Introduction to Accounting: Stakeholders, Costing, and Statements

This report provides an introduction to accounting, focusing on stakeholders, financial statements, and costing methods. The report begins by identifying and describing relevant stakeholders, both internal and external, and explaining how financial statements meet their needs. It then delves into the advantages and disadvantages of absorption and marginal costing, crucial for understanding cost accounting. The report also identifies appropriate costing systems for different types of businesses, such as garages, construction firms, and car manufacturers. The report analyzes the financial reporting of Mark & Spencer, and provides an overview of the uses of IASB standards. The report concludes by summarizing the key concepts discussed throughout the document, providing a valuable resource for students studying accounting.

INTRODUCTION
TO ACCOUNTING

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
A. Identification and description on relevant stakeholders.........................................................1
B Explanation on construction on financial statement meets their needs. .................................2
PART 2............................................................................................................................................2
b. Identification of the costing system of each of the type business listed below as are- ..........3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Accounting is the systematic process in relation to record the financial statements. This is
the process which works as to summarizing, analysis and reporting the relevant information so
that all thing can be done in expertise mode. It is the process of communication about financial
information about business entity to users. The present report will outline the activities of firm
as Mark & Spenser. It is the firm which is engaged in proving clothing stuff to men and women.
In addition to this it will be inclusive of things as are Sever users of IASB, construction on
financial statements and advantage and disadvantage of adsorption and marginal costing.
PART 1
A. Identification and description on relevant stakeholders.
In this there are two kinds of stakeholder to collect the financial information so that they
are able to take better financial decision. Users can be known as stakeholder and these are two
types as are-
External stakeholders- it is inclusive of follows as are-
1. Creditors- They work as to having effective determination of credit worthiness of the
entity. In this the terms of credit are set by the creditors as per the customers financial
statements. The creditors may be inclusive of lenders and suppliers of fiance such as
banks.
2. Tax authorities- They are those who works as to determine the credibility of the taxes
filed on behalf of the enterprises.
3. Investors- they are the person who take the decision in relation to analyses the amount
which is need to be invested in the company. The investor need to sure about the return
on investment.
4. Customers- In order to access the financial position of the suppliers, it is important to
maintain stable source of supply for longer period.
5. Regulatory authorities- In order to ensure companies accounting information as per the
rules and regulations which are set to protect the interest of stakeholders.
Internal stakeholders- This is inclusive as are-
Management – In order to analyze organization performance and takes steps to having
improvement in the firms results.
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Owners- This is helpful in order to analyze the viability and profitability of the
investment and it is helpful in having determination of future course of action.
B Explanation on construction on financial statement meets their needs.
In this it can be said that financial statement is very helpful in relation to make the proper
evaluation in equity decision and help them to make informed about the decision as how to give
their vote on the corporate matters. Under this it states that operating profit margin is one of the
important metric for evaluation of the companies financial management. These as are-
1. Income statement- In this it is stated that income statement is one of the core financial
stamens which reflect the profit and loss of the one specific period. It can be determine
by taking all the revenues and subtracting it from expenses. It is helpful to stakeholder to
the company in relation to have the information about revenue and losses so that they are
able to take proper decisions.
2. Balance sheet- It is the kind of financial statement which is helpful in relation to shows
that what the profitability is earned by the company during the specific period. It shows
firms assets, liability, debs and equity. Thus, the stakeholder can takes the effective
decision.
3. Cash flow statements- it reflects the changes in the balance sheets that how it gets
affected. It works as to breaks the analysis down to operating, investigating and financial
activities. Tit is also useful to the companies' stakeholder din relation to take the better
and effective decision.
4. Statement change in equity- This is the statement which shows reconciliation of the
beginning and ending balance of the firms. It is helpful in order to presenting the
summary and various changes in the retained earning in U.S, GAPP etc.
PART 2
a. Define the advantage and disadvantage of absorption and marginal costing.
Absorption and marginal costing is helpful in relation to determine the systematic
information of companies. These as are-(advantages)
1. Absorption costing- in this all the manufacturing cost of the item is absorbed by the units
produced. The advantage and disadvantage in this relation as are-
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 It is helpful in relation to provide compete information about the profitability of
enterprise.
 Absorption costing is the inclusive of the firms fixes cost operation as are salaries,
facility rentals, utility bills etc.
 It is helpful in determining the need of production in advance for the anticipated
increment in seasonal sales.
Disadvantages as are-
 It is fails to provide analysis on profit and volume as it is done by the variable costing
methods.
 If the fixed cost is major part in the production than it is very difficult to determine the
variation in costs.
 Absorption cost is not effective to determine the potential profitability of differed lines.
Marginal costing- This is referred in which total unit of cost is charged to the variable cost of the
firm are known as marginal costing.
Advantage-
 It is very simple to understand and easy to operate.
 It provides reliable measurement for decision making.
 It shows clear impact in the variation in volume of sales.
Disadvantage-
 In this there cannot have effective division of fixed as well variable cost.
 In this fixed cost remains constant at each level of output and variable cost changes as per
the output.
 In this the tax authorities do not accept the valuation of stock.
b. Identification of the costing system of each of the type business listed below as are-
 A garage specializing in service cars, rents vans and other vehicles- There will be
use of Zero based accounting methods.
 A construction film firm specialized in building offices or house.- there will be use of
contract costing methods.
 Car manufacturing industry produce cars and SUV'S- There will be sue of
operating costing techniques.
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CONCLUSION
Based on the above report it can be concluded that accounting is the method which provided
systematic information. The present report is inclusive of things as are Sever users of IASB,
construction on financial statements and advantage and disadvantage of adsorption and marginal
costing.
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REFERENCES
Book & Journal
Hemmer, T. and Labro, E., 2016. Productions and Operations Management & Management
Accounting.
Weetman, P., 2016. Financial and Management Accounting with MyAccountingLab Access
Card. Pearson/Education.
Lanen, W., 2016. Fundamentals of cost accounting. McGraw-Hill Higher Education.
Hemmer, T. and Labro, E., 2016. Productions and Operations Management & Management
Accounting.
Bennett, M. and James, P. eds., 2017. The Green bottom line: environmental accounting for
management: current practice and future trends. Routledge.
Uyar, A. and Kuzey, C., 2016. Does management accounting mediate the relationship between
cost system design and performance?. Advances in Accounting. 35. pp.170-176.
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