References………………………………………………………………………………..7 1. Executive Summary This report includes some of the basic principles and conventions that must be adhered to while preparing the financial statements. It includes analysis and evaluation of some of the accounting practices and conventions. This report also analyses and evaluates some of the accounting practices in Marks & Spencer Plc. 2.1 Accrual Accounting Accrual concept includes recognition of revenue when earned while expenses are only acknowledged when they are suffered or incurred. This accounting concept needs creation of an extra account that records the variance obtained from the difference between revenue and expenses recognized as well as reception or payments of cash. Accounts receivable is normally used in recording accrued incomes while deferred revenue account is used to record revenue not earned (Banerjee 2005, p. 4-5). On the other hand, accrued expense account is used in recording expenses before payment of cash while deferred expense account is used in recording expenses after paying cash. This type of accounting concept is very expensive and that it is possible for the account to owe taxes on their income even before the cash is received. In marks & Spencer income is recognized when the products are sent to the customers and important risks and title incentives are shifted to the client. The deferred tax is accounted for after calculating it based on anticipated way of realization. The company also has trade receivables account and trade payables (Banerjee 2005, p. 4-5). 2.2 Going Concern Going concern is regarded as one of the most important assumptions in accounting used in preparation of final accounts with an assumption that the business will continue to operate in the next foreseeable future. The company is expected to successfully settle their liabilities after realizing their assets. It is always upon the management of the company to check on the ability of the organization to continue doing business in the coming future. The accounts of Marks & Spencer are prepared in the basis of going concern and the directors are convinced that the company will be able to operate in the next future. The directors are very much concerned that there are no uncertainties that may interfere with the company’s operations in their future (Gibson 2012, p.11-12). The company managed to make a profit of $458 as at March 2013 and positive cash and cash equivalents. The company’s current assets also exceed the current liabilities thus showing an element of going concern. The company is also in a position of paying out her dividends and financing The company will not likely to fail in its operations in the near future considering her statement of financial position and the consolidated income statement (Marks & Spencer 2013, p. 1-3). There are a number of indications of a going concern business which are not reflected in the financial statement of Marks & Spencer. Some of the dangerous signs indicating challenges of going concern are poor liquidity positions, high financial risk and delay in payments as well as serious litigations affecting the company. Marks & Spencer do not also have any indication of defaulting by one of their chief customers that may eventually affect her operations (Gibson
The research includes financial statement analysis of the company’s 2010 accounting period and 2011 accounting period. The financial statements indicate Tesco Plc fared financially well during the 2010 and 2011 accounting periods. Part 1 (a) Chief Executive’s Review Some of the contents of the chief executive officer’s report are useful.
The company offers a huge range of products including food items, general merchandise, accessories, household items, and electrical products. In addition to its core business the company also provides financial services including insurance and retail banking.
In cases where the businesses operations are widely spread, the cash payments and receipts are not made instantly during the time of business transactions. The accrual method of accounting recognizes the fact that the cash receipts and payments would be realized at a future date as the transaction has already happened.
the venturer should recognize in its financial statements the assets that it controls, the liabilities that it incurs, the expenses that it incurs, and its share of income from sale of goods or services by the joint venture. (IAS 31.18). Also International Accounting Standard
The information is not just useful for the capital providers but also to the other user groups such as government, regulatory bodies etc. The next level of conceptual framework is the fundamental concepts i.e. qualitative
ain the difference between the direct and indirect methods, of presenting Operating cash flow section of the Cash Flow Statement, including the layout of each. Task 3 will compare and contrast how Surgutneftgas and Gazprom, as public limited companies, in the same industry for