social role and purpose of accounting

  • Familiar with and readily able to access (refer to) and integrate across:
    o The social role and purpose of accounting
    o The accounting equation and how it shapes the financial statements
    o General Purpose Financial Statements
    o Special Purpose Financial Statements
  • Understand how to analyse and interpret financial ratios from GPFS
  • Obtain and contextualize business information for business accounting to explain and apply to business decisions
  • Demonstrate the ability to apply, analyse, synthesis and evaluate information from multiple sources to make decisions about the financial performance of entities including assets, liabilities, owner’s equity, revenue and expenses
  • Apply concepts and theories discussed on a weekly basis
  • Use transaction data and financial statement analysis for data-driven decision making
  • Demonstrate the ability to communicate accounting information writing to a professional standard

Purpose:

This assignment aims to reinforce and extend students’ knowledge and understanding of key topics in this course (HC1010) including: Overview of Accounting, Organisational Structure & the Reporting Environment, Statement of Financial Position, Statement of Financial Performance, Cash Flow Statement, Financial Statement Analysis, Accounting for Business Transactions, Cost Concepts & Behaviour, Preparation of Budgets, and Cost-Volume-Profit-Analysis through independent research and application of knowledge and skills.

Assignment details:

Your friend Tim is from Darwin and he wants to start a business of his own. He is thinking of buying a delicatessen in Sydney. The shop has been there for several years but has not been a great success. Tim does not have sufficient savings and he may have to borrow a large amount of money to finance the purchase.

As you are an accounting student, you have been asked to advise the following:

a. What are the options of the forms of organisation that Tim can adopt for the business? Analyse the advantages and disadvantages of each option for Tim.

b. Will the choice of organisation affect the availability of finance for his business? Explain.

c. How can he raise the required finance? What security do you think he will need to provide?

d. How and what accounting information will assist Tim in making decisions in purchasing the business? What non-financial information should he be requesting?

e. What skills and/or accounting knowledge will he need to manage the business?

Please outline your responses to the above issues and provide your advice and recommendations to Tim in a report.

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