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Introduction to Accounting- PDF

   

Added on  2020-10-05

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Introduction to Accounting

TABLE OF CONTENTSINTRODUCTION......................................................................................................................3PART 1.......................................................................................................................................3a. Identifying and describing relevant stakeholders as per conceptual framework................3b. Explaining how financial statements meet the information need of stakeholders.............3PART 2.......................................................................................................................................4a. Describing advantages and disadvantages of marginal & absorption costing method......4b. Identifying costing system which is adopted by each type of business.............................5CONCLUSION..........................................................................................................................6REFERENCES...........................................................................................................................7

INTRODUCTIONFinancial accounting field laid high level of emphasis on summarizing, analyzing andreporting financial transactions which are related to the business. Further, managementaccounting system or tools furnish information about the internal operations and functions.The present report is based on Morrison’s, a leading retail business unit of UK, whichprovides customers with wide range of products or services at suitable prices. In this, reportwill provide deeper insight about the manner in which financial statements satisfyinformation need of stakeholders. Further, it also develops understanding about differenttypes of costing system such as absorption and marginal. PART 1a. Identifying and describing relevant stakeholders as per conceptual framework In accordance with International Accounting Standard Board (IASB), mainstakeholders of Morrison’s include shareholders, management team, employees, financialinstitution, suppliers, customers and government authority (IASB, 2018). On the basis ofaccounting rules and regulations company needs to prepare as well as publish financialaccounts & report at the end of financial year. b. Explaining how financial statements meet the information need of stakeholders Financial report which is published by Morrison’s at the end of accounting year fulfilsinformation need of concerned stakeholders to a great extent in the following manner:Internal stakeholderManagement: For making effectual operational and financing decisions managementteam of Morrison’s undertake as well as evaluate financial statements. Moreover,annual report clearly furnishes information about profitability, liquidity and solvencyaspects. Hence, considering such information management team would become ableto take suitable and strategic decisions for the near future. Employees: With the motive to assess future growth in both monetary and non-monetary terms personnel make evaluation of final accounts. Moreover, profitabilitystatement clearly presents the growth take place in income level of the firm andthereby assists in making estimation about salary, incentives and other benefits.

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