The paper “ Analyzing an Income Statement” is a thrilling example of an assignment on finance & accounting. While designing an accounting system that will look into the requirements of the organization and provide an external report to the person who manages it, the following needs to be considered. Scalability: It is important that the accounting system which is designed “ changes as per the changes the business encounter so that the report which we get matches the requirements of the companies and the agencies that need it” . (Siebler, 2010)Relevance: The accounting system should be relevant to the industry and match with the requirement of the agencies so that reports provided are correctReliability: The accounting system should be reliable and the decision taken on the basis of it should be reliable and soundComparability: The system should be such that the results of the companies are being compared to other firms in the same industry. Understandability: The reports generated on the basis of the accounting system used should be easy to understand and results based on it should match the requirementsCost: The accounting system should be such that the cost involved is manageable and the results generated on the basis helps the management to benefit from itThe company needs to provide “ the reports like profit and loss statement, balance sheet and cash flow statement” to the auditor, government agencies, shareholders, taxation department, and people associated with the company. Question 2A.
Groups other than shareholders who have an interest in the activities are suppliers, creditors, government agencies, environment agencies, customers, directors, employees, supermarkets, and any other person associated with the company. This is so because the changes in the policy and profits will have a bearing on people associated with the company. B.
The reason which is leading Woolworths to act in a socially and environmentally responsible manner is as followsWoolworths uses napkins made in China from APP which is harming the environment as it uses trees for the production of napkinsThe timber production unit and the environmentalist in Australia have acted against the company by giving advertisements that Woolworths is looking for profit and not towards the environment and society.
Joseph K, 2010, “Analyzing an income statement: Return on Assets”, about.com guide, The New York Times Company
Joseph K, 2010, “Analyzing an income statement: Inventory Turnover”, about.com guide, The New York Times Company
Kennon J, 2010, “Analyzing an income statement: Gross Profit”, about.com guide, The New York Times Company
Kennon J, 2010, “Analyzing an income statement: Net Profit Margin”, about.com guide, The New York Times Company
Kennon J, 2010, “Analyzing an income statement: Receivable Turnover”, about.com guide, The New York Times Company
Medley P, 2007, “Environment Accounting: What does it mean to professional accountant”, Accounting, Auditing & Accountability Journal, Volume 10, Issue 4, Page 594-600
Siebler W, 2010, “Things to consider before buying accounting software”, ezine articles, retrieved on April 4, 2010, from http://EzineArticles.com/?expert=William_Siebler