Assignment on Introduction to Financial Accounting
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Added on 2019-12-04
Assignment on Introduction to Financial Accounting
Added on 2019-12-04
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INTRODUCTION TOFINANCIALACCOUNTING
Table of ContentsINTRODUCTION ..........................................................................................................................1ii) Discussing on record keeping system needed to ensure the revenue figure is accurate.........3iii) Discuss the process to achieve satisfactory corporate governance........................................4iv) Analysing Corporate social responsibility for J. Sainsbury and with valid examples...........6CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................9
INTRODUCTION Financial accounting is regarded as the specialized branch of accounting that supports inkeeping record of the financial transactions of the business. Further, it is possible to know realperformance of business in the market and on the basis of same management can take actionsregarding the same (Callahan, Stetz and Brooks, 2011). This type of accounting is usuallyundertaken by every type of company operating in the market and in turn it has positive impacton the overall operations also. Different types of statements are being prepared by companiessuch as income, balance sheet etc with the help of which financial position of enterprise can beeasily known and in turn it acts as development tool for the organization (Debarshi, 2011). Forconducting the present study organization chosen is J Sainsbury which operates in retail sectorand well known in the market for range of products it offers to its target market. Various taskshave been covered in the report which involves discussion of record keeping system, processesto achieve satisfactory corporate governance etc. How accounts provide useful information to external stakeholders Different types of accounts are being prepared by Sainsbury with the motive to know itsoverall performance in the market. Further, income statement, balance sheet and profit and lossaccount provides information regarding financial strength of the enterprise. Apart from this, dataregarding expenses, revenue, profits etc provides useful information to the external stakeholdersof the company (Macintosh and Quattrone, 2010). Generally, it is well known fact that manyparties are associated with the business who are interested in knowing the long term performanceof the business. Through income statement prepared by J Sainsbury revenue along with grossprofit of the enterprise can be known easily. Further, through this management along withshareholders can easily know whether company is operating efficiently in the market or not.Profit or loss incurred by the business supports in knowing whether the overall operations carriedout are effective or not (Silvester and et. al., 2014). In case of Sainsbury plc organization carriesout operations on wider basis and external stakeholders are interested in knowing aboutperformance of enterprise in the market. All the accounts prepared by the business providesuseful information such as regarding profit and loss, overall income, cost of operations etc.Income statement of organization provides information such as earning per share, financeincome etc. Shareholders, government, suppliers and other form of external parties are interestedin accessing accounts of the business for obtaining different type of information. So this, directly1
satisfies their need and helps company in knowing the real areas where it performance lacks andimprovement is needed. Apart from this balance sheet is another type of account being prepared by companywhich represents the real assets and liabilities of the company (Stenstrom and et. al., 2014). Itrepresents the non currents assets along with current assets of the J Sainsbury. Total assets of theenterprise are highlighting base of the company and the long term strength of organization.Moreover, asset base of the firm has enhanced as compared with past and this is highlighting thereal efficiency of company to perform in the market. Apart from this, liabilities owned bybusiness are also highlighted in the balance sheet of the enterprise which represents bills payable,borrowing and other form of equities of the organization. Retained earnings of the business arequite high and they are representing that j Sainsbury can easily satisfy its investors along withsuppliers, government due to presence of effective financial strength (Leszcynska, 2012). It hasassisted investors to purchase funds of the company due to strong financial base and this hasacted as development tool for the company in the market. So, in this way balance sheet of theorganization is also an effective statement in order to know financial capacity of the business.Cash flow statement is also prepared by J Sainsbury which considers the activitiesassociated with inflow and outflow of funds. On analyzing the statement of the business it hasbeen found that main investing activities of the company are purchase and sale of assets alongwith other type of activities (Sandalgrh and Bukh. 2014). Further, financing activities are linkedwith short term borrowings. This statement is providing proper information to shareholders alongwith banks and financial institutions associated with the company. It is representing that JSainsbury is efficient enough in satisfying need of the external stakeholders and this hassomehow assisted in managing long term growth of enterprise in the market. Apart from this,organization has also developed group statement of changes in equity and this is representing thereal financial activities of the enterprise (Terrance, 2014). Business is operating efficiently in themarket and is able to deal with its major expenses. Due to proper financial planning J Sainsburyis able to utilize its financial resources and this has acted as development tool for the enterprise.Every account of the business has been properly prepared and it is assisting in satisfying need ofevery party associated with the organization. Further, bank, suppliers, creditors, government andother type of parties are interested in knowing about performance of company in the market andsame is satisfied by business through its financial statements prepared. Apart from this it2
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