LO1: Examine the context and purpose of accounting.

Unit Number and Title

Unit 5: Accounting Principles

Academic Term

January – March 2025

Module Leader

Unit Tutors

Student Support Lecturers

Issue Date

WC:- 13/01/2025

Formative Feedback

WC:-10/03/2025

Submission Date

02/04/2024

Submission Format

Essay, Report, Financial statements, Budget

Assignment Title

Accounting in Context and Budgetary Control

Submission Format

The submission format includes an essay, a report, and a budget prepared using a spreadsheet.  The reports should be written in a concise, formal business style using 1.5 lines spacing and Times New Roman font with a font size of 12.  You are required to make use of headings, paragraphs, and subsections as appropriate.

• All work must be supported with research and references using the Harvard referencing system. 
• The recommended word limit is 2,000–2,500 words, although you will not be penalized for exceeding the total word limit.
• Please ensure that the similarity/ AI does not exceed the 20% threshold as assignments with higher similarity may be blocked.

Please use the prescribed Nelson College Cover page (given on the VLE) with your report and follow the normal report structure which includes a table of contents, introduction, main body, conclusion recommendation, and references.

Unit Learning outcomes (LOs)

LO1: Examine the context and purpose of accounting.

LO4: Prepare budgets for planning, control, and decision-making using spreadsheets.

Transferable skills and competencies developed

• Reasoning and analytical skills

• Written communication using a range of media

• Manipulation and interpretation of data using spreadsheets

• Effective communication of relevant information across the organisation and to appropriate stakeholders

• Creation and interpretation of information, showing how that information can be used most effectively to add value to an organisation.

LO1: Examine the context and purpose of accounting.

Vocational scenario

You are invited to a panel discussion organised by the Association of Accounting Technicians (AAT). You are required to prepare a paper discussing the importance of the accounting department as a business function in any organisation.  The discussion should also evaluate the necessity for a regulatory framework for the accounting profession and the impact of this on the stakeholders and users of accounting information. Your essay may cover the points given in para (i), (ii) and (iii) below:    

Assignment activity and guidance:

i. Examine the purpose and scope of the accounting function within different business organisations using appropriate real-life examples. ⁽¹⁾

ii. Assess the accounting function considering regulation and ethical issues that confront accountants and the extent to which these are beneficial constraints to them. ⁽²⁾

iii. You may evaluate the context and purpose of the accounting function in meeting organisational, stakeholder, and societal needs and expectations and critically evaluate the role of the accounting function in informing decision-making and meeting organisational, stakeholder, and societal needs and expectations. 

LO4: Prepare budgets for planning, control, and decision-making using spreadsheets.

Vocational Scenario  

You are employed as Account Assistant at Discount Supermarket Ltd, a medium-sized food retail company.  The company went through a difficult year and management is keen to keep an eye on the company budget going forward.  You are required to prepare cash budget projections for Discount Supermarket for the first half of the financial year- January to June 2025, enabling them to plan how to manage their cash flow effectively.

Assignment activity and guidance:

Discount Supermarket Ltd, has provided the following information on their expected sales, purchases and projected expenses.  Please note that the business pays annual rent of £35,000 on April 1st each year. The Marketing Consultant receives £4500 each month.  The business will purchase a motor vehicle in March 2025 costing £90,000 and corporation tax of £15,000 is due by 30 June 2025.

Requirement:

You are requested to prepare a cash budget for the period from January to June 2025 from the data given in the table above. Prepare a short memo to your supervisor and include:

(i) The six-month cash budget for Discount Supermarket Ltd prepared using a spreadsheet ⁽⁶⁾ that shows expected cash inflow and outflows and monthly balances over the six months i.e., January to June 2025.  Discuss the implication of the budget and advise the client on any possible actions necessary.

(ii) An evaluation of the role that budgets play in the effective planning and control of resources in an organisation. This should include both the benefits and any limitations of using budgets ⁽⁷⁾ and the extent to which they can help identify problems and corrective actions

You may justify the budgetary policy by an outline of a range of budgetary control solutions, with examples, to support organisation decision-making and ensure efficient and effective use of resources.

Assignment Title (part 2)

Production and Interpretation of Financial Statements

Submission Format

The submission is in the form of a report which will include prepared financial statements.  The report must be worded, well-structured, and should be written in a concise, formal business style.  All work must be supported with research and references using the Harvard referencing system. You will need to provide a bibliography using the Harvard Referencing System. Inaccurate use of referencing may lead to issues of plagiarism if not applied correctly.  The recommended word limit is 2,000–2,500 words, although you will not be penalized for exceeding the total word limit.

All students are required to include an assignment cover sheet, which is available on VLE

Unit Learning Outcomes

LO2: Prepare basic financial statements for unincorporated and small businesses, and organisations by accounting principles, conventions, and standards.

LO3: Interpret financial statements.

Transferable skills and competencies developed

• Managing financial data.
• Written communication using a range of media.
• Manipulating and interpreting data using spreadsheets.
• Effective communication of relevant information across the organisation and to appropriate stakeholders.
• Creation and interpretation of information and showing how that information can be used most effectively to add value to the organisation.
• Ability to use quantitative skills to manipulate data, evaluate, estimate, and model business problems.
• Application of accounting knowledge to consistently deliver high-quality, accurate data and information in a timely fashion.

LO2: Prepare basic financial statements for unincorporated and small business organisations in accordance with accounting principles, conventions, and standards.

Vocational Scenario

Abdu Smallah started business as a sole trader with a capital of £2000 which he used to purchase goods for retail. The end of his first year of trading was successful.

In his second year of trading, his brother Rahman joined him as a partner in the business.  They registered as Abdu and Rahman Partnership.  The brothers both invested into the partnership (Abdu £35000 and Rahman (£25000).  They share profits in the ratio 60/40 respectively.  They agreed not to charge interest on their capital.

The Partnership is a member of the Association of Small and Medium-sized Retailers (ASMR).

You are required ⁽³⁾:

1. To prepare the financial statements for Abdu Smallah’s first year of business that ended 31 December 2023, using the trial balance given below.
2. To prepare the financial statements for Abdu and Rahman Partnership for the year ended 31 December 2024 based on the trial balance and notes given.
3. To prepare the financial statements for ASMR Association for the year ended 31 December 2024 based on the trial balance given below.