ACC701: Liquidation, Liabilities, Ethics & Governance at ABC Learning

This report analyzes the liquidation of ABC Learning Centre in Australia, examining the factors that led to its financial collapse. It begins by defining accounting and introducing ABC Learning, then delves into the company's liquidation due to increasing liabilities and financial stress. The report discusses the role of ethics and governance, highlighting how a focus on these areas may have overshadowed the company's financial condition. Key factors contributing to liabilities, such as understanding equity and owner draws, are explored. The report also addresses financial stress, its causes, and measures to manage it, including creating a budget and maintaining emergency funds. Recommendations for managing liabilities, upholding ethical standards, and implementing sound governance practices are provided. The report concludes that ABC Learning's demise was primarily due to a lack of financial resources and escalating liabilities.

ACCOUNTING

EXECUTIVE SUMMARY
 In the present report it is discussed about the
definition of accounting and its various factors in
ABC Learning centre of Australia.
 The introduction to the company and the services
provided is briefly discussed.

CONTENTS OF PPT
 INTRODUCTION
 LIQUIDATION & LIABILITIES
 ETHICS & GOVERNANCE
 MAJOR FACTORS IN LIABILITIES
 FINANCIAL STRESS
 RECOMMENDATION/ FINDINGS
 CONCLUSION
 REFERENCES

INTRODUCTION
 The process of keeping financial accounts is known as
accounting.
 The measurement, processing and communication of
financial information about economic entities such as
business and corporations (Deegan, C., 2013).

LIQUIDATION &
LIABILITIES
 Due to increase in liabilities the ABC Learning centre has
turned to liquidation of the company because the
organisation was in heavy loss. It turned into lack of
finance which created a financial stress and lead the
company in heavy financial crisis as a result of which the
owners wind up the education centre.
 The process by which a company is brought to an end.
The assets and property of the company are redistributed.
Liquidation is also sometimes referred to winding up or
dissolution of a business company or organisation.

CONTINUE
Something that is a hindrance or that puts an individual
or a group at a disadvantage or something someone is
responsible for or something that increases the chance
of something occurring is known as liability. Types of
liabilities in a company :

ETHICS AND GOVERNANCE
 The ABC Learning centre followed the ethics and
governance due to which they focused less on their
financial condition which increased the liabilities and lead
them towards liquidation of the company.
 It created a financial stress which lead the company in
heavy financial crisis as a result of which the owners wind
up the education centre. The branch of philosophy that
involves systematizing, defending and recommending
concepts of right or wrong conduct is known as ethics.

CONTINUE
The processes of governing, whether undertaken by a government,
market or the network of an organisation or organised society
(Chen and et.al., 2016).
It relates to the processes of interaction and decision making
among the actors involved in a collective problem that lead to
the creation, reinforcement or reproduction of the social norms
and institutions is known as governance.

MAJOR FACTORS IN
LIABILITIES
Understanding equity : the accounting equation details the
relationship that transaction have to a company's financial
position. The general ledger can be divided into three groups :
liabilities which are payable accounts, assets which are the
receivables and the liabilities which are loss to the business.
Owners draw : the owner withdraws cash from a sole
proprietorship's equity account, it is listed as an owner's draw
transaction (Williams, J., 2014). Withdrawing the funds directly
from the equity account will reduce the business equity.

FINANCIAL STRESS
The condition where a company cannot meet, has difficulty paying
off its financial obligations to its creditors mainly due to the
high rates of fixed costs is known as financial stress.
The condition in which the economic events that creates anxiety,
worry or a sense of scarcity which is accompanied by a
physiological stress response (Jaffe, A.E. and Irizarry, R.A.,
2014). The major signs of financial distress are :

CONTINUE
The measures to be taken to manage the financial stress of a
company :
Create a budget : creating a budget help in planning to spend the
money,it ensures that the company always have the enough
money to plan or purchase the things which are essential for
business. Budgeting also helps a business to remain out of the
danger of liquidation.
Emergency funds : the best thing a business can have is to prepare
itself with an emergency fund to access to additional money
(Smith, M., 2017). The emergency funds help to over the
problem like job loss, significant medical expenses, etc in a
business.

RECOMMENDATIONS/
FINDINGS
From the present report it can be recommended that, the
company should manage its liabilities by taking different
measures to control or avoid the liquidation. The company
should follow the ethics such as honesty, integrity, Promise
keeping and trustworthiness, Loyalty, Fairness, Leadership and
Accountability avoid raising of the controversial issues,to
recommendat the right concept of ethics for a business.

CONTINUE...
The democratic governance, economic and financial, e-
governance, corporate governance and the environmental and
natural governance should be followed by the company which
would have made or helped in making good and better
decision for company to be in profit (Christensen and et.al.,
2015).

CONCLUSION
From the above report it can be concluded that, the company
ABC Learning was wind up in Australia due to lack of money
which brought an end to the company in others words
liquidation and increasing liabilities of the business.

REFERENCES
Books & Journals
Deegan, C., 2013.Financial accounting theory. McGraw-Hill Education
Australia.
Bebbington, J., Unerman, J. and O'Dwyer, B. eds., 2014. Sustainability
accounting and accountability. Routledge.
DRURY, C.M., 2013. Management and cost accounting. Springer.
Khairi, M.S. and Baridwan, Z., 2015. An empirical study on organizational
acceptance accounting information systems in Sharia banking. The
International Journal of Accounting and Business Society, 23(1), pp.97-122.
Williams, J., 2014. Financial accounting. McGraw-Hill Higher Education.
Jaffe, A.E. and Irizarry, R.A., 2014. Accounting for cellular heterogeneity is
critical in epigenome-wide association studies. Genome biology, 15(2),
p.R31.

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