Organizations Quality of Managerial Accounting, Essay Example

This report specifies three learning outcomes of Week 1 to Week 12, evaluating accounting managerial competency and skills. Each learning outcome draws specific evidence from the accounting cases. The goal is to deliver a comprehensive understanding of the nature and quality of reporting while analyzing each organization’s financial position. Learning outcome one investigates the quality of accounting decisions, preparing budgets, and performing capital evaluations. Learning outcome establishes the nature of performance, as well as the social and environmental impact. Learning outcome three explained legal and organization setting offering information on the preparation and application.

Learning Outcome One

Explain the concept of management accounting.

Organizations utilize managerial accounting as a branch of accounting involved in analyzing, measuring, identification, and interpreting, and accounting information utilized in guiding managers to make informed finance decisions. As such, managerial accounting focuses on reporting and decision-making, encouraging accounts to analyze the different events and operational metrics useful in translating data and other helpful information leveraged by the organizational managerial decision-making process. The company operations examine each line of products, operating activity, and facility. Organizational accounting techniques include margin analysis, constrain analysis, inventory valuation, capital budgeting, and product costing. Week 11 features the case of Swanlake Tax Services that assists clients with tax planning. Under the concept of managerial accounting, Swanlake Tax Services facilitates in developing a ledger worksheet, which includes wages, salaries, and supplies.

Apply cost volume profit analysis to make decisions.

Organizations apply CVP analysis to determine and add value to the business while emphasizing fixed costs, targeting profits, breaking points, and determining sales value by placing appropriate revenue estimates. Lee Hee-Young (2017) advises Organizations to adapt CVP to process accurate price decisions, pricing structures, and specifying price structure and CVP analysis. This facilitates appropriate information and maintaining sales at break-even while controlling losses. CVP analysis encourages determining fixed costs, break-even points, processing variable costs, and narrowing on meeting profit requirements. CVP analysis provides an appropriate managerial valuable tool for decision making. There is a relationship between organizational behavior and financial knowledge aimed at improving the performance of the firm.

Prepare budgets to make decisions.

The organization’s budgeting process involves understanding future profitability, creating a reasonable return on resources while placing appropriate uncertainty on the future. The week 5 case of Ryan Landscaping services guide managerial accounts in making journal entries recording all preceding transactions, facilitate preparing trial balances as of March 31, and allows capital account balance.  Organizations plan and choose to deal with the end by default while offering a blueprint on foreseeable events. Formalized managerial plans process quantitative terms providing different levels of management think head meeting stakeholder expectations in budget preparation (Fr?czkiewicz- 2011). The organization can remedy possible poor results, motivating individuals and striving to achieve their goals. The standard variable costs revolve around producing actual costs while evaluating the performance of managers and employees. The planning process embraces managerial assumptions, encouraging appropriate budgeting periods while placing versions based on actual results.

Perform capital investment evaluations

The organization engages a capital investments analysis to facilitate budgeting procedures to explore the organization profitability with a long-term investment. The research on long-term investments comprises fixed assets, suitable equipment, machinery, and real estate. The goal identifies an option of the maximum return on venture capital, offering various techniques for investments and growth (Dmitrieva, 2015). The organization can utilize forecasts on long-term investments, including fixed assets and equipment and real estate. The capital investments identify an option of yielding the highest returns. The proposed models of capital investment analysis include net present value and engage a proper discounted cash flow. Some of the tools that have been used include Net Present Values (NPV). NPV determines how much is expected in revenue from projected cash flow (Cunningham et al. 2021, p. 48). To assess Organizations’ profitability, capital investment building an investment s models while calculating key valuation metrics, identifying appropriate cash flow, net present value, and internal rate of return within a specific payback period.

Accounting Concepts and Managers Decision Making

Adopted concepts and principles often set through a broad of conventions have been devised to provide basic apparatus for financial reporting. Essentially, financial reporting revolves professional judgments by accounting, concepts, and principles adopting policies and practices for accounting. Accounts are actively considering treatments for consistent concepts and principles. Ensuring applications with accounting concepts and principles, standard-setting bodies offer sufficient room for reporting. Organizations’ financial statements utilize reliability, timeliness, relevance, matching ideas, prudence, faithfulness, appropriate measurement concepts, materiality, and understandability. Others include accruals, business entity, realization concepts, duality concepts, historical costs, and verifiability concepts.

These financial principles support inappropriate decision-making since they minimize conflict with accounting concepts and directions while providing financial information that provides a tradeoff between relevance and reliability. Organizations accounting managers ensure appropriate judgment has been considered increasing right relevance towards. The proposed steps establish relevant objectives, classifies and prioritize goals, identifying alternatives, and operate with applicable selection criteria while placing alternative approaches towards decision making (Cunningham et al. 2021). The decision faces a problem in evaluating quality alternatives while specifying the quality process between other options. Greater deliberation and information gathering will enhance collaboration, reduce negative opportunity costs while building a solid organizational focus.

Learning Outcome 2

Organizational Financial Information

Week 5 Taylor Art Supplies integrates perpetual inventory systems, opening the inventory with a value of $2500 and a cash balance of $800. By August 12, the organization made cash sales of $275 to the customer, with an inventory of $160. On August 13, it made a refund of $22 for damaged inventory on 12. The organization’s financial information guided the development of T-accounts and journal entries to the accounts from the workshop. There are business risks that might threaten the future operating financial performance and generate appropriate outcomes within the company’s investments. The organization’s operating and financial performance have gradually influenced various broad economic and industry conditions, leveling consumer spending inflation, interests, and exchange rates while accessing debt and capital markets. Week 6 case of Heat Be Gone also reinforces the need for a perpetual inventory system that records all transactions. The workshop made it possible to record balances in cash and inventory accounts, accounting for an inventory at the end of January. As well, through the inventories, it was possible to calculate the gross business profit.

Organization’s social and environmental impact.

Organizations have environmental and social statements recognizing ecological and social issues while managing risks associated with these issues. Some organizations contribute tax or are in direct business of ecological and social development. Week 5 case of Ryan Landscaping services saw the company engage in an environment business. It incurred supplies of landscaping materials worth $3200. Between March 6-10, it provided landscaping services for the customer with an agreement to pay $2695 in 15 days. On March 31, it paid $1980 in PAYG tax of $280 to employees of March salaries.

Drawing from Ryan landscaping services, the company oversees appropriate adaption of policies that process positively and assists in the community. The company has focused on initiatives that improve business models while offering a high volume of products. The company has had a traditionalist of enhanced packaging requirements and improved customer experience. From the workshop learning, the company increased engagements in contracted waste management improved recycling capabilities. The sustainable awareness and fit-out continue with more sustainable options, inventory, and delivery while reducing packaging wastage (Cunningham et al., 2021). The company recognizes improving the environment and social issues while focusing on critical growth in dynamic business development.

Issues of Ethics and Corporate Governance

The company code of ethics for professional accounts includes and helps in reviewing personal auditing works in management. The organization features capacity for the company to collaborate in economic risks and rewards. Week 2 case of Silencer company single out the product muffler and leaf blowers, guiding the business how to double its profits and sales volume without altering calculations or presenting false figures. A copy of the auditor’s independence and declaration is required under section 307 C of the corporation’s Act 2001. The growing concern of Covid-19 has been factored in in the company code of ethics. The trading activity is challenging, especially near CBD locations, malls, and other shops. The double entry rule in the Week 5 case of Taylor Art supplies presents a situation when the company ethics and corporate governance are rested. As guided in the workshop, the company needs to prepare ledgers first, then a trial balance, then an income state, this filtering any chances of a double-entry rule.

Learning Outcome Three

Legal and organizational setting in which financial information is designed and used

Organizations apply both IFRS and IASB standards in preparing their financial reports. The income statement indicates the profit and loss statements evidenced during the accounting period. As such, the Organizations details the cash flow statement to predict cash movements within a period. In Week 5, Cobbler Company, and Week 6, Munro Pty Ltd, both organizations utilize an adjusted trial balance to begin the income statements. The income statements feature revenues and expense accounts and indicate retained earnings within the dividends trial balance (Khashimov & Eshmamatova, 2021). The balance sheet includes assets, contra assets, stockholder equity accounts, and liabilities while indicating retained earnings for common stock. Furthermore, the organization setting for balance sheets involves accounts receivable, prepaid insurance, equipment accumulated depreciation, salaries payable, unearned law mowing revenue, and common stock.

Record of accounting transactions in worksheets and simple financial reports.

Problem 1: 12-25 Simpson Machine

Simpson makes an Investments

Simpson should not make this investment, as the Net Present Value is slightly above the machine’s residual value in the fifth year. The device costs $9000 but deprecates to a residual value of $750 at the end of the year. The investments have very low returns. The cash payments for the first two years are $150, and on aggregate the business cash receipts of $3300 within the five years.

Problem 2: 12-28 Nelson Purchase of Overhead Conveyor System

Straight Line Depreciation

Maintenance 12,250 x 5 = 61,250

Insurance and Taxes 3500 x 5 = 17500

Total cost = 78,750

74,200 – 78,750 = – 4,550.

Labor Cost 5 years = 105,000 x 5 = 525,000

Equipment Purchasing = 350,000

Book value = – 4,550

Business Value = 170,450

The overhead conveyor system is an acceptable capital expenditure for Nelson, as the organization will have a Gross Profit of 170,450, following the shelving of labor. As well, the business value will grow.

Highest Price

However, the equipment should cost at least $320,000 and not $325,000, this improving the Gross Profit from 170,450 to 195,450.

References List

Cunningham, B. M., Nikkolai, L. A., Bazlley, J. D., Kavanagh, M., & Simmons, S. (2021). Accounting: Information for business decisions. South Melbourne, Vic. : Cengage,

Dmitrieva, A. (2015). Venture capital investments and calculate the expected return on invested capital. Auditor, 0(13), 48-52. DOI: 10.12737/12629

Fr?czkiewicz-Wronka, A., Dyaczy?ska, K., Szymaniec, K., & Kotowski, P. (2011). The Impact and Importance of Stakeholders of the Health Units to the Managerial Decision-Making Process. Economics & Sociology, 4(1a), 148-165. DOI: 10.14254/2071-789x.2011/4-1a/10

Khashimov, B., & Eshmamatova, M. (2021). The information generated by financial accounting and accounting (financial) statements. Asian Journal Of Multidimensional Research (AJMR), 10(2), 30-32. DOI: 10.5958/2278-4853.2021.00049.5

Lee Hee-Young. (2017). A Profit Model Analysis of Abroad Performing Art based on Cost Volume Profit Approach. The Korean Journal Of Dance Studies, 67(5), 121-137. DOI: 10.16877/kjds.67.5.201712.121