Digital Dashboards and Impression Management in Accounting

This assignment delves into two key concepts: digital dashboards and impression management in accounting. It examines how dashboards visualize data to aid decision-making across various business functions. Furthermore, it analyzes the impact of impression management on financial reporting quality and capital allocation decisions. The discussion encompasses different aspects of impression management, including psychological, economic, and sociological factors, highlighting its complexity and implications for organizational communication.

Running head: BUSINESS AND ACCOUNTING FINANCE
Business and accounting finance
Name of the student
Name of the university
Author note

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Table of Contents
Question 1..................................................................................................................................2
1.1 Accumulated depreciation is the sum of cash that is accumulated for replacing the fixed
asset........................................................................................................................................2
1.2 To capitalize the amount means the amount will not charged as expense.......................2
1.3 Inventory methods............................................................................................................2
Question 2..................................................................................................................................4
A. Balance sheet and income statement...............................................................................4
B. With changed data...........................................................................................................8
Question 3..................................................................................................................................9
Requirement 1........................................................................................................................9
Requirement 2......................................................................................................................10
Requirement 3......................................................................................................................10
Question 4................................................................................................................................11
1. Major financial reports and their purposes....................................................................11
2. Importance of profits and cash flow..............................................................................11
3. Ethical issues of ABC case study..................................................................................12
Question 5................................................................................................................................12
Comparisons made with the ratios.......................................................................................12
Question 6................................................................................................................................13
A. Financial ratios..............................................................................................................13

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B. Chart for rate of return on sales.....................................................................................13
C. Report on calculation and chart.....................................................................................15
Question 7................................................................................................................................15
Business report for decision making aspect.........................................................................15
Reference..................................................................................................................................18

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Question 1
1.1 Accumulated depreciation is the sum of cash that is accumulated for replacing the
fixed asset
The accumulated depreciation is the asset’s total depreciation that is collected for the
useful life of the asset. Further, there is no doubt that the accumulated depreciation is the
collection of cash for replacing the assets. Any entity accumulates cash that is known as
depreciation to avoid the burden for large amount of cash that is required to replace the old
fixed asset or any machine.
1.2 To capitalize the amount means the amount will not charged as expense
Generally, capitalization is not treated as expenses as adding the fixed asset or
property is not the expenses for any organization. Purchase of new asset or collecting money
in the form of depreciation is regarded as the investment for future period and therefore,
cannot be termed as expense.
1.3 Inventory methods
 First-in-First-out or FIFO – under this, good purchased first are considered first for
selling
 First-in-first-out or (LIFO) – under this, good purchased last are considered first for
selling
 Weighted average – under this, the weighted average cost for all the gods purchased
are considered for selling the goods.
 Specific identification – It attaches actual cost to the identifiable product unit (Zhang
et al., 2014).

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Examples of various inventory methods
Data
Date Particulars Units Cost P.U Total cost
Oct-01 Opening inventory 50 $ 50.00 $ 2,500.00
Oct-03 Purchase 25 $ 40.00 $ 1,000.00
Oct-12 Purchase 50 $ 30.00 $ 1,500.00
Oct-18 Purchase 75 $ 25.00 $ 1,875.00 $ 6,875.00
Oct-31 Inventory on hand 150
FIFO method – cost of ending inventory
75 units @ 25 $ 1,875.00
50 units @ 30 $ 1,500.00
25 units @ 40 $ 1,000.00
Cost of 150 units $ 3,375.00
FIFO method – cost of ending inventory
50 units @ 50 $ 2,500.00
25 units @ 40 $ 1,000.00
50 units @ 30 $ 1,500.00
Cost of 150 units $ 3,500.00
Weighted average method – cost of ending inventory
Total cost of units available for sale $ 6,875.00
Total units available for sale 261
Average cost per unit $ 26.34
Cost of ending inventory $ 3,951.15
Specific identification method – cost of 75 units of ending inventory
Cost of ending inventory will be = 75 units * $ 25 = $ 1,875
The above cost is selected as it is easy to identify the specific lot for sales

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Question 2
A. Balance sheet and income statement
Income statement – Normal view

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Income statement – Formula view
Balance sheet – normal view

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Balance sheet – formula view

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B. With changed data
Income statement

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Balance sheet
Question 3
Requirement 1
Particulars FIFO LIFO Weighted Average
Ending inventory $ 8,760 $ 5,820 $ 7,289.66
Cost of goods sold $ 7,095 $ 10,035 $ 8,565.34

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Requirement 2
Particulars FIFO LIFO Weighted Average
Sales revenue $ 26,000 $ 26,000 $ 26,000
Cost of goods sold $ 7,095 $ 10,035 $ 8,565.34
Gross profit $ 18,905 15,965 $ 17,434
Under LIFO method, the gross profit is lowest as the cost of goods sold under this
method is highest.
Requirement 3
Particulars FIFO LIFO Weighted Average
Ending inventory $ 8,496 $ 5,600 $ 7,047.36
Cost of goods sold $ 6,832 $ 9,728 $ 8,280.64
Calculation of Gross profit
Particulars FIFO LIFO Weighted average
Sales revenue $ 26,000.00 $ 26,000.00 $ 26,000.00
Cost of goods sold $ 6,832.00 $ 9,728.00 $ 8,280.64
Gross profit $ 19,168.00 $ 16,272.00 $ 17,719.36
Under LIFO method, the gross profit is lowest as the cost of goods sold under this
method is highest.

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Question 4
1. Major financial reports and their purposes
The major financial reports prepared by an entity are as follows –
 Statement of the financial position – it represent the financial position of the
organization for the specific period under consideration
 Profit and loss statement – this statement is also called as the revenue statement and
represents the details of income and expenses of the company on a specific data
(Brigham & Ehrhardt, 2013).
 Statement of cash flow – this statement represents the bank as well cash balance
movement for a particular period under consideration. Cash movement is segregated
into investing activities, operating activities and financing activities.
 Changes in owner’s equity statement – the statement is also called as the retained
earnings statement and reveals the detail regarding the changes in owner’s equity over
the particular period under consideration (Henderson et al., 2015).
2. Importance of profits and cash flow
 Profit – for any of the business profit plays an important role specifically the start-up
business. Profit is stated as the financial reward or returns that are aimed by the
organizations to achieve. Earning profit is crucial as it indicated the fact that whether
the firm is in a position to obtain loan from bank or financial institution.
 Cash flow – this is crucial as it indicates that whether the company is able to pay off
their obligations with the available cash and whether the business is generating
sufficient cash to sustain for the long-term.

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3. Ethical issues of ABC case study
 ABC Learning owner was in the view that the financial statements are not of much
importance and therefore, ignored the horrible disorder of the accounts.
 The owner of the company forgot the fact that is is not the manager and his concept
regarding he is the most suitable person to operate the business led the business on the
concept of “too fast – too much – too expensive” which in turn led the company
towards unethical approach of earning profit at any cost
 Corporate governance practice of the company was of poor quality
Question 5
Comparisons made with the ratios
Three kinds of comparisons generally performed with the ratios are –
 Inter-firm comparisons – this comparison involve the comparisons among different
firms of the same industry. Therefore, it indicates performance of the firm as
compared to the competitor (Grinblatt & Titman, 2016).
 Trend analysis – it involves the ratio comparison of an entity over the specific time
period and the past ratios are compared with present ratios for the same entity. It
reveals the performance of the firm with regard to constancy, deterioration and
improvement
 Comparing with industry average or standards average – under this, the ratios of an
entity is compared with the industry average or the standard average of that ratio.

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Question 6
A. Financial ratios
Particulars 20X2 20X1
Rate of return on sales 6% 6%
Rate of return on Shareholder’s equity 6% 5%
Current ratio 3.46 2.91
Total debt to shareholder's equity ratio 0.10 0.10
Current debt to shareholder's equity ratio 0.04 0.05
Gross profit rate 35% 38%
Average collection period of Accounts receivable 18.86 20.08
P/E ratio 13 15
Dividend payout percentage 39% 25%
Dividend yield 3% 2%
B. Chart for rate of return on sales
Particulars 20X5 20X4 20X3 20X2 20X1 20X0
Gross margin on sales 520 380 200 260 320 300
Cost of goods sold 980 620 300 420 480 320
Sales 1500 1000 500 680 800 620
Net income 90 60 25 55 80 70
Rate of return on sales 6% 6% 5% 8% 10% 11%

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Line chart
Rate of return on sales
0%
2%
4%
6%
8%
10%
12%
6%6%
5%
8%
10%
11%
20X5
20X4
20X3
20X2
20X1
20X0
3D column chart
Rate of return on sales
0%
2%
4%
6%
8%
10%
12%
6% 6%
5%
8%
10%
11%
20X5
20X4
20X3
20X2
20X1
20X0

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C. Report on calculation and chart
Calculation – calculation for A for ratio has been done by using various formulas for the
given particular ratios. For the calculation, amount given in the spreadsheet are taken into
consideration. Ratios have been calculated for the year 20X2 as well as 20X1. Details of the
formulas used are mention in the excel sheet on the right hand side of each ratio.
Chart – for preparation of chart on rate of return on sales, amounts for 20X0, 20X1 and 20X2
has been taken from the figures provided. However, for the year 20X3, 20X4 and 20X5 own
made-up data has been considered. The return forecast has been shown through the line graph
and 3D column chart that is selected from the chart tools from the Excel sheet.
Question 7
Business report for decision making aspect
Digital dashboard
Introduction – the digital dashboard is the electronic interface that is used to visualize and
aggregate the data from various sources like web service, locally hosted files and database.
Dashboards assist in monitoring the business performance through display of actionable data,
historical trend and information on real-time basis (Whyte, 2013).
Discussion – each person involved in the business, irrespective of their responsibilities, want
to know the performance of the company. Digital dashboards assist in visualizations of data
to provide the answers of various questions like how many customers are there waiting for
the reply from sales representatives and how the campaign of the company is performing on
the social media. However, the final product requires time for designing (Sjöbergh & Tanaka,
2014). An efficient dashboard is constructed on strong foundation for good data. Further, the
efficient dashboard accumulates data into actionable, meaningful and concise visualizations.

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Conclusion – it is concluded from the above discussion that irrespective of various
departments, the dashboard assists in answering various questions required in business
scenario. Further, the visualizations can take various forms. The users shall identify which
one is appropriate for which business.
Accounting and impression management
Introduction – this is the impression management with regard to the accounting
communication. The impression management seeks to construct the organization’s
impression with the objective of appealing to the audiences evolving the stakeholders,
shareholders, media and general public (Yang & Liu, 2017).
Discussion – if the impression management is successful, then it will undermine the
financial reporting quality along with the misallocation of capital. The impression
management is identified with regard to four aspects. They are – critical, psychological,
economic and socio-logical. Using assumptions that are alternatively rational like
irrationality, bounded rationality, rationality notion and substantive rationality as the social

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contract, the impression management are segregated as accounting rhetoric, symbolic
management and self-service bias (Brennan & Merkl-Davies, 2013).
Conclusion – from the above discussion, it is concluded that the concept of impression
management is much complex and rich phenomenon as compared to predominant perspective
based on economy. The concept establishes a relationship among the organizational
audiences and managers and focuses on the real reason, real behaviour and real people.