BTEC Higher National Diploma Unit 5 Accounting Principles

This report delves into the core principles of accounting, exploring its purpose within organizations, evaluating its functions critically, and explaining the main branches of accounting. It examines accounting systems, the role of technology, and the ethical considerations that govern the field. The report uses Brainlabs as a case study to demonstrate the practical application of accounting principles, including financial statements, and budgetary planning. It also covers the importance of maintaining financial records, preparing financial statements, and handling payroll management, as well as the role of accounting in ensuring regulatory compliance and promoting ethical conduct. The inclusion of a cash budget further enhances the understanding of financial forecasting and management. The report provides a comprehensive overview of accounting principles, financial statements, and their practical implications in a business context.

Learner Name ID
Programme Name Pearson BTEC
Higher National
Diploma in Business
Unit Number and Title Unit 5 – Accounting
Principles
Assignment Title
Part 1 Accounting
Principles.
Standards, Financial
Statements and
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Table of Content
Assessment Part 1
1.0 Introduction 3
2.0 An examination of purpose of an accounting function within
an organization 4-6
3.0 A critical evaluation of the accounting function 6-7
4.0 Explanation of main branches of accounting 7-8
5.0 Accounting systems and the role of technology 8-9
6.0 Issues of ethics, regulations and compliance 10-12
7.0 CASH BUDGET 12-13
8.0 Conclusions 13-14
References 14
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Part 1
1.0 Introduction
Write an Introduction to Management Accounting and the
principles of Management Accounting
The report discuss about the accounting principles and standards
which mainly involve the general rules and obligation that required to be
followed and provide direction to the accountant at the time of recording
and proceedings the financial documents. The main goal of accounting
elements is to lead the consistency and equivalence to the financial
documents. Which helps the lenders who provide loan, investor who
invest money, creditors and many more, etc(Appelbaum and Nehmer., 2020).
The systematize group of accounting elements has been provided by the
Financial Accounting Standards Board (FASB). The firm in which it is
selected from this case is Brainslabs it is the data -controlled agency of
marketing, which mainly helps the companies to construct the testing-
control marketing through the assistance of display, CRO and
investigative of London, United Kingdom. This case study is mainly
involves the significance of accounting management and financial
documents and how budgetary plan and estimation assist to forecast
future outcomes and corrective measures which are considered to
accomplish the long-term goals of the firm(Baatwah, Salleh and Stewart., 2019).
2.0 An examination of purpose of an accounting function within
an organization
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The technique of accounting is mainly used for recording the
business proceedings, it executes and knowing the financial data(Barnes
and Enget, 2022). The accounting is function like a large machine in which
the firm provide data as well as raw material and records all of its
companies proceedings, projected task, taxes, etc. In which it discuss
about the true image of the financial position of the firm. There are some
few points which include in accounting, bookkeeping is the first instance
which is also called as accounting cycle. This is the procedure which is
calculated to consider in detail proceedings and through out for uniform
and appropriate financial statements. Both the large and small firms,
private and public, profit or non-profit these type of organizations are
evoked by numbers. For tracing sales revenue, creating payroll and
handling stock, the potential supervisor understand to maintaining
commands on those numbers which is crucial but without concrete
accounting purpose it is close to impossible. Companies selecting a well-
overall function of accounting it required to take different prospects of
accounting apart from the debit and credits.
The important objective for the function of accounting is to maintain the
continuing financial transactions(Bertomeu and et.al., 2021). It also maintain
and ensure all the kinds of monetary details which includes operational
expenditure, capital expenses, salaries, donations, cash flow,
investments, utilities, etc. which should be traceable by each and every
month. The continuous outputs is creating the historic financial of the
firm that can be utilized in various types of ways. It also helps the
supervisors to get understand the wealth and health of financial position
along with the investors who want to invest in the firm.
Some functions of accounting and its main purpose according to the
company Brainlabs which are discussed below:
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 Maintaining financial records: It keep a correct and well record
of daily financial proceedings of the organization Brainlabs. This is
the firm of UK buys, sales, receivables and payable along with the
borrowings which assists the accounting of the company(Boubaker,
Gounopoulos and Rjiba, 2019).
 Close watch of financial proceedings: The accounting function
of the company is useful for the accountant to become a full
relation of payments in respect of the brainlabs firm and the
receivables attained by the organization to check that its receives
the revenue and leaves profitable.
 To prepare the financial statements: It usually prepare the
different kinds of financial statements in which overall accounting
is required. The function of accounting includes readying monthly
information, yearly and quarterly financial documents about the
assets of Brainlabs firm, its internal and external profit and losses
of stakeholders and their borrowings(Bucaro, 2019).
 Handling payroll management: Through the assistance of
accounting, the Brainlabs company can keep a complete or clear
data of staff members welfare fund, staff provident fund, statutory
provident fund, etc. It also create payroll expenses every month,
and provide staff work-based bonuses or bonuses on the basis of
performance and handle staff advantages too.
 Creating the bill payable: The accounting function mainly assists
in ensuring accounts to create confirm that bills which are
appropriately paid off and establishing dates for payments and
paying the bills for the firm which have obligations to pay some
retailers and suppliers on a constant date.
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 To make the budgetary or estimate the financial projected
task: In the Brainlabs company to ensure the future profitable
condition of the organization, there is necessary to ready predicts /
budgets of the firm's financial information(Campra, Esposito and
Lombardi, 2020). Financial projected activity are created to examining
the firm's availability of financial funds, anticipated revenues, future
expenditures, etc. and with the help of this data, the company can
forecast the future business growth and development.
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3.0 A critical evaluation of the accounting function
The function of accounting involves examining, recording,
reporting and evaluating of a firm financial tasks. This role of
accounting mainly help in making to predict budget, income
statement and balance sheet also. It assist in declining the cost,
increasing profits and measure future expenses(Crowther., 2018).
Estimating the function of accounting which is given below:
 Administration of financial data: This accounting function of firm is
mainly assists to manage the daily financial tasks in a relevant
way. The day to day proceeding involves purchase, sales,
receivables and payable.
 Bills payable: This function of accounting mainly assist in handling
the date of payments and retailer payments. It also assist in
creating the staff salaries and workers advantages on time.
 Making financial data: The function of accounting include in
making of financial documents which involves balance sheet and
income statement of the firm. It also assist in keeping the firm's
historical financial information and creating it obtainable for
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projected activity and and audit procedure(de Villiers, Dumay and
Maroun, 2019).
 Obtain company objectives: The main function of accounting is
usually assist in raising firm's objectives by calculating and availing
the financial rules and obligations. It also provide an assistance to
take business related decision, financial strategy and controlling of
firms financial tasks which maximizing profits of the company.
 Examining performance: The function of accounting business is
financially assist in tracing the financial tasks and also evaluate the
financial performance of the business. It give recommendation for
maximizing the efficiency and declining the wastage of funds.
4.0 Explanation of main branches of accounting
In this topic it discuss about same main branches of accounting
function which are discussed below:
Financial accounting: In this part of accounting branch it assists
to maintaining the daily proceedings. The record of transactions
involve income and expenses of the organization(England, Nagel and
Salter, 2020). The structure of accounting transaction are recorded in
a context of financial document which mainly involve trial balance,
income report and balance sheet. It also play a vital role in
examining the financial condition of the business that assists to
provide company related decision.
Cost accounting: The function of accounting branch is mainly
stands for keeping and controlling the expense of firm projected
sections(Finkler, Calabrese and Smith, 2022). It makes an appropriate
structure that provides data about manufacturing expense of the
firm to the obtainable management. It also determining the
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procedure that mainly assists in declining the cost of the
organization. This equipment also assist in using the funds and
examining the final manufacturing expense that helps in evaluating
the budget for the upcoming financial year(Hoitash and Hoitash., 2018).
Managerial accounting: In this type of accounting the task which
gives complete data for the internal framework of the company. It
functioning below the rules and obligations of the financial tasks by
keeping the standard of accounting. After ensuring these points
company is useful in creating the profits and predicting company
which involves planning, organizing, directing and controlling.
Audit the financial documents: This the main branch of
accounting in which it cover both internal and external aspects of
the company. In this task they completed with the help of
examining the financial reports which basically involve the financial
documents of the firm. The auditing function is considering the
person who have good knowledge and efficient and understand
how to execute the task of auditing(Jiambalvo., 2019).
5.0 Accounting systems and the role of technology
This is the particular accounting division of the company in whole
world that cover all the proceedings of the business. These
proceedings involve income and expenses which includes trade
receivable and trade payable.
Purpose of technology in system of accounting:
It consume less time: This Process of accounting that consists
high information of business proceedings. This type of procedure
is very long and consume high time which create an impact on the
performance of accountant. In the current time, technology provide
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an accountant a big relaxation because it assists in completion of
organization work on timely basis(Kang, Park and Han., 2018).
Simple to revise and control: The main technological effect in
the system of accounting is very useful for the business and very
crucial for the accountants. It maximize the overall productivity of
the accountant that assists them to keep the proceedings in a very
simple manner and in a less time. Apart from this it also assists in
revising the proceedings of the company which normally takes few
time to proceed.
It Contribute to another individual: In daily supply chain, the
innovative ideas and technology are maximized that create a
positive impact in both of the companies in whole world and
required population(Maroun., 2019). By examining the firm, the
principles of accounting system are maximized moderately. In the
present world individual contribute and download reports and
important documents in one tab.
Software of accounting: In current time, the technology are
expanded in high stage and it indicates many kinds of software
program. In the area of accounting framework, many kinds of
software are makes that functions in handling the payroll, creating
slips, invoicing and many other. In involve software such as tally
and ERP which basically utilize for recording the daily proceedings
of the company.
6.0 Issues of ethics, regulations and compliance
The word 'ethics' is mainly define for identifying the comparison
between correct and wrong. Somehow, it was correct to discuss
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that ethics is a situational word form one person to another. Which
mainly involves if it is the correct for one individual then it's doesn't
mean that it was the correct for another individual(Muñoz-Izquierdo and
et.al., 2019). Other component of accounting is a act which assists to
keep the rules and obligations of a firm. If any firm or business
utilize some ethics and guidelines in their organization then it
provide consistency in the functioning of operational activity. If
company want to run their business very smoothly then they
required to use several kinds of ethics in their organization which
are including, expanding and maximizing its place in the market, to
increasing the trust of customer and setting up the honesty and
equity in the ruling of the firm which necessary to cover such
components like measuring the nature of accountant and work
accomplishment. They both are the important key factors for the
function of accounting within the firm but there are some two words
in which they consider high impact and arouse the issue for
accountants at the time of executing the task in an entity(Salehi,
DashtBayaz, and Khorashadizadeh, 2018). The brainlabs firm's hire highly
skilled and knowledgeable employees for handling the accounts
appropriately. The brainlabs organization is answerable for
recording the daily proceedings and controlling expenditures. At
the time of executing the task the accountant of a firm which
usually deal with many problems on the basis of ethics and ruled
which are discussed below:
It force to influence the figures: The firm Brainlabs has keep
their principles and condition in the market according to the UK
years but in case of any imbalance in financial or accounting
document of the firm create variations. These variations are
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included because the firm do not want to express its actual
condition to their internal and external investors of the
organization(Salehi, Mahmoudabadi and Adibian., 2018). On that basis firm
create pressure on its accountant to make the good and relevant
books of accounts which mainly indicates the better position of the
company.
Approach to provide data and confidential problems: Each and
every business the accountant of the company maintain the record
of all data confidentially. The UK based company Brainlabs also
share all the details of their important data with their accountant,
but in some cases accountant is fail to keep the data safe and
secret which increase the ethical problems in context of
accountant. It also tends to break the development of the firm and
also reduce the market worth. If the data of the company is leaked
and and come into the hand of some other competitor then its
create big problem for the company(Stárková and Janíčko, 2019).
Conflict of interest: This is the very big problem and simple to
measure. It involve high time and expert to identify it. The
brainlabs firm is also generate this kind of environment which
mainly create an impact on the firm accounts and create high
politics in administration. This kind of environment is simple to
adapt in any firm management but hard to eliminate fully. In this
firm it create and sell its shares in the market in more prices
without understanding their outcomes. The effect originates when
the audit proceeds and the firm don't understand what to say.
Lack of productivity: In this point it explain that it reduce the
productivity of accountant of the company brainlabs and it also
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control the accountant of the organization. It also not providing the
kind of information in that type of work the accountant is expertise.
Impact of greed: It also creating the problem in ethics and ruling
when the accountant of the firm fluctuate the financial proceedings
according to the organization necessity or in some cases it hide
the incorrect transaction of the company. It is one of the biggest
disadvantage of the brainlabs firm because the individual who
influence the entity financial report also answerable for recording
the accounting of Brainlabs daily proceedings.
Paying extra money: The firm Brainlabs is also create an impact
on the business investors and consumers by paying additional
money as a penalty. Because the team of accountants do not
create a relevant and appropriate records of the organization.
7.0 CASH BUDGET
Cash flow: It is the financial report of the company which includes
all the cash based proceedings it may be inflow or outflow of the
organization. The report maintaining all the money incomes and
expenses. It also indicates that how better a firm handle their cash
proceedings. It includes three important factors in the statement of
cash flow such as; Activity of operating, investing and at last
financing.
Particulars January February March April May June July August September October
Receipts
Opening
Balance 8000 16080 -30100 -66050 -116700 -144900 -132540 -175930 -216610 -23313
Sales 66000 44000 49500 44000 55000 66000 44000 49500 71500 4950
Issue of Shares 0 0 2000 0 0 2000 0 0 0
Issue of 0 0 0 0 0 0 0 0 0 250
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