University Business Management Report: Analysis and Concepts

This report delves into various aspects of business management, commencing with an examination of company structures, contrasting limited companies with sole proprietorships, and exploring the roles of financial and managerial accounting. It then investigates accounting information systems, encompassing data collection, processing, and reporting, alongside risk assessment within a retail business context. The report further addresses accounting principles, such as the duality concept, and concludes with a reflection on learning accounting, emphasizing critical thinking and synthesis of information. The report covers topics such as accounting information systems, risk assessments, and the duality concept. It also provides insights into the practical application of accounting principles within a business context, offering a comprehensive understanding of key concepts and their implications for business operations and financial reporting.

Running head: BUSINESS MANAGEMENT
Business Management
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Table of Contents
Question 1a:.....................................................................................................................................3
Part i:............................................................................................................................................3
Part ii:...........................................................................................................................................3
Part iii:.........................................................................................................................................4
Part iv:..........................................................................................................................................5
Part v:...........................................................................................................................................6
Question 1b:.....................................................................................................................................6
Part i:............................................................................................................................................6
Part ii:...........................................................................................................................................7
Part iii:.........................................................................................................................................8
Part iv:..........................................................................................................................................9
Question 2a:.....................................................................................................................................9
Question 2b:...................................................................................................................................11
Question 2c:...................................................................................................................................11
Question 3a:...................................................................................................................................11
Part a:.........................................................................................................................................11
Parts b and c:..............................................................................................................................12
Part d:.........................................................................................................................................15

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Question 3b:...................................................................................................................................15
References:....................................................................................................................................17

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Question 1a:
Part i:
A limited company is a kind of business structure, which has been enforced into a legally
distinct individual or body. If an organisation decides to run its business as a limited company, it
needs to be legally distinct from the individuals running it, segregating the finances of the
business from those of the personal finances of the owners and ability to sell own assets along
with retaining any profit made after tax (Beatty and Liao 2014).
Limited companies could be classified further into public limited companies and private
limited companies. The public limited companies could obtain funds by issuing shares to the
general public. The trading of shares is made on the stock exchange and a public listed company
should have issued shares with a minimum amount of £50,000 before trading. In UK, the
structure is used mostly by large and established business organisations (Bryer 2016). The
private limited companies are not able to issue shares for the general public. This set-up is used
commonly by the small businesses in UK.
Part ii:
From the legal perspective, a sole proprietorship and its owner share an identity. The
owner would be held personally liable for any debt or liability incurred by the business. The risk
includes the actions of the staffs, which could to lead to liability for the business. Therefore, for
avoiding this unlimited liability, some business organisations prefer forming limited liability
companies. The limited liability companies are deemed to be separate from their owners from the
legal point of view. If a business is registered in the form of limited liability company, its
personal assets are protected normally. Unless the staffs of the business are involved in illegal

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activities or gross negligence, there is limited amount of risk to the capital amount invested
(Callen 2015). Therefore, limited liability companies are more favourable to their owners
compared to their creditors.
Part iii:
Managerial accounting plays a crucial role in running the daily operations of a business.
The information developed by the managerial accountants helps the executives and managers in
undertaking significant decisions associated with all business aspects. The managerial
accountants submit their work directly to the managers as well as other decision-makers within
the organisations and their reports include category segregations and future estimations (Carlon
et al. 2015). They provide the costs of the products and services, performance reports and
budgets of an organisation, which include budget contrast with the actual outcomes.
On the other hand, financial accounting includes delivering financial reports such as
balance sheet statements or income statements to the external parties like a government tax office
and others. The figures reveal objective facts and not previous estimates or future projections and
the independent auditors not involved with the organisation audit the financial statements
(Gassen 2014).
Managerial accountants develop internal operating reports, while the financial
accountants prepare financial statements, which even though distributed internally, have
tremendous significance outside the organisation. This is because the government tax office in
UK would charge the tax rate of 19% on the net income earned by an organisation in a particular
financial year (Marshall 2016).

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Part iv:
In order to become a successful accountant in UK, it is necessary to have a certain set of
skills, which is enumerated briefly as follows:
Innovation:
An accountant needs to have innovative skills, as with the evolvement of the business
world, the accounting requirements change accordingly. Even the recruiters would search for
candidates having fresh ideas for making an influence on the future of the accounting world.
Communication:
The accountants are required to pass complex information in an understandable and
straightforward way. This is because every accountant has to work alongside their colleagues on
all levels irrespective of whether they are hired externally on behalf of the business or part of the
internal accounts team (Henderson et al. 2015).
Initiative:
Initiative denotes that an individual could work independently, as the person is an
individual thinker and in turn, the accountant would be assigned with additional responsibilities
due to creation of trust.
Resilience:
The accountants need to have the capability of working in tight deadlines, meeting the
requirements of the multiple clients and staying positive by dealing with various challenges in
order to ensure long-term success.

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International work experience:
The presence of willingness for including international work experience would add
significantly to the career of an accountant, as numerous commercial businesses are focusing on
their next organisational growth phase and thus, it is associated with foreign trade.
Part v:
Confidentiality includes privileged information, which generally remains undisclosed
shared by a client with an accountant for a particular purpose. The accountants are responsible
for protecting this information with unauthorised public or disclosure. The only exception to
such requirement is the legal obligation for disclosure of such information.
Question 1b:
Part i:
Accounting information system is a method of gathering, storing and processing
accounting and financial data along with preparing informational reports, which could be utilised
by the managers as well as other accounting parties for undertaking business decisions. This
system is used for the following purposes:
 Firstly, accounting information system is effective accumulation and storage of data
concerning the financial activities of an organisation including obtaining transaction data
from source documents, recording transactions through journal entries and posting them
into ledger accounts.

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 Secondly, accounting information system assists in delivering valuable information for
undertaking decisions constituting of preparing financial statements as well as managerial
reports.
 Thirdly, accounting information system assists in ensuring the presence of appropriate
controls for recording and processing data accordingly (Hoskin, Fizzell and Cherry
2014).
Part ii:
Accounting information system involves three stages, which are discussed briefly as
follows:
Collection and processing:
In this stage, the accountants collect and record data from receivables, cash sales, payroll,
payables and cash purchases. In computerised systems, the software program is involved in
processing debits and credits into full information management database. For instance, the sales
manager of an online store has to maintain database, which is filled with daily data like the date
and time of purchase, client locations, their ages, number of orders and others. The most
important aspects that would be looked at include daily sales along with updating the systems
daily.
Reports for management:
In this stage, the accounting personnel are involved in distributing the reports to the
organisational decision-makers. This information is used by the management from the
accounting information system in order to analyse the existing operations as well as financial
condition of the organisation so that future plans and goals could be set. For instance, a balance

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sheet generated from the system could show the management and other stakeholders the current
financial standing of the organisation in the market (Maskell, Baggaley and Grasso 2016).
Accuracy and security:
It is necessary to restrict the number of individuals in accessing the system for
maintaining business data securely. For instance, accountants, bookkeepers or trained clerks need
access for verifying and entering data into the system along with generating reports.
Part iii:
Risk assessment is widely used in various industrial sectors for ascertaining the
probability of loss on an asset, investment or loan. In this case, a small retail business has
decided to purchase a shop rather than renting the same. The risk assessment process is
conducted in the form of a table as follows:
Key risks Impact
Fluctuations in interest rate The rate changes would affect the amount of mortgage
payment and they need to be considered when selecting
variable, fixed or combined mortgage interest rate.
Property market or resale value The owners might benefit owing to the capital gains of
their property; however, this relies on location and
property market state (Nilsson and Stockenstrand
2015).
Investment or economic environment The investment performance of the savvy investors
could be affected negatively due to the macroeconomic

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environment.
Part iv:
In the words of Sangster (2015), spreadsheet could be defined as a software application,
which allows a user in saving, sorting and managing data in a specified form of columns and
rows. For the households, the spreadsheet is beneficial in the following ways:
 The households could edit data into the spreadsheets, if any figure is entered wrongly in
any date.
 The data entered could be converted into graphs, which assists in better visualisation and
accordingly, future planning decisions could be undertaken.
 The households could use the in-built formulas in spreadsheets without having to type
them manually for calculations.
Question 2a:
According to the duality concept, all business transactions need to be recorded in two
different accounts. This concept forms the base of double entry accounting, which the accounting
frameworks need for preparing reliable financial statements (Schipper, Francis and Weil 2017).
This concept is obtained from the accounting equation, which is denoted by the following
formula:
Assets = Capital + Liabilities
This equation seems to be visible in the balance sheet statement, in which the overall
asset amount needs to be identical with the liability amount and capital amount. A part of

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majority of the business transactions would have an effect in few ways on the balance sheet
statement. Therefore, a minimum of a single part of each transaction would include assets,
capital or liability. For instance, when an invoice is issued to a customer, a part of the entry
raises sales, which would occur in the income statement. The entry would be offset by increasing
the amounts of accounts receivable in the current assets section of the balance sheet statement
(Trotman and Carson 2018). Moreover, it would lead to increase in retained earnings, which fall
under the capital section of the balance sheet statement.

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Question 2b:
Question 2c:
Question 3a:
Part a: