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Diploma in Business Administration (Diba) BM 321 - Financial Accounting Assignment - 20%

The document discusses a training course for employees of Brave Brands Marketing on understanding financial statements. As part of research to develop the training course, the document addresses: 1) Defining the role of accounting and discussing financial vs management accounting. 2) The purpose and need for financial analysis, even for non-financial managers. 3) What the income statement and balance sheet portray about a business and what each contains. 4) The difference between the cash basis and accrual basis of accounting using an example of prepaid rent. 5) Identifying an element of the accounting equation from its description as a present obligation from a past event requiring future outflow of resources.

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557 views

Diploma in Business Administration (Diba) BM 321 - Financial Accounting Assignment - 20%

The document discusses a training course for employees of Brave Brands Marketing on understanding financial statements. As part of research to develop the training course, the document addresses: 1) Defining the role of accounting and discussing financial vs management accounting. 2) The purpose and need for financial analysis, even for non-financial managers. 3) What the income statement and balance sheet portray about a business and what each contains. 4) The difference between the cash basis and accrual basis of accounting using an example of prepaid rent. 5) Identifying an element of the accounting equation from its description as a present obligation from a past event requiring future outflow of resources.

Uploaded by

ranjinikp
Copyright
© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
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Diploma in Business Administration (DiBA)

BM 321 - Financial Accounting


Assignment 20%
Prepared By: Mr. Vasanthan
Brave Brands Marketing is a well-renowned marketing organisation with a strong
workforce of dedicated employees. However, the CEO has recently identified that
many of his staff members have a poor understanding of financial statements
and difficulty in interpreting financial data as their tertiary education has not
exposed them to such information. As an DiBA graduate and flourishing
marketing manager, you have been asked to do research which will enable you
to answer the following questions in preparation for the training course that you
will perform internally for the company.
1.1 In a brief but comprehensive response, define the role of accounting. (You are
required, amongst others, to address accounting information, users of financial
information, the accounting process and the role of financial accounting vs.
management accounting.)
1.2 You have identified, as a marketer, that at the same time as you are not
directly responsible for preparing financial statements you are certainly required
to perform financial analysis. Discuss the purpose of and need for financial
analysis.
1.3 In general, explain what the statement of comprehensive income (income
statement) and statement of financial position (balance sheet) portray about a
business entity and briefly discuss what is contained in each statement.
1.4 The statement of comprehensive income is said to be prepared (as per IAS 1
of the International Financial Reporting Standards) using the accrual basis
whereas the statement of cash flows is prepared using the cash basis. Briefly
discuss the difference between the cash basis and accrual basis of accounting
using the example of rent of RM 24 000 being paid in advance by Company A for
12 months from 1 September 2012. Company A has a December year end.
1.5 The CEO has described an item in the financial statements of Brave Brands
Marketing as a present obligation, arising from a past event, the settlement of
which is expected to result in an outflow from the enterprise of resources
embodying economic benefits. State what element of the accounting equation
the CEO is referring to and give any example of the said element.

GOOD LUCK

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