Accounting for Decision Making

This document discusses the importance of accounting for decision making in business. It covers budgeted income statements and cash budgets. It also provides advice on improving business activities. The document concludes with references for further reading.

Accounting for Decision
Making

Contents
INTRODUCTION.......................................................................................................................................3
PART A.......................................................................................................................................................3
Budgeted income statement and cash budget...........................................................................................3
PART B.......................................................................................................................................................5
Advice to the client..................................................................................................................................5
CONCLUSION...........................................................................................................................................7
REFERENCES............................................................................................................................................8

INTRODUCTION
Accounting is the mechanism for documenting banking transactions related to a business.
The financial reporting concludes with a summary, monitoring and interpretation of these
purchases to authorized bodies, regulatory authorities and revenue collection organizations.
Accounting financial statements are a succinct description of business activities over an
accounting cycle, outlining the activities, financial status and cash flows of a business (Simons
and VOß, 2018). Decision-making could generally be explained as selecting alternative
solutions. When no options were available then no choice is necessary. A baseline presumption
would be that the right alternative is one that includes the most profit or the minimum price. This
report based on the budget report in which mention all the financial statements. Moreover,
provide the right suggestion to client to improve their business activities and suggest different
strategies in proper manner.
PART A
Budgeted income statement and cash budget
Income statement: The budgeted income statement appears to contain every one of the
board materials taken on a standard income statement; however it is a representation of what the
financial statements will appear during current spending intervals. It is collated from an amount
of much other expenditure, the precision of that may vary with the budget system based on the
rationality of the components. It is incredibly crucial to check how a corporation's expected
quarterly earnings sound fair. It also discloses situations which are not monetarily provable
(including such needing massive amounts of debt) and can be used in mixture with the planned
balance sheet, which organisation can resolve by changing the existing operating budget (Dincer
and Yuksel, 2019).
Particulars $ $
Sales Revenues 250000
Service revenues 40000
Gross profit 290000

Other operating revenues
Interest revenue 4500
Operating expenses
Cost of goods sold 51050
Consulting expenses 2150
Utilities expenses 5250
Depreciation expenses - office furniture 550
Interest expenses 786
Insurance expenses 1350
wages expenses 12550
Sales commission expenses 920
Computer expenses 8260
Eye test expenses 7300
90166 294500
Net Profit before tax 204334
Cash budget: A budget is a predication of the retained earnings over a specified period
of time for a company. This funding is being used to evaluate if there's enough cash in the
institution organization manage. Companies use prices and market predictions to develop a
financial plan, alongside presumptions on required expenditures and catalogs of receivables
transactions (Jiang and Wei, 2018). A cash budget is analyzed to evaluate whether a firm will
have sufficient cash to proceed its operational activities. If a corporation does not provide
adequate funds to function, it must start raising more funds by issuing inventory or borrowing
more.
Particular March April May June July August
Balance at the
beginning 20000 20000 49000 47000 13000 -9000

(A) Receipts
Collection from credit
sales 30000 156000 168000 124000 144000 162000
Amount received from
customers 96000
Total (A) 146000 176000 217000 171000 157000 153000
(B) Payments
Credit purchase 50000 70000 80000 90000 100000
Loan 20000
Wages 30000 30000 30000 30000 30000 30000
Rent 4000 4000
Depreciation on fixed
assets 2000 2000 2000 2000 2000 2000
Variable overhead 10000 15000 18000 12000 14000 16000
Fixed overhead 30000 30000 30000 30000 30000 30000
Suppliers for purchase 50000
Total (b) 126000 127000 170000 158000 166000 178000
Total (a) - (b) 20000 49000 47000 13000 -9000 -25000
PART B
Advice to the client
Mr. James hunter and Dr Olivia Ng both are business partners and contact with the
Business advisory Pty Ltd in order to get financial success in their business. So they are getting
three proposals from the company side like expansion project, cost management strategy and
target marketing strategy. At the end they are selecting expansion project and want to conduct
activities at big level (Parker and et.al, 2018).

There are selecting expansion project because it is providing various benefits to client
and get over come from the Covid 19 such as:
 After expand the project they are getting profit in large manner that reach on 204334 that
is increasing at compare of last year.
 The cash budget of the business presents that at the end they are earning profit in every
months. It is showing good profitability of the business.
 They are meeting with different types of people that help them to increase their business
at large level.
 Due to this disease most of the employees are working from their home that was
impacting on their eyes. Thus, they require to eye test and sunglasses so this business
provide all the facility to their customers.
According to expansion project the owners believe that increasing their shop front
destination can enhance business. In particular, they would like to update the maximum facilities
floor space to have some extra floating shelves and extend the amount of eye-test rooms to
minimize client waiting times. Both stakeholders have some concerns about another venture as it
would involve high initial capital costs and loans, but, considering the prevailing environment, it
would be easier to do so now than earlier once rentals for property investment rise, than prices
rise. It helps to get financial success at large level and it support to business to become
sustainable (Zerilli, Maclaurin and Gavaghan, 2019).
At the time of project decision, my team faces two non financial issues that are
mentioned below:
Conflicts between the team members: Due to disease all the team members are linking to work
from home so it create the issue to match all the things according to budget and prepare proper
plan for the client. Every person has different views so each member presents their thoughts in
regard of the project selection. All the members are not participating properly that are creating
conflicting for me and other team members.
Matching the requirement of current and future legislation: To conduct new project in the
business require the follow all the legislation that set by the government for the particular
business otherwise it impact in the negative manner and show problems. When client decide to

select any proposal that time require to aware about the legislation and any changes apply by the
government in regard of their business operations.
These issues are impacting on the business in negative as well as positive manner.
Because when client face that problem so they are finding any solution of these issues and help
them to select particular project. It impact in the negative manner when they are selecting
particular project6 but did not find out any solutions so that time require to aware all the things.
At the end of the selection they are deciding to select expansion project and identify all the
advantages and disadvantages of this project such as:
Establish multiple revenues stream: The reality that development usually allows the
ability to deliver a diverse variety of goods and services is one of the greatest benefits of
business development. In doing just that can broaden stream of revenue, meaning doesn’t rely
solely on delivering one main good or service. Through compensating those declines with the
business earnings, they are already inoculated the company from a steady decline in supermarket
revenue, helping ensuring that your company will thrive if competition for eye tests goods
declines.
Attracts new customers: Another of the top reasons for corporate investment is reaching
out from a new range of consumers. While you still has a very well-mined consumer base, as you
grow there has to be a chance to attract new customers, particularly if that growth of the
company requires the development of services and products. Now they can insert into some kind
of new client market that is particularly interested in paintings, instead of just watching cartoons.
They maintain their old client base, but now they target a new collection of customers who are
art enthusiasts as well (Dinçer, Yüksel and Martinez, 2019)
There is company face some disadvantages such as:
Cash shortage - They may have to repay capital to afford game cost, e.g. purchase expensive
premises or materials
Disadvantaged performance - Increasing ones total production can lead to a reduction in
reliability, which can result in customer failure or revenues

Loss of control- They ought to assign assigned tasks or split the responsibilities among multiple
places as the industry expands
Increased capital needs - A bigger company requires more employees, more machinery or
infrastructure and more expenditure.
CONCLUSION
As per the above report it has been concluded that to make the decision in the business
require applying proper accounting standards and concepts in particular manner. There are
providing the expansion project to select that provide various benefits and over come from the
Covid 19 and set up their business in positive manner. At the time face various non financial
issues and find out the impact on the deciding of project.

REFERENCES
Books and Journal
Simons, A. and VOß, J. P., 2018. The concept of instrument constituencies: Accounting for
dynamics and practices of knowing governance. Policy and Society. 37(1). pp.14-35.
Dincer, H. and Yuksel, S., 2019. IT2-based fuzzy hybrid decision making approach to soft
computing. IEEE Access. 7. pp.15932-15944.
Jiang, W. and Wei, B., 2018. Intuitionistic fuzzy evidential power aggregation operator and its
application in multiple criteria decision-making. International Journal of Systems
Science. 49(3). pp.582-594.
Parker, A. M. and et.al, 2018. Robustness of Decision‐Making Competence: Evidence from Two
Measures and an 11‐Year Longitudinal Study. Journal of behavioral decision
making. 31(3). pp.380-391.
Zerilli, J., Knott, A., Maclaurin, J. and Gavaghan, C., 2019. Transparency in algorithmic and
human decision-making: Is there a double standard?. Philosophy & Technology. 32(4).
pp.661-683.
Dinçer, H., Yüksel, S. and Martinez, L., 2019. Balanced scorecard-based Analysis about
European Energy Investment Policies: A hybrid hesitant fuzzy decision-making approach
with Quality Function Deployment. Expert Systems with Applications. 115. pp.152-171.
McNamara, K. E., Bronen, R., Fernando, N. and Klepp, S., 2018. The complex decision-making
of climate-induced relocation: adaptation and loss and damage. Climate Policy. 18(1).
pp.111-117.
Calabrese, M., Iandolo, F., Caputo, F. and Sarno, D., 2018. From mechanical to cognitive view:
The changes of decision making in business environment. In Social Dynamics in a
Systems Perspective (pp. 223-240). Springer, Cham.