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Woolworths Asset Depreciation and Impairment

   

Added on  2020-05-16

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Running head: FINANCIAL ACCOUNTINGFinancial AccountingName of the Student:Name of the University:Author Note
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1FINANCIAL ACCOUNTINGTable of ContentsAnswer to Task 1: Analysis of Expenses........................................................................................2Answer to requirement (a)...........................................................................................................2Answer to requirement (b)...........................................................................................................2Answer to Task 2: Accounting policy.............................................................................................3Answer to Task 3: Notes to the 2016 financial statements..............................................................4References and Bibliography...........................................................................................................6
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2FINANCIAL ACCOUNTINGAnswer to Task 1: Analysis of ExpensesAnswer to requirement (a)The issue presented in the question is that the nature of expenses that have been incurredby the organization of Woolworths for the financial year of 2016 has been asked to clarify. Inorder to answer the presented questions, the financial report for 2016 has been chosen. In order to answer the presented question, at first, the concept of the categorization ofexpenses on the basis of nature or function should be understood. The categorization of expenseson the basis of nature can be described as the expenses that have been included in the incomestatement of the organization, that have essentially been disclosed according to their nature. Theparticular instance of the accounts that have been classified on the basis of nature are wages andsalaries and rent expenses etc (Kanapickienė & Grundienė, 2015). On the other hand, the expenses that have been classified on the basis of function are thecost of goods sold account, selling expenses and administrative expenses. It should be noted herethat the classification of the expenses on the basis of nature does not exclude the need fordisclosing the expenses on the basis of nature (Mignolet, 2017). Now, in the case of the chosen organization, Woolworths Group the expenses that havebeen disclosed in the financial statements have been classified on the basis of function. This isbecause the expenses that have been included in the income statement have been discloseddepending on the function that the particular expense serves like cost of sales, branch expenses,administration expenses, and financing costs. Moreover, the gross profit has been calculatedfrom the income statement of the Group signifying the fact that the expenses have been disclosedon the basis of their function. Answer to requirement (b)The possible reasons for the different methods of classification of expenses used, are asfollows:The expenses are classified on the basis of their nature when the number of expenses thathave been incurred by the firm are less.
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