This website uses cookies to ensure you have the best experience. Learn more

Business Accounting Spec Essay

3910 words - 16 pages

Unit 5:

Business Accounting

Unit code:

M/502/5415

QCF Level 3:

BTEC National

Credit value:

10

Guided learning hours: 60
Aim and purpose
The aim of this unit is to enable learners to understand the purpose of accounting, and the associated
processes and its role in the managing of a business. Learners will develop the skills and knowledge needed to
understand financial information.

Unit introduction
Understanding how a business operates and what makes it successful, requires knowledge of the accounting
process. Accounting involves recording business transactions and, this in turn, leads to the generation of financial
information which can be used as the basis ...view middle of the document...

The link between business failure and cash flow problems will be highlighted.
The measurement of an organisation’s financial performance and position requires an understanding of a basic
profit and loss account and balance sheet with this understanding learners can analyse profitability, liquidity and
efficiency of the organisation through the application of ratio analysis. Analysis will always require comparison
of current figures with those from a previous accounting period, or those of a similar business organisation.
Learners will discover how to carry out ratio analysis as well as the meaning and implication of the figures.

Learning outcomes
On completion of this unit a learner should:

1

Understand the purpose of accounting and the categorisation of business income and expenditure

2

Be able to prepare a cash flow forecast

3

Be able to prepare profit and loss accounts and balance sheets

4

Be able to review business performance using simple ratio analysis.

Edexcel BTEC Level 3 Nationals specification in Business
– Issue 2 – June 2010 © Edexcel Limited 2010

1

Unit content
1 Understand the purpose of accounting and the categorisation of business income
and expenditure
Purpose: record transactions; monitor activity; control; management of the business (planning,
monitoring, controlling); measurement of financial performance (gross profit, net profit, value
owed to and by the business)
Capital income: sole traders; partners; shares; loans; mortgages
Revenue income: sales (cash and credit transactions); rent received; commission received
Capital expenditure: fixed assets (land and buildings; office equipment; machinery; furniture and fittings;
motor vehicles); intangibles eg goodwill, patents, trademarks
Revenue expenditure: premises costs eg rent, rates, heating and lighting, insurance; administrative costs
eg telephone charges, postage, printing, stationery; staff costs eg salaries, wages, training, insurance,
pensions; selling and distribution costs eg sales staff salaries, carriage on sales, marketing; finance costs
eg bank charges, loan and mortgage interest; purchase of stock (cash and credit transactions)

2 Be able to prepare a cash flow forecast
Cash flow forecast: structure; timescale; credit periods; receipts (cash sales, debtors, capital, loans, other
income); payments (cash purchases, trade creditors, revenue expenditure, capital expenditure, Value
Added Tax (VAT)); opening and closing cash/bank balances
Cash flow management: problems within the cash flow forecast eg insufficient cash to meet payments
due; solutions eg overdraft arrangements, negotiating terms with creditors, reviewing and rescheduling
capital expenditure

3 Be able to prepare profit and loss accounts and balance sheets
Profit and loss account: purpose and use; trading account and calculation of gross profit (sales, purchases,
opening and closing stocks); calculation of net profit (overheads, other...

Other Essays Like Business Accounting Spec

Comparing The Moral Virtues Of Antony And Julian The Apostate

1103 words - 5 pages Roman emperor Julian the Apostate and Christian leader Antony both exhibited many qualities of character during their existence. Both of them led very distinctive lives although shared several ethical values. Book 25 of “The Later Roman Empire” and the book “Early Christian Lives” show concrete evidence of this. In the following essay, I will argue how both leaders’ lives were devoted to their religious beliefs and their mutual cardinal virtues

Living In A Cashless Society Essay

1637 words - 7 pages question we might ask ourselves is what is a cashless society? What are the implications of living in a cashless world? To begin with, a cashless society could be regarded as a world where all bills and debits are paid for with the use of electronic money such as bank and credit cards, direct debits, and online payment. (Business Defintion for: Cashless Society, 2009). Looking back to history, we could see that our ancestors once lived in a cashless

The French And Indian War: The "Real" First World War

1955 words - 8 pages The Seven Years War, or more commonly referred to as “The French and Indian War”, has been called the true First World War. In this book The French and Indian War: Deciding the Fate of North America, the author and historian Walter R. Borneman paints a detailed and elaborate picture that justifies the claim of it being the first true war of global proportions. If ever there truly was a climax to the never ending feud of the European powers

Is The Use Of Animals In Medical Research A Necessary Measure?

1513 words - 7 pages Throughout history, animals have been used in experiments to test product safety and obtain medical knowledge that benefits both humans and animals alike. Every year there are numerous medical breakthroughs, such as medications and surgical instruments, which are tested on animals to insure their safety before they are deemed acceptable for human use. Even though the results of the experiments saved millions of human lives, they are also

Education And The Evolving Job Market

2363 words - 10 pages The lives of students today are changing. They are preparing for lives and jobs that have never before existed. If teachers hope to have a significant and worthwhile impact on these quickly changing lives, they must change the way they think, prepare, and instruct our future generations. Children cannot afford to have teachers who remain stagnant in their methods and ideals. Students crave instructors that are willing to allow them to tap

Young And Relentless

1737 words - 7 pages different types of alcohol brands and they all love business. They do not care about who is drinking their product, as long as they are receiving profits they could care less who is drinking it. In addition, a Bacardi advertisement includes different types of drinks you can make with their product, making it much easier to entice people to buy their product because it sounds more enticing to the consumer. When an alcohol commercial first starts, the

The Natural Law Theory

1231 words - 5 pages Obeying by the natural law theory is the only true and moral way to live life; especially a life lived in God’s image. God’s presence is a guiding factor to obtaining a moral and virtuous life, which can only be obtained by following the natural law theory. God created a set of laws as a supreme guide for humans to live life, like any law these laws were created to ensure wellbeing for everyone. The laws he created are the civil law, the natural

Resolved: Presidential Signing Statements Threaten To Undermine The Rule Of Law And The Separation Of Powers

1811 words - 8 pages The subject of signing statements has created much debate among the houses of Congress, government officials, and the public alike. These signing statements fall under the categories of constitutional and legislative history signing statements. Constitutional signing statements are those in which the president deems certain provisions of the legislation as unconstitutional, therefore they should not be enforced (Bradley & Posner, 2006

Oppressive Systems Of Government In Egypt And Animal Farm

1529 words - 7 pages As in Egypt, Orwell demonstrates through his allegorical novel “Animal Farm” that leaders are able to establish and maintain power over a people, and in turn create an oppressive and corrupt government system. Orwell shows the significant difference in the education and levels of knowledge in the animals, and how the government takes advantage of this difference. The split between the levels of intelligence is portrayed in the first chapter when

The Pathway To Psychosis

1415 words - 6 pages “How all occasions do inform against me” is a line from act IIII, scene IIII of William Shakespeare’s Hamlet. This line, spoken by Hamlet, expresses his emotional state as he is currently overwhelmed by the death of his father, the king of Denmark, and the situation surrounding it. After Hamlet learns of his father’s death he finds out that his mother has married Claudius, Hamlet’s uncle. On top of all of that, Hamlet soon after

Rated “M” For “More Censorship Not Needed”

1241 words - 5 pages Since the moment video games became a commercial success there have been people who have pushed for unfair amounts of censorship to be placed upon the content of the games and its availability to children. These groups push for increased regulations on content but there is already an appointed group to handle this issue, the ESRB. Even though there has been an increase in mature content in the video game industry, increased censorship is not

Related Papers

Riordan Production Plan Essay

1016 words - 5 pages includes off-spec raw materials. The waste is generated from products, outputs, or spilled materials, and is considered a contribution to water and land pollution. Much of the raw materials do not meet specifications. This issue increases the cost of operation because of additional time, storage, and labor used to return the off-spec material to the relevant vendor or the expense associated with removing the wastes by a local disposal company

Case Mid Sized Pharmaceutical Company Essay

4743 words - 19 pages is the result of poor planning when additions were made to the plant over the years as the company grew. Tyler would like to form several employee teams to implement a better layout of the equipment in the plant. He thinks this would increase plant capacity while reducing costs. When Tyler mentions this idea to some of his supervisors, they remind him that when Jennifer’s father ran the business, Jennifer was in charge of production, and she was

The Separation Of Capital Ownership And Control

1577 words - 7 pages monitoring and asymmetric information. Managers run business on a daily basis and then as a consequence, have a more comprehensive view of the business while owners get information only based on annual reports or data provided by managers. In this case, there is no rational reason to expect managers will act as they promised. By contrast, there is another theory citing that the separation of ownership from control can be efficient, which is

The Versatility And Flexibility Of Oled's

1014 words - 5 pages In April 1, 2002, organic light emitting diodes gain rise in the scientific community with their published, more practical form at Ames Laboratory. “Scientists at the U.S. Department of Energy's Ames Laboratory, in collaboration with scientists at the University of Michigan, Ann Arbor, have developed and demonstrated a novel, fluorescence-based chemical sensor that is more compact, versatile and less expensive than existing technology of its