Internal Verification of Assessment Decisions - BTEC(RQF)

This document provides information about the internal verification process for assessment decisions in BTEC(RQF) qualifications. It includes a checklist, criteria, and feedback for assessors. The document also discusses the Pearson HND in Business program and Unit 5 - Accounting Principles. The assignment titled 'Accounting in Context and Budgetary Control' is mentioned as well.

Higher Nationals
Internal verification of assessment decisions – BTEC(RQF)
INTERNALVERIFICATION–ASSESSMENTDECISIONS
Programmetitle Pearson HND in Business
Assessor InternalVerifier
Unit(s) Unit 5 – Accounting Principles
Assignmenttitle Accounting in Context and Budgetary Control.
Student’sname
Listwhichassessmentcrit
eriatheAssessorhasawar
ded.
Pass Merit Distinction
INTERNALVERIFIERCHECKLIST
Dotheassessmentcriteriaawardedmatcht
hoseshownintheassignmentbrief? Y/N
Isthe Pass/Merit/Distinction
gradeawardedjustified bythe assessor’s
comments on the student work?
Y/N
Hastheworkbeenassessedaccur
ately? Y/N
Isthefeedbacktothestudent:
Givedetails:
• Constructive?
• Linkedtorelevantassessment
criteria?
• Identifyingopportunitiesf
or improvedperformance?
• Agreeingactions?
Y/
NY/
N
Y/
NY/
N
Doesthe
assessmentdecisionneedamending? Y/N
Assessorsignature Date
InternalVerifiersignature Date
Programme Leader
signature(ifrequired) Date

Confirm actioncompleted
Remedialactiontaken
Givedetails:
Assessorsignature Date
InternalVerifiersi
gnature Date
Programme
Leadersignature(ifrequi
red)
Date

Higher Nationals - SummativeAssignmentFeedbackForm
StudentName/ID
UnitTitle Unit 5 – Accounting Principles
AssignmentNumber Assignment 1 of 2 Assessor
SubmissionDate DateReceived1stsub
mission
Re-submissionDate DateReceived2ndsubmissio
n
AssessorFeedback:
LO1 Examine the context and purpose of accounting
Pass, Merit & Distinction
Descripts
P1 P2 M1 D1
LO2 Prepare basic financial statements for unincorporated and small business organisations in accordance
with accounting principles, conventions, and standards
Pass, Merit & Distinction
Descripts
P3 M2 D2
LO3 Interpret financial statements
Pass, Merit & Distinction
Descripts
P4 P5 M3 D2
LO4 Prepare budgets for planning, control and decision-making using spreadsheets.
Pass, Merit & Distinction
Descripts
P6 P7 M4 D3
Grade: AssessorSignature: Date:

ResubmissionFeedback:
Grade: AssessorSignature: Date:
InternalVerifier’sComments:
Signature&Date:
* Please note that grade decisions are provisional. They are only confirmed once internal and external moderation has taken place and grades decisions have
been agreed at the assessment board.
Assignment Feedback
Formative Feedback: Assessor to Student
Action Plan
Summative feedback
Feedback: Student to Assessor

Assessor signature Date
Student signature Date
Pearson
Higher Nationals in
Business
Unit 5: Accounting Principles
Assignment 01

General Guidelines
1. A Cover page or title page – You should always attach a title page to your assignment. Use previous
page as your cover sheet and make sure all the details are accurately filled.
2. Attach this brief as the first section of your assignment.
3. All the assignments should be prepared using a word processing software.
4. All the assignments should be printed on A4 sized papers. Use single side printing.
5. Allow 1” for top, bottom , right margins and 1.25” for the left margin of each page.
Word Processing Rules
1. The font size should be 12 point, and should be in the style of Time New Roman.
2. Use 1.5 line spacing. Left justify all paragraphs.
3. Ensure that all the headings are consistent in terms of the font size and font style.
4. Use footer function in the word processor to insert Your Name, Subject, Assignment No, and
Page Number on each page. This is useful if individual sheets become detached for any reason.
5. Use word processing application spell check and grammar check function to help editing your
assignment.
Important Points:
1. It is strictly prohibited to use textboxes to add texts in the assignments, except for the compulsory
information. eg: Figures, tables of comparison etc. Adding text boxes in the body except for the
before mentioned compulsory information will result in rejection of your work.
2. Avoid using page borders in your assignment body.
3. Carefully check the hand in date and the instructions given in the assignment. Late submissions will
not be accepted.
4. Ensure that you give yourself enough time to complete the assignment by the due date.
5. Excuses of any nature will not be accepted for failure to hand in the work on time.
6. You must take responsibility for managing your own time effectively.
7. If you are unable to hand in your assignment on time and have valid reasons such as illness, you may
apply (in writing) for an extension.
8. Failure to achieve at least PASS criteria will result in a REFERRAL grade .

9. Non-submission of work without valid reasons will lead to an automatic RE FERRAL. You will
then be asked to complete an alternative assignment.
10. If you use other people’s work or ideas in your assignment, reference them properly using
HARVARD referencing system to avoid plagiarism. You have to provide both in-text citation and a
reference list.
11. If you are proven to be guilty of plagiarism or any academic misconduct, your grade could be
reduced to A REFERRAL or at worst you could be expelled from the course

Student Declaration
I hereby, declare that I know what plagiarism entails, namely to use another’s work and to present it as my own
without attributing the sources in the correct way. I further understand what it means to copy another’s work.
1. I know that plagiarism is a punishable offence because it constitutes theft.
2. I understand the plagiarism and copying policy of the Edexcel UK.
3. I know what the consequences will be if I plagiaries or copy another’s work in any of the assignments for this
program.
4. I declare therefore that all work presented by me for every aspect of my program, will be my own, and where I
have made use of another’s work, I will attribute the source in the correct way.
5. I acknowledge that the attachment of this document signed or not, constitutes a binding agreement between
myself and Edexcel UK.
6. I understand that my assignment will not be considered as submitted if this document is not attached to the
attached.
Student’s Signature: Date: 18/12/2022
([e-mail]) (18/12/2022)

Higher National Certificate/Diploma in Business
Assignment Brief
Student Name /ID Number
Unit Number and Title Unit 5: Accounting Principles
Academic Year
Unit Tutor
Assignment Title Accounting in Context and Budgetary Control and Production and
Interpretation of Financial Statements
Issue Date
Submission Date
IV Name & Date
Submission format
The submission is in the form of a portfolio of evidence compiled from the evidence produced for two
assignments that include the following.
Section A
A blog that should make use of headings, sub-sections, columns and appropriate business-related images and
illustrations. This format offers the opportunity to present academic and theoretical information in a practical,
contextualised and creatively written way. The recommended word limit for the case study is 1,500–2,000 words,
although you will not be penalised for going under or exceeding the total word limit. All work must be supported
with research and referenced correctly using the Harvard referencing system (or alternative referencing system).
You will need to provide a bibliography using the Harvard referencing system (or an alternative referencing
system). Inaccurate use of referencing may lead to issues of plagiarism if not applied correctly.
Section B
You will also submit budget reports (Sales budget, Production budget & Cash budget) with
relevantinterpretations. 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 penalised for going under or
exceeding the total word limit. Referencing for both submissions should use the Harvard system (or an alternative
system).

The submission is in the form of a portfolio of evidence compiled from the evidence produced for two
assignments that include the following.
Section C
A constructed set of financial statements (income statement and statement of financial position) for the business
in question. The word count is 2,000–2,500 words, although you will not be penalised for going under or
exceeding the total word limit. A bibliography should be provided using the Harvard referencing system (or an
alternative system). Inaccurate use of referencing may lead to issues of plagiarism if not applied correctly.
Section D
A detailed letter to a named client. The letter must be clear worded, well-structured and should make use of
appropriate business language and terminology. The letter can also include clearly labelled tables and charts.
The word count is 2,000–2,500 words, although you will not be penalised for going under or exceeding the total
word limit. A bibliography should be provided using the Harvard referencing system (or an alternative system).
Inaccurate use of referencing may lead to issues of plagiarism if not applied correctly.
Unit Learning Outcomes:
LO1 Examine the context and purpose of accounting.
LO4 Prepare budgets for planning, control and decision-making using spreadsheets.
LO2 Prepare basic financial statements for unincorporated and small business organisations inaccordance with
accounting principles, conventions, and standards.
LO3 Interpret financial statements.
Learning Outcomes and Assessment Criteria
Pass Merit Distinction
LO1 Examine the context and purpose of accounting
P1 Examine the purpose of
the accounting function
within an organisation. M1 Evaluate the context and
purpose of the accounting
function in meeting
organisational, stakeholder
and societal needs and
expectations.
D1 Critically evaluate the role of
accounting in informing decision making
to meet organisational, stakeholder and
societal needs within complex operating
environments.
P2 Assess the accounting
function within the
organisation in the context of
regulatory and ethical
constraints.
LO4 Prepare budgets for planning, control and decision- D3 Justify budgetary control solutions

making using spreadsheets.
and their impact on organisational
decision making to ensure efficient and
effective deployment of resources.
P6 Prepare a cash budget
from given data for an
organisation using a
spreadsheet.
M4 Identify corrective actions
to problems revealed by
budgetary planning and
control for effective
organisational decision
making.
P7 Discuss the benefits and
limitations of budgets and
budgetary planning, and
control for an organisation.
Pass Merit Distinction
LO2 Prepare basic financial statements for unincorporated and
small business organisations in accordance with accounting
principles, conventions, and standards.
D2 Critically evaluate financial
statements to assess organisational
performance using a range of measures
and benchmarks to make justified
conclusions.
P3 Prepare financial
statements from a given trial
balance for sole traders,
partnerships and not-for-
profit organisations, to meet
accounting principles,
conventions and standards.
M2 Produce financial
statements from a given trial
balance, making appropriate
adjustments.
LO3 Interpret financial statements.
P4 Calculate and present
financial ratios from a set of
final accounts.
M3 Evaluate the performance
of an organisation over time,
using financial ratios with
reference to relevant
benchmarks.
P5 Compare the performance
of an organisation over time
using financial ratios.

Assignment Brief and Guidance:
Section A
Your supervisor, one of the firm’s Key Account Managers, has asked you to prepare a blog that
will be used to market and promote its accounting services to new and existing clients. The
working title you have been given for the blog is ‘The role of accounting in an organisation’. The
blog must be presented as an online blog in an engaging and practical way, covering relevant
academic theory, making use of, for example, headings, images and illustrations. Your blog
should include the following, but is 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 organisation.
Section B
Tools Ltd is a new business which has been formed to buy standard machine tool units and adapt
them to the specific needs of customers.
The business will acquire fixed assets costing Rs.100,000 and a stock of 500 standard tool units on
the first day of business. The fixed assets are expected to have a five-year life with no residual
value at the end of that time.
Sales are forecast as follows:

The selling price of each unit will be Rs.90.
The cost of production of each unit is specified as follows:
Rs.
Cost of standard unit purchased 24
Direct labour 30
Fixed overhead 10
64
The fixed overhead per unit includes an allocation of depreciation. The annual depreciation is
calculated on a straight-line basis and is allocated on the basis of a cost per unit to be produced
during the year.
Suppliers of standard tool units will allow one month’s credit. Customers are expected to take two
months’ credit.
Wages will be paid as they are incurred in production. Fixed overhead costs will be paid as they
are incurred.
The stock of finished goods at the end of each quarter will be sufficient to satisfy 10% of the
planned sales of the following quarter. The stock of standard tool units will be held constant at 500
units.
It may be assumed that the year is divided into quarters of equal length and that sales, production
and purchases are spread evenly throughout any quarter.
Required
1. Produce, for each quarter of the first year of trading:
(a) the sales budget.
(b) the production budget; and
(c) the cash budget.
2. Explain the benefits and limitations of budgets, budgetary planning, and budgetary
control for Tools Ltd.
3. Compare any other organization which operates with the similar business activities and
explain how organizations are adapting budgetary planning and budgetary control to
respond to financial problem.Further,Justify budgetary control solutions and their impact
on organizationaldecisionmaking to ensure efficient and effective deployment of
resources.
Year 1 Year 2
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1
Modified tool
units 4,050 4,200 4,350 3,900 4,050

Section C
a. Prepare final accounts for sloe traders, partnerships and limited companies in according with
appropriate principles, conventions and standards. (Please refer the excel sheet forrequired
information).
b. Prepare Cash flow statement of Ruba PLC. Find the cash balance for the year ended by using
relevant accounting formats. (Please refer the excel sheet for required information).
c. Compare the essential features of each financial statement (Complete set of Financial
Statements) to analyse the differences between them in terms of purpose, structure, content
Etc.
Section D
These local businesses do not make use of contemporary software to support its book-keeping and
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 your client. You should prepare some detailed analysis of the figures
produced, which will be presented in the form of a letter.
a. Calculate and interpret following ratios from the given information in the excel sheet.
 Investor ratios
 Liquidity ratios
 Leverage ratios
 Profitability ratios
b. critically evaluate 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 with
a justified conclusions and recommendations for your client.
the

Grading Rubric
Grading Criteria Achieved Feedback
P1 Examine the purpose of the accounting
function within an organisation.
P2 Assess the accounting function within
the organisation in the context of
regulatory and ethical constraints.
P6 Prepare a cash budget from given data
for an organisation using a spreadsheet.
P7 Discuss the benefits and limitations of
budgets and budgetary planning, and
control for an organisation.
M1 Evaluate the context and purpose of
the accounting function in meeting
organisational, stakeholder and societal
needs and expectations.
M4 Identify corrective actions to
problems revealed by budgetary planning
and control for effective organisational
decision making.
D1 Critically evaluate the role of
accounting in informing decision making
to meet organisational, stakeholder and
societal needs within complex operating
environments.

D3 Justify budgetary control solutions and
their impact on organisational decision
making to ensure efficient and effective
deployment of resources.
P3Prepare financial statements from a given
trial balance for sole traders, partnerships
and not-for-profit organisations, to meet
accounting principles, conventions and
standards.
P4 Calculate and present financial ratios
from a set of final accounts.
P5 Compare the performance of an
organisation over time using financial ratios.
M2 Produce financial statements from a
given trial balance, making appropriate
adjustments.
M3 Evaluate the performance of an
organisation over time, using financial ratios
with reference to relevant benchmarks.
D2 Critically evaluate financial statements
to assess organisational performance using a
range of measures and benchmarks to make
justified conclusions.

PART – A
The link for the block is attached below:
https://shonemahen.blogspot.com/2022/11/the-role-of-accounting-in-organization.html

PART – B
Sales Budget
1st quarter 2nd quarter 3rd quarter 4th quarter
Sales units 4,050 4,200 4,350 3,900
Selling price per unit 90 90 90 90
Sales in rupees 364,500 378,000 391,500 351,000
Production Budget
1st quarter 2nd quarter 3rd quarter 4th quarter
Sales units 4,050 4,200 4,350 3,900
Expected closing stock 420 435 390 405
Number of units required 4,470 4,635 4,740 4,305
Less: Opening stock - (420) (435) (390)
No of units to be produced 4,470 4,215 4,305 3,915 16,905
Cost per unit 64 64 64 64
Total production cost (Rs) 286,080 269,760 275,520 250,560
Cash Budget
1st quarter 2nd quarter 3rd quarter 4th quarter
Cash Receipts
Customer receipts - 364,500 378,000 391,500

- 364,500 378,000 391,500
Cash Payments
Purchase of fixed assets (100,000)
Acquisition of stock (12,000)
Labor cost (134,100) (126,450) (129,150) (117,450)
Overhead (39,412) (37,163) (37,957) (34,518)
Supplier payments (35,760) (105,240) (101,880) (100,200)
(321,272) (268,853) (268,987) (252,168)
Net cash balance (321,272) 95,647 109,013 139,332
The benefits and limitations of budgets, budgetary planning, and budgetary control.
Adhering to the budget can benefit the company in multiple ways. A proper budget planning and controlling
can help to maximize financial stability. A budget makes it simpler to pay bills on time, accumulate an
emergency fund, and save for significant costs like a vehicle or home by keeping track of spending and
sticking to a plan. Overall, having a budget gives a company more financial stability for both the short and
long term.
BENEFITS:
 For different periods and subperiods, budgets establish performance criteria. Actual performance
may be compared to standards on a regular basis, and discrepancies can be promptly corrected.
 The basis for developing precise and defined plans is provided by budgets, which outline the time
and money that each department head is expected to spend. Budgets are based on specified actions
that merit evaluation and modification (flexible). Goals are therefore accomplished while staying
within the boundaries of the set targets, maximizing the utilization of available resources.
 Making budgets with managers at various levels helps to organize diverse organizational tasks. To
make the most use of organizational resources, managers from all departments and levels collaborate
and coordinate their efforts. Activities of numerous sub-units are coordinated through budgetary

control to bring them closer to organization's goals. As example, the budget for sales must be linked
with the budget for purchases, which must then be coordinated with the budget for labour. This
necessitates open communication between the various departments, which makes coordination
easier.
 Budgets outline who is responsible for spending money when, where, and how, as well as any
potential revenue-generating sectors. Financial forecasts assist top managers in granting power to
subordinates to complete budgeted tasks within the parameters anticipated in the budget.
 A way to detect departures from the expected performance is provided by budgets, which compare
departmental and individual performance to benchmarks. In order to correct irregularities and
identify their causes to prevent recurrence, managers can take appropriate measures. This gives
organizational activity, direction under regulated circumstances.
LIMITATIONS:
 Budgets emphasize future expectations, but they also have the influence of past activities. Events that
weren't relevant in the past might not be included in budgets in the future even if they turn out to be
relevant over time. Making zero-base budgeting, where significant activities are examined for each
budgeted period and included in the budgets, is another way to solve this issue.
 Managers may disregard organizational goals in order to stay within the parameters of budgeted
goals and achieve budgeted goals at the expense of organizational goals.
 The prospect of innovation and change may be impeded when funds are allocated to various
operational budgets because it may not be able to secure extra funding and resources to take
advantage of environmental opportunities.
 Budgetary allocations must be changed since they are based on forecasts of the future, thus they will
need to be adjusted if the events do not occur as expected. Therefore, future uncertainties may have
an impact on how reliable budgets are. This does not, however, minimize the significance of
budgets.
How other organizations are adhering to the budget planning and budgetary control.

Roshan trading Pvt (LTD) is a hardware and aluminium fabricator company which is located in Wellawatta.
The company’s business activities are similar to the company that we have discussed above. The table below
displays a comparison between the actual and budgeted values.At the beginning of the month, the
corporation made a decision regarding the budget for December 2022. The management is currently
comparing the actual performance to the monthly budgeted performance.
Particulars Budget Actual Variance
Sales Rs.25,000,000 Rs.24,500,000 -2.0%
Cost of goods sold Rs.12,000,000 Rs.12,500,000 -4.2%
Gross profit Rs.13,000,000 Rs.12,000,000 -7.7%
Gross margin 52.0% 49.0% -3.0%
Selling, general and
administration
Rs.10,000,000 Rs.9,000,000 10.0%
EBITDA Rs.3,000,000 Rs.3,000,000 0.0%
EBITDA margin 12.0% 12.2% 0.2%
The table shows that sales have stayed 2.0% below expectations while COGS were 4.2% over budget,
resulting in a lower-than-anticipated gross margin. The impact of greater COGS on EBITDA margin was
mitigated by SG&A, which was 10.0% better than budget. In this instance, the business wants to look into
the causes of the reduced sales and greater COGS in order to make adjustments in the months to come. The
company management has decided to reduce the cost by following these steps
 they may frequently benefit from bulk savings when they purchase in bigger numbers. Additionally,
logistic reductions could be advantageous to the company. Shipping a container full of goods is less
expensive per unit than shipping a pallet full of goods. Company will Inquire with suppliers about
any discounts that could be available if the company made greater purchases.
 Another option to cut costs is to outsource. For instance, their competitors have recently emerged as
a preferred outsourcing. Another possible way to reduce the COGS for the business is to outsource
manufacturing to a country where material and labour costs are cheaper than at home Nevertheless,
regardless of the off-shore location chosen for manufacturing, the fundamentals are the same.
 The company is also planning to automate the workplace with machines. This can save the
companies time, and money in future. The starting cost could be a big amount, but this will help
them in long term.

Budgeting is crucial for the success of any business. By sitting down and thinking about the wisest ways to
spend your money, you can create a budget. This procedure is guided by facts and numbers. The overall
budget should be divided into smaller ones. company need one for things like operations costs, revenue,
acquisitions of new property and equipment, marketing, new hires, and production, to name a few. they may
make informed decisions based on a balanced assessment of the requirements of all sections of the
organization by taking a comprehensive look at all of these areas of the firm.The budget provides insight
into a company's performance. Your income serves as the basis of your budget. If you discover that you are
falling short of your income goals and must reduce your spending, this is a sign that you need to focus your
money in a wiser way. To increase income levels, for instance, you can reallocate monies from other budget
categories to marketing and sales.Your budget will reflect growth if it includes plans for expansion as well
as equipment and property acquisitions. Such a budget enables you to concentrate on saving money for
expanding rather than just surviving your organization. Due to your attention being on your future bottom
line as well as your current bottom line, you are better able to make judgments. These are some key points
that could help an organization to make effective decision makings when it comes to budgeting and running
a successful business.
PART – C
Sales 71,000
(-) Cost of sale 7,700
Opening stocks 30,000
Purchases 6,900

Closing stocks 30,800
Gross profit 40,200
(+) Other income 986
Over provision 41,186
(-) Office and admin expenses
Building depreciation 2,000
Office equipment depreciation 660
Telephone and electricity 8,310
Insurance 2,600
Sales and wag. 1,300
26,570
Depreciation 1,760
Bad debts 300
Sal. commission 4,300
(-) Interest cost 2,660 9,020
Net profit 5,596
Saman Trading
Statement of Comprehensive Income for the year ended 31st March 2019.
Saman trading
Statement of financial position as of 31st March
Description (Rs. ‘000) (Rs. ‘000)
Assets
Non-Current assets
Land 11,000
11,000
Building (40,000-12,000) 40,000
28 000
Motor vehicle 8,800
4,160
Office equipment 5,500
3,760
46,920
Current assets
Inventory 6,900

Trade receivables 12,446
Prepaid expenses 1,066
Cash in hand 5,240
25,646
Total assets 72,566
Capital liabilities 28,000
Drawings (2.400)
Net Profit 5,596
31,196
Non-current liabilities
Bank loan 19,000
Current liabilities
Accrued electricity 710
Accrued interest 2,660
Bank O/D 3,800
Trade payables 15,200 22,370
Total equity and liability 72,566
ABN Associates
Statement of comprehensive income for the year ended 31st March 2019
Description (Rs. ‘000) (Rs. ‘000)
Sales 3,800
(-) Cost of sales (1900-120) 1,780
Gross profit 2,020
Other income 50 50
Profit on disposal
Expenses
Depreciation (180)
Interest on loan (40)
Operational expense (850) (1070)
Profit for appropriation 1,000
Interest on capital
A 50
B 40
N 40 130
Shares of profit

A 348
B 261
N 261 870
ABN Associates
Statement of financial position as at 31st March 2019
Description (Rs. ‘000) (Rs. ‘000)
Assets
Non-Current assets
Property plant and equipment (900-180-50) 670
Current assets
Interests 585
Trade receivables 280
Cash at bank 500 1,365
Total assets 2035
Capital liabilities
Capital- A 500
B 400
N 400 1,300
Current A/C balances
A 128
B 1
N 256 385
Non-current liabilities
Loan A/C by Nimal 200
Current liabilities
Payables 150 350
Total equity and liability 2,0350
ABN Associates
Partners current A/C
A B N A B N
Opening balance - 125 85 Opening balance 225 - -

Withdrawal of
inventory 120
Interest capital
50 40 40
Equipment 100 Loan interest 40
Drawings 275 175 Share of profit 348 261 261
Balance Carried
down 128 1 256
623 301 341 623 301 341
Balance brought
forward 128 1 256
Limited Companies
Wikram PLC
Income statement for the year ended 31st march 2015
Sales 19300
(-)Cost of sales -11600
Gross profit 7700
Other income
Discount 120
7820
Admin expenses
Depresaction-Buliding 500
Motor Vehicle 420
Computer 100
Machinery - Lease 375
EPF 300
ETF 60
Telephone 175
Audit Fee 60 1990
Selling and distribution
Doubtful depts 4
Advertising 100
Discount 50
Sales Commission 20
Donation 30 204

Finance Expense
Bank loan interest 120
Lease interest 100 220
Profit before tax 5406
(-) Tax -220
Profit after tax 5186
(-) Dividend -500
Net Profit 4686
Wikram PLC
Financial position for the year ended 31st march 2015
Asset
Non Current Assets
Land 16000 14300
Building 5000 2000 3000
Motor Vehicle 4200 1680
Computer 1000 220
Machinery 1500 375
4275 21725
Current Asset
Closing Inventory 350
Debtors 1240
(-) Provision (104) 1136
Prepaid expenses 100
Cash 895 2481
Total assets 24206
Capital and liabilities
Equity 21186
Non- Current liabilities
Lease Obligation 800
10% bank loan 1200 2000
Current liabilities

Lease interest 100
Lease installment 300
Tax payable 45
EPF-Employer 300
ETF 60
EPF-Employee 200
Accrued interest 120
Trade payable 1650
Dividend 1500
Bank Overdraft 145 4420
Total capital and liabilities 27606
Wikram PLC
Statement of change in equity as at 31st March 2015
Add Subtract Balance
Balance as at 01.04.2014 statal capital 10,000 10,000
Retained earnings 7,500 300 9,200
2,000
General reserve 300
Realization loss (note 03) 700 (700+1000) -1,000
Profit for the year 4,686 2000 2,686
21,186
 Note 01 – The cost of inventory as at 31.03.2015 has been valued at the first out (FIFO) method
 Note 02 – Dividend declaration of Rs.,500,00 to the ordinary shareholders of the company
 Note 03 – Land revaluation of Rs.1,000,000 on 3.03.2015
RUBA PLC
Cash flow statement year ended 31st March 2015
Cash flow from operating activities
Profit before tax 2,265
Depreciation 300
Loss on disposal 50
Interest received (75)
Interest paid 760 1,035

3,300
Working capital adjustments
Increase in A/C receivables (800)
Decrease in stocks 500
Increase in account payable 110 (190)
Cash flow from operating activities following working
capital adjustments 3,110
Interest paid (700)
Income tax (1,150) (1,850)
Net cash flow from operating activities 1,260
Cash slow from investing activities
Cash flow from disposal of computer 70
Cash flow from loan interest 85
Cash flow from purchase of photocopy machine (120)
Net cash flow from investing activities 35
Cash flow from financial activities
Cash inflow from ordinary share issues 500
Cash outflow from dividend paid (665)
Net cash flow from financial activities (155)
Change in cash flow during the year 1,140
Opening cash balance 300
Closing cash balance 1,440
Accrued interest A/C
B/B/F 60
Cash 700 Income statement 760
B/C/D 120
820 820
Income tax payable
B/B/F 100
Cash 1150 P&L 1200
B/C/D 150

1300 1300
Loan interest receivable
B/B/F 50
P&L 75 Cash 85
B/C/D 40
125 125
Dividend
B/B/F 250
Cash 655 P&L 605
B/C/D 200
855 855
When looking at the financial statements of the above companies, the difference can be seen. The total value
of a sole proprietorship's assets, liabilities, and owner capital reveal the entity's financial situation. A sole
proprietorship's balance sheet lists the name of the company, the statement's name, and the date of the
statement whereas a partnership comprises two or more people cooperating to achieve a certain goal. The
number of partners may have a maximum in various jurisdictions. The requirement to allocate profits to
each partner distinguishes partnership accounting from general organization business accounting. The
revenue may be distributed on a decided-upon fractional basis or in proportion to the amount of capital
invested. When it comes to company accounts Shareholders fund = Share Capital + Retained Earnings +
Other Revenue & Capital Reserves and a limited company is imposed tax as it is a separate legal
entityNeeds to follow proper accounting concept, principles, rules, and another regulatory framework.Needs
to be audited and therefore needs to follow the strict accounting concepts, principles, rules, and other
regulatory framework.
The fundamental groups of line items that make up financial statements are their constituents. Depending on
how the firm is structured, these classifications will change. As a result, the components of financial
statements for for-profit businesses differ slightly from one to another. Those major changes can be seen in
assets, Liability, Equity, revenue, and expenses. For example, liabilities of sole trader in the above, is very
high when comparing to other two businesses and Assets of the company business is higher than the other
two businesses. These up and downs can be happened in assets, liabilities, equity and expenses.

PART – D
Investor rations Year 2 Year 1
EPS (earnings per share)
(Profit of the year / No.of ordinary
shares) 0.126 0.112
DPS (Dividend per share)
(Dividend for the year / No.of ordinary
shares) 0.600 0.500
Liquidity ratios Year 2 Year 1
Current ratio 220:95 198:74
(Current assets / Current liabilities) 2.3:1 2.7:1
acid test ratio
(220-
115):95
(198-
82):74
1:1:1

Gearing ratio Year 2 Year 1
Debt equity ratio
(long term/ Share capital+ reserves 0.4545 0.475
Profitability ratio
ROCE
(PBIT/total assets - total liabilities) 0.1008 0.0942