping is to monitorthe progress of its business, it shows a growth of business. These records helps managersto see that whether their business is growing or not, which items are selling aggressivelyin the market. Good records supply a picture which clearly indicates the performance ofits business.Prepare Financial Statements: keeping good financial records can help company toprepare good and accurate financial statements which states the financial health of thecompany. These financial positions includes the income statements and statements offinancial positions also known as balance sheet (Bull, 2013). It is essential for anybusiness to store their records of financial transactions which can help companies tomanage their bank or creditors.1
Identification of Source of Income: It is essential for business to store its financialrecords as one business can generate its revenue from various different sources (Cheng,Hong and Shue, 2016). These financial records can help companies to keep a track on itsvarious source through which it can generate the revenue. This information is also neededto separate business transactions form non business transactions and also to determine thetaxable and non taxable income.Keeping Track of Deductible Expenses: The second main purpose of storing therecords of financial transaction is to keep a track on it expenses for filling tax return toclaim the deduction. It is important for a business to record their expenses at time when itoccurs so that it dos not forget the expenses at the time while preparing tax return for itsbusiness.Preparation of Tax Return: Financial records are important for companies whilepreparing their tax return. As these financial records shows the various sources which areused by companies to generate its revenue and all the expenses which a company hasincurred in generating revenue. Above mentioned are the purpose for which it is essential for companies to store itsfinancial records. As per the Maltese law and regulations following are the requirements forkeeping its financial records:As per companies Act of Malta law under chapter 386 it is important for companies tokeep its record of accounting in respect to the following:a)All sums of money which is expended or receive by the company and a matter in arespect which companies expenditure and receipts takes place.b)The liabilities and assets of the companyc)if a company deals in the dealing of goods:i.Statements which states the stock held by a company at end of every accountingperiod.ii.All the statements which states the stock taking from any such statements of stockwhich has to be prepared or has been prepared by the company.1.2 Analysis of financial information recording techniquesIn order to record the financial transaction there are various techniques available some ofthe techniques of recording financial information are as follows:2
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