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LEVEL 5 ASSESSMENT SPECIFICATION Student name: Programme: Module:

Student ID number: International Management Accounting AUIM5000

Contribution to Overall Module Assessment (%):

Lecturer:

Zoya Pestovskaya

Internal Verifier:

Assignment Title:

Accounting project

Word count equivalent):

Submission deadline:

Monday, 22 November, 2021

Return date of provisional marks & written feedback:

Submission method:

Alternative submission method (if applicable):

Module code:

50%

Valentina Shevchenko (or

2,000 words

Monday, 13 December, 2021

The essay is required to be sent to the lecturer e-mail and submitted in printed form. A final copy of the essay will then be required to be uploaded onto StopPlagiarism in a word document by the submission deadline. Late submission of the assessment will result in a late penalty mark. Penalties for late submission: Up to one week late, maximum mark of 40%. Over one week late, 0%. Only the Extenuating Circumstances Panel may approve a change to submission dates.

Academic honesty / referencing:

Academic honesty is required. In the main body of your submission you must give credit to authors on whose research and ideas your work is based. Append to your submission a reference list that indicates the books, articles, etc. that you have used, cited or quoted in order to complete this assessment.

Module Learning Outcomes (from module syllabus)

Upon the successful completion of this module, the student should be able to: ● to use the fundamental accounting equation to analyze the effect of business transactions on an organization's accounting records and financial statements ● explain, discuss and apply relevant techniques to aid internal users in decisionmaking

TASK DESCRIPTION In this assignment you should demonstrate your skills and knowledge required for walking through all steps of the accounting cycle and preparing financial statements. You will use the fundamental accounting equation to analyze the effect of business transactions on an organization's accounting records and financial statements. Just remember when performing the task that your analysis should be presented in a way helpful to managers, owners, and employees in their decision-making. To score the highest mark, just follow the plan. The intended marks for question or parts of questions are given in brackets ( ) at the end of each question. Project plan Part 1. Give a detailed answer to the question and justify your opinion. You can use additional sources of literature such as international standards and national legislation in the field of accounting, textbooks, academic journals, organizational documents, etc. Please use the Harvard referencing system (2 points each, total 24). Part 2. Answer following questions about accounting concepts and principles, showing ability to apply the results of statistical research in a subject area to do proposals of enterprise financial analysis tools and methods for internal users of information (0.5 points each, total 9). Part 3. Critical thinking - business decision case. Using data given below, prepare a written report for users (27 points). Part 4. Financial analysis and recommendations for managers. Calculate some financial indicators, analyse and comment results (4 points each, total 24). Part 5. Annual report analysis. After making critical analysis of information given below, answer some questions and justify your opinion (4 points each, total 16). Part 1. Give a detailed answer to the question and justify your opinion. You can use additional sources of literature such as international standards and national legislation in the field of accounting, textbooks, academic journals, organizational documents, etc. Please use the Harvard referencing system. (3 points each, total 36). 1. As you know, accounting has often been called the language of business. In what respects would you agree with this description? How might you argue that this description is deficient? 2. Give an example from your personal life that illustrates your use of accounting information in reaching a decision. 3. Compare balance sheet and income statement? Discuss, on what aspect of a business do they provide information? 4. Identify and explain the causes of increases and decreases in stockholders’ equity. 5. Why Should a Business or Accountant Be Ethical? 6. What do financial statements not tell us? 7. What happens to a business if they don't do any accounting? 8. Do you think this double entry accounting system makes sense? Can you conceive of other possible methods for recording changes in accounts? 9. You have found that the total of the Debits column of the trial balance of Burns Company is $ 200,000, while the total of the Credits column is $ 180,000. What are some possible causes of this difference? If the difference between the columns is divisible by 9, what types of errors are possible? 10. Describe the difference between the cash basis and accrual basis of accounting. 11. “Adjusting entries would not be necessary if the ‘pure’ cash basis of accounting were followed (assuming no mistakes were made in recording cash transactions as they occurred). Under the cash basis,

receipts that are of a revenue nature are considered revenue when received, and expenditures that are of an expense nature are considered expenses when paid. It is the use of the accrual basis of accounting, where an effort is made to match expenses incurred against the revenues they create, that makes adjusting entries necessary.” Do you agree with this statement? Why? 12. Before the Marvin Company issued $ 20,000 of long-term notes (due more than a year from the date of issue) in exchange for a like amount of accounts payable, its current ratio was 2:1 and its acid-test ratio was 1:1. Will this transaction increase, decrease, or have no effect on the current ratio and acid-test ratio? What would be the effect on the equity ratio? Part 2. Answer following questions about accounting concepts and principles, showing ability to apply the results of statistical research in a subject area to do proposals of enterprise financial analysis tools and methods for internal users of information. (1 points each, total 18). 1. Describe a transaction that would: a) Increase both an asset and capital stock. b) Increase both an asset and a liability. c) Increase one asset and decrease another asset. d) Decrease both a liability and an asset. e) Increase both an asset and retained earnings. f) Decrease both an asset and retained earnings. g) Increase a liability and decrease retained earnings. h) Decrease both an asset and retained earnings. 2. Give an example of a journal entry for each of the following: a) Equal growth of an expense and a liability. b) Earning of revenue that was previously recorded as unearned revenue. c) Equal growth of an asset and a revenue. d) Increase in an expense and decrease in an asset. 3. Indicate which of the relationships would be best to judge: a) The short-term debt-paying ability of the firm. b) The overall efficiency of the firm without regard to the sources of assets. c) The return to owners (stockholders) of a corporation. d) The safety of long-term creditors’ interest. e) The safety of preferred stockholders’ dividends. f) How much net income generate on every share of common stock.

Part 3. Financial analysis and recommendations for managers. Calculate some financial indicators, analyse and comment results (5 points each, total 30). The following data are for Spring Company: a) Compute the amount of working capital at both year-end dates. b) Compute the current ratio at both year-end dates. c) Compute the acid-test ratio at both year-end dates. d) Compute the cash flow liquidity ratio at both year-end dates. e) Comment briefly on the company’s short-term financial position. f) What other comparisons and procedures would you use to complete the analysis of the balance sheet? Items

December 31, 2020

December 31, 2019

$72,000

$57,000

Prepaid expenses

34,500

45,000

Accrued liabilities

210,000

186,000

Allowance for uncollectible accounts

Cash in Bank A

1,095,000

975,000

Wages payable

-0-

37,500

714,000

585,000

1,342,500

1,437,000

Bonds payable, due in 2020

615,000

594,000

Marketable securities

217,500

147,000

Notes payable (due in six months)

300,000

195,000

Accounts receivable

907,500

870,000

Cash flow from operating activities

192,000

180,000

Accounts payable Merchandise inventory

Part 4. Annual report analysis. After making critical analysis of information given below, answer some questions and justify your opinion (4 points each, total 16). In The Winter’s recent Annual Report, the following passages appear: The primary key to our success is our 39,000 employees who wear those orange aprons you see in our stores. Few great achievements—in business or in any aspect of life—are reached and sustained without the support and involvement of large numbers of people committed to shared values and goals they deem worthy. Indeed, one need look no further than the business section of the morning newspaper to read of how yet another “blue chip” American business, entrenched in and isolated by its own bureaucracy, has lost the support of its employees and customers… Frankly, the biggest difference between The Winter and our competitors is not the products on our shelves, it is our people and their ability to forge strong bonds of loyalty and trust with our customers… …Contrary to conventional management wisdom, those at the top of organization charts are not the source of all wisdom. Many of our best ideas come from the people who work on the sales floor. We encourage our employees to challenge senior management directives if they feel strongly enough about their dissenting opinions… …We want our people to be themselves and to be bold enough to apply their talents as individuals. Certainly, people can often perceive great risk acting this way. Thus, we go to great lengths to empower our employees to be mavericks, to express differences of opinion without fear of being fired or demoted…We do everything we can to make people feel challenged and inspired at work instead of being threatened and made to feel insecure. An organization can, after all, accomplish more when people work together instead of against each other. Write answers to the following questions: a) Do you think The Winter management regards its employees more as expenses or assets? Explain. b) What does The Winter regard as its most valuable asset? Explain your answer. c) Is The Winter permitted to list its human resources as assets on its balance sheet? Why or why not? d) Could its philosophy regarding its employees be the major factor in its outstanding financial performance? Explain.

GUIDANCE FOR STUDENTS IN THE COMPLETION OF TASKS NOTE: The guidance offered below is linked to the five generic assessment criteria overleaf. 1. Engagement with Literature Skills Your work must be informed and supported by scholarly material that is relevant to and focused on the task(s) set. You should provide evidence that you have accessed an appropriate range of sources, which may be academic, governmental and industrial; these sources may include academic journal articles, textbooks, current news articles, organisational documents, and websites. You should consider the credibility of your sources; academic journals are normally highly credible sources while websites require careful consideration/selection and should be used sparingly. Any sources you use should be current and up-to-date, mostly published within the last five years or so, though seminal/important works in the field may be older. You must provide evidence of your research/own reading throughout your work, using a suitable referencing system, including in-text citations in the main body of your work and a reference list at the end of your work. Guidance specific to this assessment: When carrying out tasks related to compiling accounting entries and all forms of reporting, you should reasonably refer to international standards and national legislation in the field of accounting. Some tasks in this project require your practical knowledge and do not require citing and referencing sources. However, to complete this task, you will have to should show a wide level of reading from sources such as textbooks, academic journals, organisational documents and websites. You are welcome to use these sources: 1. Financial Accounting: https://resources.saylor.org/wwwresources/archived/site/textbooks/Financial %20Accounting.pdf 2. Financial Accounting. Lecture Notes: https://ocw.mit.edu/courses/sloan-school-of-management/15-515financial-accounting-fall-2003/lecture-notes/ 3. Accounting Book: https://corporatefinanceinstitute.com/resources/ebooks/principles-accounting-book-pdf/ 4. Introduction to Financial Accounting: https://business.athabascau.ca/assets/Introduction-to-FinancialAccounting-print-text.pdf 5. Introduction to Accounting: http://www.ddegjust.ac.in/studymaterial/bba/bba-104.pdf 2. Knowledge and Understanding Skills At level 5, you should be able to demonstrate: sound knowledge and critical understanding of the wellestablished concepts and principles of the subject area and the way in which those principles have developed; knowledge of the main methods of enquiry in the discipline. Knowledge relates to the facts, information and skills you have acquired through your learning. You demonstrate your understanding by interpreting the meaning of the facts and information (knowledge). This means that you need to select and include in your work the concepts, techniques, models, theories, etc. appropriate to the task(s) set. You should be able to explain the theories, concepts, etc. meaningfully to show your understanding. Your mark/grade will also depend upon the extent to which you demonstrate your knowledge and understanding. Guidance specific to this assessment: You should be familiar with financial accounting issues specific to the corporate form of organization. Be familiar with balance sheet components and the statement of cash flows. You should demonstrate sound knowledge of double-entry bookkeeping, preparation of balance sheets and profit and loss accounts in accordance with generally accepted accounting principles. You should be able to describe the impact of journal entries on financial statement. 3. Cognitive and Intellectual Skills You should be able to critically analyze information, and propose solutions to problems arising from that analysis, including the critical evaluation of the appropriateness of different approaches to solving problems. Your work must contain evidence of logical, analytical thinking, evaluation and synthesis. For example, to examine and break information down into parts, make inferences, compile, compare and contrast information. This means not just describing what! But also justifying: Why? How? When? Who? Where? At what cost? At all times, you must provide justification/evidence for your arguments and judgments. Evidence that you have reflected upon the ideas of others within the subject area is crucial to you providing a reasoned and informed debate within your work. Furthermore, you should provide evidence that you are able to make sound judgments and convincing arguments using data and concepts,

with an understanding of the limits of knowledge, and how this influences analyses and interpretations. Sound, valid conclusions are necessary and must be derived from the content of your work. Where relevant, alternative solutions and recommendations may be proposed. Guidance specific to this assessment: You should be able to critically analyse and prepare a set of basic financial statements; analyze company annual reports. Explain how financial transactions are processed through the accounting information system each accounting period. 4. Practical Skills At level 5, you should be able to use/deploy a range of established techniques within the discipline, and apply underlying concepts and principles outside the context in which they were first studied, including, where appropriate, the application of those principles in an employment context. You should be able to demonstrate how the subject-related concepts and ideas relate to real world situations and/or a particular context. How do they work in practice? You will deploy models, methods, techniques, and/or theories, in that context, to assess current situations, perhaps to formulate plans or solutions to solve problems, or to create artefacts, some of which may be creative. This is likely to involve, for instance, the use of real world artefacts, examples and cases, the application of a model within an organisation and/or benchmarking one theory or organisation against others based on stated criteria. You should show awareness of the limitations of concepts and theories when applied in particular contexts. Guidance specific to this assessment: You should be able to record financial statement transactions (e.g. invoicing, raising equity, buying inventory, etc.) and apply basic tools for analyzing financial statements. For instance, use debit and credit accounting to record and adjust basic business transactions. You will prepare simple income statements and balance sheets, and statements of retained earnings. Use basic financial statement ratio analysis to evaluate financial performance of the company. Recommendations/proposals should be convincing, persuasive, possibly challenging and derived from evaluation of the evidence. 5. Transferable Skills for Life and Professional Practice Your work must provide evidence of the qualities and transferable skills necessary for employment requiring the exercise of personal responsibility and decision-making. This includes demonstrating: professional development to advance existing skills and acquire new competences that will enable you to assume significant responsibility within organizations; that you can initiate and complete tasks and procedures, whether individually and/or collaboratively; that you can use appropriate media to effectively communicate information, arguments and analysis in a variety of forms to specialist and non-specialist audiences; fluency of expression; clarity and effectiveness in presentation and organization. Work should be coherent and well-structured in presentation and organization. Guidance specific to this assessment: You should demonstrate an ability to independently choose methods and techniques for studying and analyzing financial information; know how to use knowledge to determine the research algorithm and make decisions based on the statistical study of financial processes. You should be able to communicate technical information to both technical and non-technical audiences in writing.

STUDENT FEEDBACK FORM This section details the extent to which the assessment criteria are demonstrated by you, which in turn determines your mark. The marks available for each category of skill are shown. Lecturers will use the space provided to comment on the achievement of the task(s), including those areas in which you have performed well and areas that would benefit from development/improvement. Marks availa ble

Generic Assessment Criteria

Mark s awar ded

1. Engagement with Literature Skills .

10

2. Knowledge and Understanding Skills

20

3. Cognitive and Intellectual Skills

20

4. Practical Application Skills

30

5. Transferable Skills for Life and Profession...