Accounting Report: Decision Makers, Sole Traders & Partnerships

This report provides an overview of accounting practices, focusing on the use of financial information by various decision-makers, including investors, creditors, and managers. It examines the advantages and disadvantages of sole proprietorships and partnerships, highlighting aspects such as profit allocation, accounting standards compliance, fraud detection, and the complexities of managing partner accounts. The report concludes that accounting information is crucial for analyzing a company's financial position and performance. Desklib offers a wide range of study resources, including solved assignments and past papers, to support students in mastering accounting principles and practices.

ACCOUNTING

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUTION..............................................................................................................................1
PART 1............................................................................................................................................1
a) Decision makers and use of financial information..................................................................1
b) Advantages and Disadvantages of Sole Trader and Partnership.............................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUTION
Accounting refers to procedure of recording the financial transactions. Burberry is British
luxury fashion house which is headquartered in the London. It designs & distributes readymade
luxury clothes.
PART 1
a) Decision makers and use of financial information.
Decision makers are the people who use financial information provided by the company
as they have financial interest in it. These decision makers are also known as stakeholders of the
company like owners, managers, investors, creditors, customers, shareholders and many more.
There are different users of financial information who make decisions analysing the financial
information as per their needs and interest in company (Okafor and Akwu, 2017). Investors use
financial information for making investment decisions for getting higher returns.
b) Advantages and Disadvantages of Sole Trader and Partnership
Sole Trader
Advantages
 Allocation of profits is not to be made
 There are no legal requirements to comply for accounting.
 There is not set standards to be followed by the accountant
Disadvantages
 The accounting information may not be reliable.
 It is hard to catch frauds as no fixed format of accounting.
 There is no uniformity in recording the transaction which makes things messy.
Partnership
Advantages
 Accountant is not required to follow accounting standards.
 Allocation of profits and expenses is at agreed ratio.
 No legal compliance regarding maintenance of accounts like in company(Daroń, 2017).
Disadvantages
 Accountant is required to monitor all the accounts of partners separately.
 Distribution of profits and expenses is complex process.
 Accountant is held liable for not detecting frauds.
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CONCLUSION
The accounting information is useful for the decision makers for analysing the financial
position and performance of company.
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REFERENCES
Books and Journals
Okafor, R.G. and Akwu, O.D., COMPARATIVE ANALYSIS OF INCOME TAX BURDEN
ON THE INCOME ARISING FROM INCORPORATED COMPANY AND SOLE
PROPRIETORSHIP BUSINESS IN NIGERIA.
Daroń, M., 2017. A Verification of Advantages and Disadvantages in Partnership
Relations. Zeszyty Naukowe Politechniki Częstochowskiej. Zarządzanie, (27), pp.96-105.
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