Accounting for Managers Report: IFRS, Stakeholders, and Decisions

This report provides an in-depth analysis of International Financial Reporting Standards (IFRS) and their crucial role in financial reporting. It begins by defining IFRS and outlining its objectives, emphasizing the importance of fair presentation in financial statements to accurately reflect an organization's financial position, performance, and cash flow. The report highlights the standard's guidelines for financial statement preparation, ensuring comparability and transparency. It then explores how financial statements are used by various stakeholders, including investors, creditors, employees, and government entities, in making informed decisions. The report also delves into common accounting ratios and the significance of financial information for small business owners and potential investors. Finally, it emphasizes the role of financial statements in assessing an organization's profitability, stability, and ability to meet its obligations, making it an essential tool for decision-making across multiple stakeholder groups. The report also includes a reference list of sources consulted.

Running head: ACCOUNTING FOR MANAGERS
Accounting for Managers
Name of the Student
Name of the University
Authors Note
Course ID

1ACCOUNTING FOR MANAGERS
Table of Contents
Requirement 1:...........................................................................................................................2
Requirement 2:...........................................................................................................................3
Requirement 3:...........................................................................................................................6
Requirement 4:...........................................................................................................................7
Requirement 5:...........................................................................................................................7
Requirement 6:...........................................................................................................................9
Reference list:...........................................................................................................................12

2ACCOUNTING FOR MANAGERS
Requirement 1:
Dr. Cr.
Date Amount Amount
01-02-2018 Cash at Bank A/c. Dr. $53,000
To, Julia: Capital A/c. $53,000
01-02-2018 Prepaid Expenses A/c. Dr. $9,000
To, Cash at Bank A/c. $9,000
03-02-2018 Offi ce Furniture A/c. Dr. $6,600
To, Accounts Payable A/c. $6,600
03-02-2018 Computer Equipment A/c. Dr. $7,000
To, Accounts Payable A/c. $7,000
05-02-2018 Accounts Receivable A/c. Dr. $700
To, Service Revenue A/c. $700
06-02-2018 Prepaid Expenses A/c. Dr. $360
To, Cash at Bank A/c. $360
11-02-2018 Cash at Bank A/c. Dr. $1,200
To, Service Revenue A/c. $1,200
20-02-2018 Cash at Bank A/c. Dr. $250
To, Accounts Receivable A/c. $250
22-02-2018 Cash at Bank A/c. Dr. $800
To, Service Revenue A/c. $800
22-02-2018 Accounts Receivable A/c. Dr. $650
To, Service Revenue A/c. $650
28-02-2018 Accoutant's Salary A/c. Dr. $3,600
To, Cash at Bank A/c. $3,600
28-02-2018 Julia: Drawings A/c. Dr. $2,500
To, Cash at Bank A/c. $2,500
28-02-2018 Utility Expenses A/c. Dr. $400
To, Accrued Expenses A/c. $400
28-02-2018 Lease Expenses A/c. Dr. $3,000
Advertisement A/c. Dr. $120
To, Prepaid Expenses A/c. $3,120
28-02-2018 Depreciation Expense A/c. Dr. $304
To, Accumulated Depreciation -
Offi ce Furniture A/c. $110
To, Accumulated Depreciation -
Computer equipment A/c. $194
Particulars
In the books of ….
Journal Entries

3ACCOUNTING FOR MANAGERS
Requirement 2:
Cash at Bank A/c.
Date Particulars Amount Amount Balance
01-02-2018 Julia: Capital A/c. $53,000 $53,000 Dr.
01-02-2018 Prepaid Expenses A/c. $9,000 $44,000 Dr.
06-02-2018 Prepaid Expenses A/c. $360 $43,640 Dr.
11-02-2018 Service Revenue A/c. $1,200 $44,840 Dr.
20-02-2018 Accounts Receivable A/c. $250 $45,090 Dr.
22-02-2018 Service Revenue A/c. $800 $45,890 Dr.
28-02-2018 Accoutant's Salary A/c. $3,600 $42,290 Dr.
28-02-2018 Julia: Drawings A/c. $2,500 $39,790 Dr.
Accounts Receivable A/c.
Date Particulars Amount Amount Balance
05-02-2018 Service Revenue A/c. $700 $700 Dr.
20-02-2018 Cash at Bank A/c. $250 $450 Dr.
22-02-2018 Service Revenue A/c. $650 $1,100 Dr.
Prepaid Expenses A/c.
Date Particulars Amount Amount Balance
01-02-2018 Cash at Bank A/c. $9,000 $9,000 Dr.
06-02-2018 Cash at Bank A/c. $360 $9,360 Dr.
28-02-2018 Lease Expenses A/c. $3,000 $6,360 Dr.
Advertisement A/c. $120 $6,240 Dr.
Office Furniture A/c.
Date Particulars Amount Amount Balance
03-02-2018 Accounts Payable A/c. $6,600 $6,600 Dr.
Computer Equipment A/c.
Date Particulars Amount Amount Balance
03-02-2018 Accounts Payable A/c. $7,000 $7,000 Dr.

4ACCOUNTING FOR MANAGERS
Accounts Payable A/c.
Date Particulars Amount Amount Balance
03-02-2018 Offi ce Furniture A/c. $6,600 $6,600 Cr.
03-02-2018 Computer Equipment A/c. $7,000 $13,600 Cr.
Accrued Expenses A/c.
Date Particulars Amount Amount Balance
28-02-2018 Utility Expenses A/c. $400 $400 Cr.
Accumulated Depreciation - Office Furniture A/c.
Date Particulars Amount Amount Balance
28-02-2018 Depreciation Expense A/c. $110 $110 Cr.
Accumulated Depreciation - Computer equipment A/c.
Date Particulars Amount Amount Balance
28-02-2018 Depreciation Expense A/c. $194 $194 Cr.
Julia: Capital A/c.
Date Particulars Amount Amount Balance
01-02-2018 Cash at Bank A/c. $53,000 $53,000 Cr.
28-02-2018 Profit & Loss Adjustment A/c. $4,074 $48,926 Cr.
Julia: Drawings A/c. $2,500 $46,426 Cr.
Julia: Drawings A/c.
Date Particulars Amount Amount Balance
28-02-2018 Cash at Bank A/c. $2,500 $2,500 Dr.
Julia: Capital A/c. $2,500 $0
Service Revenue A/c.
Date Particulars Amount Amount Balance
05-02-2018 Accounts Receivable A/c. $700 $700 Cr.
11-02-2018 Cash at Bank A/c. $1,200 $1,900 Cr.
22-02-2018 Cash at Bank A/c. $800 $2,700 Cr.
22-02-2018 Accounts Receivable A/c. $650 $3,350 Cr.
28-02-2018 Profit & Loss Adjustment A/c. $3,350 $0

5ACCOUNTING FOR MANAGERS
Accoutant's Salary A/c.
Date Particulars Amount Amount Balance
28-02-2018 Cash at Bank A/c. $3,600 $3,600 Dr.
Profit & Loss Adjustment A/c. $3,600 $0
Utility Expenses A/c.
Date Particulars Amount Amount Balance
28-02-2018 Accrued Expenses A/c. $400 $400 Dr.
Profit & Loss Adjustment A/c. $400 $0
Lease Expenses A/c.
Date Particulars Amount Amount Balance
28-02-2018 Prepaid Expenses A/c. $3,000 $3,000 Dr.
Profit & Loss Adjustment A/c. $3,000 $0
Advertisement A/c.
Date Particulars Amount Amount Balance
28-02-2018 Prepaid Expenses A/c. $120 $120 Dr.
Profit & Loss Adjustment A/c. $120 $0
Depreciation Expense A/c.
Date Particulars Amount Amount Balance
28-02-2018
Accumulated Depreciation -
Offi ce Furniture A/c. $110 $110 Dr.
Accumulated Depreciation -
Computer equipment A/c. $194 $304 Dr.
Profit & Loss Adjustment A/c. $304 $0

6ACCOUNTING FOR MANAGERS
Requirement 3:
Dr. Cr.
Particulars Amount Amount
Cash at Bank A/c. $39,790
Accounts Receivable A/c. $1,100
Prepaid Expenses A/c. $9,360
Offi ce Furniture A/c. $6,600
Computer Equipment A/c. $7,000
Accumulated Depreciation - Offi ce
Furniture A/c. $0
Accumulated Depreciation - Computer
equipment A/c. $0
Accounts Payable A/c. $13,600
Accrued Expenses A/c. $0
Julia: Capital A/c. $53,000
Julia: Drawings A/c. $2,500
Service Revenue A/c. $3,350
Accoutant's Salary A/c. $3,600
Utility Expenses A/c. $0
Lease Expenses A/c. $0
Advertisement A/c. $0
Depreciation Expense A/c. $0
TOTAL $69,950 $69,950
In the Books of….
Pre Adjustment Trial Balance
as on 28 February 2018
Dr. Cr.
Particulars Amount Amount
Cash at Bank A/c. $39,790
Accounts Receivable A/c. $1,100
Prepaid Expenses A/c. $6,240
Offi ce Furniture A/c. $6,600
Computer Equipment A/c. $7,000
Accumulated Depreciation - Offi ce
Furniture A/c. $110
Accumulated Depreciation -
Computer equipment A/c. $194
Accounts Payable A/c. $13,600
Accrued Expenses A/c. $400
Julia: Capital A/c. $53,000
Julia: Drawings A/c. $2,500
Service Revenue A/c. $3,350
Accoutant's Salary A/c. $3,600
Utility Expenses A/c. $400
Lease Expenses A/c. $3,000
Advertisement A/c. $120
Depreciation Expense A/c. $304
TOTAL $70,654 $70,654
In the Books of….
Post Adjustment Trial Balance
as on 28 February 2018

7ACCOUNTING FOR MANAGERS
Requirement 4:
Dr. Cr.
Date Amount Amount
28-02-2018 Profit & Loss Adjustment A/c. Dr. $7,424
To, Accoutant's Salary A/c. $3,600
To, Utility Expenses A/c. $400
To, Lease Expenses A/c. $3,000
To, Advertisement A/c. $120
To, Depreciation Expense A/c. $304
Service Revenue A/c. Dr. $3,350
To, Profit & Loss Adjustment A/c. $3,350
Julia: Capital A/c. Dr. $4,074
To, Profit & Loss Adjustment A/c. $4,074
Julia: Capital A/c. Dr. $2,500
To, Julia: Drawings A/c. $2,500
In the books of ….
Closing Entries
Particulars
Requirement 5:
Particulars Amount
Service Revenue A/c. $3,350
TOTAL REVENUE $3,350
Expenses:
Accoutant's Salary A/c. -$3,600
Utility Expenses A/c. -$400
Lease Expenses A/c. -$3,000
Advertisement A/c. -$120
Depreciation Expense A/c. -$304
NET LOSS -$4,074
In the Books of….
Income Statement
for the period ending 28 February 2018

8ACCOUNTING FOR MANAGERS
Particulars Amount
Current Assets:
Cash at Bank A/c. $39,790
Accounts Receivable A/c. $1,100
Prepaid Expenses A/c. $6,240
TOTAL CURRENT ASSETS $47,130
Non-Current Assets:
Offi ce Furniture A/c. $6,600
Accumulated Depreciation - Offi ce Furniture A/c. -$110
Computer Equipment A/c. $7,000
Accumulated Depreciation - Computer equipment A/c. -$194
TOTAL NON-CURRENT ASSETS $13,296
TOTAL ASSETS $60,426
Current Liabilities:
Accounts Payable A/c. $13,600
Accrued Expenses A/c. $400
TOTAL CURRENT LIABILITIES $14,000
NON-CURRENT LIABILITIES $0
TOTAL LIABILITIES $14,000
NET ASSETS $46,426
Capital:
Julia: Capital A/c. $53,000
Less: Net Loss -$4,074
$48,926
Less: Drawings -$2,500
TOTAL CAPITAL $46,426
In the Books of….
Balancer Sheet
as on 28 February 2018

9ACCOUNTING FOR MANAGERS
Requirement 6:
The international financial reporting standard can be defined as the standard and
interpretation that is adopted by the international accounting standard board. The standard lay
down the guidelines that is required to be used by the companies in the preparation and
presentation of the financial statements in order to make sure that the financial statements of
the organizations are comparable with the previous year’s financial statements and with the
statement of the other entity (Christensen et al. 2015). The objective of the international
financial reporting standard in the preparation and presentation of financial statement is to lay
down the overall requirements relating to the structure and contents of the financial statement
together with some general functions. The requirements of the standard is generally
applicable to the general purpose financial statements that are presented and prepared in
compliance with the international financial reporting standard.
The standard requires the financial statements must be presented fairly in order to
reflect the financial position, financial performance and cash flow of the organization. Fair
presentation needs faithful presentation of the effects of transactions and conditions that are
in compliance with the definition and identification criteria for assets, liabilities, income and
expenditure that are set out under the framework (Nobes 2014). The international financial
reporting standard is laid down by the international accounting standard board. The objective
of the IASB is to create the standard in the best interest of the public. It requires presentation
of financial statements with understandable quality.
According to the international financial reporting standard the financial performance
and financial position and the cash flow of the organization should be presented in the fairly
manner (Flower 2015). The fair presentation of the financial statements, events and
transactions must be fairly reported to the financial report in compliance with the recognition
and measurement values for the components of financial report. The IFRS provides that
entity should prepare the financial statement in compliance with the guidelines of the related
disclosure requirements. To attain the fair presentation the entity must make sure that the
selection and application of the accounting policies should in compliance with the
International Accounting Standard 8. The information that is provided in the financial
statement must contain all the necessary qualitative aspects of the financial statements (Li
2015). A commercial entity is required to provide complete and fair disclosure as per the
rules of the IFRS.

10ACCOUNTING FOR MANAGERS
Financial statements are regarded as the structured representation of the financial
position and financial performance of an organization. An organization is required to present
the financial report with equal prominence as the complete set of financial report. An
organization whose financial report are in agreement with the IFRS standard is required to
make an explicit and unreserved statements of notes (Scott 2015). In virtual circumstances an
organization attains the fair presentation by complying with the applicable standards of IFRS.
The fair presentation also requires an organization to present the financial information by
taking into the considerations the accounting policies in such a way that it provides, relevant,
reliable and understandable information to the users.
The objective of the accounting is to offer information to the users of the financial
statement for the purpose of making decision. There are namely three areas where the users
of financial statement makes decision. The financial statement offers the investors with the
baseline of analysis for and comparison among the financial health of security issuing
instructions (Schaltegger and Burritt 2017). The financial accounting provides assistance to
the creditors in making decision regarding solvency, liquidity and creditworthiness of an
organization. The financial statement are used by the stakeholders in making decisions
regarding the allocation of the scare resources.
The stakeholders of the organization requires financial statement to assist them in
making decisions on what is to be done with the investment. The statement helps the
stakeholders in understanding whether they should hold, sell or buy the stocks more. The
perspective investors requires the financial information to provide access to the organizations
potential for success and generating profits (Wang 2014). Similarly the small business
owners should focus on the financial information in order to ascertain whether the business is
profitable or whether to continue the business, improve or drop it.
Stakeholders are reliant on the financial statement for making decisions regarding the
lending. There are numerous common accounting ratios that are relied upon by the creditors
namely the debt to equity ratio and the times interest earned ratio that are generally derived
from the financial statements (Warren and Jones 2018). Even for the business that are
privately owned that don’t generally follow the guidelines of the FASB no credit lending
institute considers the liability of the huge business loan without obtaining information from
the financial accounting techniques.

11ACCOUNTING FOR MANAGERS
The lenders of the funds namely the banks and the other financial institutions are keen
on obtaining the knowledge regarding the ability of the organization in meeting its debt
obligations upon the maturity of loan. Similar to lenders, the trade creditors and the supplier
are interested in understanding the capability of the organization to pay the obligations as and
when they become payable (Schaltegger and Burritt 2017). They are generally interested in
understanding the capability of the organization regarding its ability to meet the short term
debt obligations.
Stakeholders such as employees are keen on the financial statement to understand the
profitability and stability of the organization. They are generally reliant on the ability of the
organization to pay the salaries and give the employee benefit (Li 2015). The employees are
dependent on the financial position and performance of the organization to determine the
possibility of organization expansion and future growth. Government as the stakeholder are
interested on the organization financial statements for the purpose of taxation and regulatory
requirement purpose. The taxes are determined based on the outcome of the operating profit
and other base of tax. In general the government would like to understand the ability of the
entity as the taxpayer to ascertain the tax dues thereon. Hence, financial statement serves as
the important tool in decision making for several stakeholders.

12ACCOUNTING FOR MANAGERS
Reference list:
Christensen, H.B., Lee, E., Walker, M. and Zeng, C., 2015. Incentives or standards: What
determines accounting quality changes around IFRS adoption?. European Accounting
Review, 24(1), pp.31-61.
Flower, J., 2015. The international integrated reporting council: a story of failure. Critical
Perspectives on Accounting, 27, pp.1-17.
Li, X., 2015. Accounting conservatism and the cost of capital: An international
analysis. Journal of Business Finance & Accounting, 42(5-6), pp.555-582.
Nobes, C., 2014. International Classification of Financial Reporting 3e. Routledge.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues,
concepts and practice. Routledge.
Scott, W.R., 2015. Financial accounting theory (Vol. 2, No. 0, p. 0). Prentice Hall.
Wang, C., 2014. Accounting standards harmonization and financial statement comparability:
Evidence from transnational information transfer. Journal of Accounting Research, 52(4),
pp.955-992.
Warren, C.S. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.