Objective of Management Accounting

Added on -2020-02-19

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Accounting for Managers 1Accounting for Managers
Accounting for Managers 2Table of Contents1. Business Plan...............................................................................................................................32. Legal Form for business..............................................................................................................33. Financial Sources.........................................................................................................................44. Preparation of Financial Statement..............................................................................................5Projected Balance Sheet...............................................................................................................5Projected Income Statement.........................................................................................................75. Role of Accounting......................................................................................................................96. Importance of Financial Statements Analysis...........................................................................117. Management Decisions..............................................................................................................12References:....................................................................................................................................13
Accounting for Managers 31. Business PlanThe new business plan is based on to provide architectural services to the different clients orcustomers across Brisbane, Australia. The demand for the apartments designed on architecturalbasis has been rapidly increased in recent years due to the desire or wants of people to live closerproximity where they will be able to play, socialise as well as work. The rapid increase ofpopulation in this region has certainly fuelled more oppturnities for this type of business plans. Inaddition, demand for urban apartments has also been increased which is also supported bygovernment in infrastructure development that certainly attracts more number of architects tostart their new business operations. Classic Architects is the proposed name for this new business(Collier, 2015). This will provide advanced architectural services to design practical and creativesolutions for development of urban apartments which mainly focuses on niche market across theregion. The business will be sole proprietorship in legal form as its owner is one of renownedarchitect in region with vast experience and design capabilities mainly specialised to developurban apartments based on new designs. In staring two years, business will be operated fromapartment which has been designed by owner. This will definitely provide designing talent ofowner as tangible proof and helps him to promote his business. The sources like e-mails, phones,or face to face meetings can be used to interact with different clients and mainly deals in theinfrastructure industry to provide best architectural design solutions to clients or customers. 2. Legal Form for businessSole proprietorship will be the best suitable legal form of ownership for the business operationsof Classic Architects. This is an easy and cost efficient legal form of business to start. This willalso require minimal legal requirements to start new business which help to reduce extra
Accounting for Managers 4administrative expenses. Owner has the flexibility to make his decisions and helps to controloverall business operations (Hartley, 2014). Owner is also able to transfer business to otherperson without any legal considerations. This form also allows owner to retain all 100% profitsfor their business. This form has fewer paper work as well as legal restrictions. There is no needto maintain financial statements in sole proprietorship and owner also not require paying extrataxes to the government. 3. Financial SourcesThere are various sources of finance available to finance capital within new business operations.This includes options like personal capital, retained profits, asset sales, leases, and trade credit aswell as bank loans.Personal capital:The owners or sole trader can invest their own savings in order to expand their businessoperations (Dhamija, 2015). The Sole traders are confident enough for future perspectives ofbusiness operations and always prepare to invest some additional savings in order to enhancetheir overall business operations. This financial source also reduces burden related to interestpayments over the sole traders or owners and at the same time, also able to retain or maintain fullcontrol on their overall business operations. Retained earnings:The profits which are not distributed as the dividends but retained to enhance the businessoperations are termed as retained earnings or profits. A business profitable by nature alwaysgenerates positive value for net income (DRURY, 2013). The Sole traders can use retained

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