Accounting for Decision Making Report: Koala & Kiwi Travel

This report provides an accounting analysis for the Koala and Kiwi Travel and Tours Shop. It begins by examining factors influencing business structure selection, emphasizing the advantages and disadvantages of a sole proprietorship. The report then delves into the nature and types of financial and non-financial information essential for decision-making, along with key accounting systems, such as the double-entry system, and supportive computer programs. It highlights the importance and applicability of accounting assumptions like the business entity, money measurement, going concern, and periodic assumptions. Furthermore, the report explores possible capital expenditure decisions, including office equipment, furniture, and intangible assets. Finally, it discusses planning and budgeting considerations for the business to ensure financial stability and future project funding, concluding with recommendations for improved business operations based on the accounting analysis.

Accounting for decision making

Koala and Kiwi Travel and Tours Shop 1
Contents
Introduction......................................................................................................................................2
Factors that need to consider while selecting the business structure...............................................3
Advantages and disadvantages of sole proprietary..........................................................................3
Advantage....................................................................................................................................3
Disadvantages..............................................................................................................................4
Nature and types of non-financial and financial information..........................................................4
Key accounting and supportive systems..........................................................................................6
Importance and applicability of the accounting assumptions..........................................................6
Possible capital expenditure decisions.............................................................................................7
Planning and budgeting for business...............................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

Koala and Kiwi Travel and Tours Shop 2
Introduction
The report is based on the accounting for the business decision making of the company. These
accounting decisions are based on the scenario that has been selected and the selected scenario is
Koala and Kiwi Travel and tours Shop. Being a newly appointed accounting and finance person
it is the responsibility to decide, determine and to recommend the below-discussed decision.

Koala and Kiwi Travel and Tours Shop 3
Factors that need to consider while selecting the business structure
Selecting a legal structure for the business is one of the most important decisions for Koala and
Kiwi Company. Below given are some of the factors that can affect the decision making of
company related to the business structure.
 Control: - One of the important factors is the control of the business. The legal structure
of the Koala and Kiwi travel and tour shop will affect the business control. The structure
that will suit the company will be sole proprietary in which the whole control of the
business will be in hand of owner.
 Limitation of Liability: - The legal structure will get implemented on the potential legal
liability of the company. It is essential for the business to protect their personal legal
liability. Moreover, the sole proprietorships and general partnership structure do not offer
such kind of asset protection (Costello, 2018).
 Tax implications: - The amount of tax that the company pay will be affected by the
structure of the company (Hanlon, 2015). In this case, the Koala and Kiwi Company can
take the advantage of tax by doing claim on a personal tax return.
There are many other factors such as continuity of existence, on-going administration, flexible
and future needs that can get affected due to the structure of the company.

Koala and Kiwi Travel and Tours Shop 4
Advantages and disadvantages of sole proprietary
Advantage
 A sole proprietor always keeps the complete control and decision making power in their
hand (Chandra, 2011).
 There are no corporate tax payments associated.
 Minimal legal cost to form a sole proprietorship.
 Only limited formal business requirements.
Disadvantages
 All the responsibilities and decisions should be formed by the sole proprietor.
 The owner of the Koala and Kiwi is only liable for all the debts and obligations of the
business.
Nature and types of non-financial and financial information
Financial information
Nature: - The financial information is essential for the business as they make use of the records
in evaluating the financial performance of a business in the form of profitability analysis,
liquidity analysis and the efficiency of management. Moreover, the financial information is in
the form of quantitative.
Types: - There are different types of financial information which the company make use in their
business such as Graphics and Schematics, Accountability accounting documents, equity, cost,
and others.

Koala and Kiwi Travel and Tours Shop 5
a) Graphics and schematics- The koala and Kiwi Company make use of the diagram and
schematic to represent the real picture of the operations of the company.
b) Accountability accounting documents- These documents consist of the balance sheet,
statement of cash flows, income statement and others. The company makes use of the
financial information in all the documents to evaluate the performance of business (Faria,
2017).
c) Equity- Financial information includes the details related to a value of the assets and
liabilities that are owned.
d) Cost- The financial information includes the value of money that the company makes use
to produce and deliver the service.
Non-financial information
Nature: - The nature of the non-financial information can vary as it can be quantitative and
qualitative. The quantitative generally means that the information is in the form of numerical.
These kinds of information are capable of being expressed in the form of numbers or figures
(Cardinaels & van Veen-Dirks, 2010).
Types: - There are different types of non-financial information. The major information includes
the annex of the accounting documents of accountability, details of employees, social
responsibility report and others.
e) Annex of the accounting documents of accountability- This is one type of non-financial
information in which the company gets the non-financial details (Faria, 2017).
a) Details of employees- The details of employees are also important for company and
included in non-financial.

Koala and Kiwi Travel and Tours Shop 6
b) Social responsibility- Social responsibility is a framework and suggests that an entity is
obliged to act for the advantage of society.
According to the analysis, it is suggested to the company to focus majorly on the financial
information data as this helps them in evaluating the performance.
Key accounting and supportive systems
The main accounting system the Koala and Kiwi Travel and tours Shop envisage for operating
the business is double entry. The double entry system is one of the most complicated systems but
it will provide the accurate details (William, 2017). This helps the company in identifying the
errors and performing more accurately.
(Source: Sangster, 2015)
To support the accounting system of Double entry, the company can envisage the use of
computer program to complete the bookkeeping functions. In the computerized system, there is
need of less work for the accountant but need specialization with the software.

Koala and Kiwi Travel and Tours Shop 7
Importance and applicability of the accounting assumptions
Business entity assumption
Considering this assumption, the business is treated as an entity apart from its owners, managers,
creditors, and others. All the transactions are business are recorded in the books of Koala and
Kiwi tour which is one of the significance. Every business has its separate entity this reflects the
applicability.
Money measurement assumption
This assumption reflects that underlines the fact that in accounting for recording event,
happening or transaction is recorded in terms of money. The managers of the business make use
of this information related to the money in their business (Warren & Jones, 2018). Therefore, it
is essential to assume the money measurement for the event.
Going Concern Assumption
According to the assumption, the enterprise is normally viewed as the continuity in the
operations of the business. This assumption is essential as it is applicable in the business and
reflects that business has neither intention nor necessity of liquidation of the business
(Accounting tools, 2018).
Periodic Assumption
According to the period assumption, the life of the business is artificially split into the different
intervals which are known as accounting assumptions. The koala and kiwi company make use of
the assumption while allocating the expenses between revenue and capital in the income and
financial position.

Koala and Kiwi Travel and Tours Shop 8
Possible capital expenditure decisions
Possible Capital expenditure decision that Koala and Kiwi tour and travel shop take are: -
 Purchase of office equipment’s (The office equipment are essential for tour purpose as
they can use while conducting activity)
 Furniture and fixtures purchase (For the tours there is need of a vehicle that can be
purchased by company (Accounting Tools, 2017).
 Amount spend on Intangible assets (purchase of taxi license or patent)
Planning and budgeting for business
The planning and budgeting for Koala and Kiwi Travel and tours Shop.
 I would like to control the finance of business
 The planning will be done to ensure to continue to fund the current commitments.
 Ensuring that all financial decisions are taken confidently to meet the objectives of
company.
 I would like to do planning for enough money for the future projects.

Koala and Kiwi Travel and Tours Shop 9
Conclusion
In the end, it can be concluded that there is need to make many more changes in the current
business operations of Koala and kiwi tour and travel shop. These decisions will help them in
achieving success in the market.

Koala and Kiwi Travel and Tours Shop 10
References
Accounting Tools. (2017). Examples of Capital Expenditure. Retrieved from:
https://www.accountingtools.com/articles/examples-of-capital-expenditures.html
Accounting Tools. (2018). The key accounting assumptions. Retrieved from:
https://www.accountingtools.com/articles/what-are-the-key-accounting-assumptions.html
Cardinaels, E., & van Veen-Dirks, P. M. (2010). Financial versus non-financial information: The
impact of information organization and presentation in a Balanced
Scorecard. Accounting, Organizations and Society, 35(6), 565-578.
Chandra, P. (2011). Financial management. India: Tata McGraw-Hill Education.
Costello, L. (2018). 7 Factors To Consider When Choosing A Legal Structure For Your
Business. Retrieved from: http://www.entrepreneurshipinabox.com/11271/7-factors-
legal-structure-business/
Faria, M. J. D. S. (2017). Types of financial and non-financial information disclosure about
corporate social responsibility. Cadernos EBAPE. BR, 15(SPE), 534-558.
Hanlon, K. (2015). 6 Factors to Consider When Choosing a Business Entity. Retrieved from:
http://www.lucerelegal.com/6-factors-when-choosing-a-business-entity/
Sangster, A. (2015). The genesis of double entry bookkeeping. The Accounting Review, 91(1),
299-315.
Warren, C. S., & Jones, J. (2018). Corporate financial accounting. US: Cengage Learning.

Koala and Kiwi Travel and Tours Shop 11
William, J. (2017). Various Types of Accounting Systems. Retrieved from:
https://bizfluent.com/info-8213727-various-types-accounting-systems.html