Unit 5 P1

Topics: Management, Marketing, Generally Accepted Accounting Principles Pages: 1 (443 words) Published: April 16, 2015
Task 1 (P1)

Describe the purpose of accounting for Marks and Spencer.

Cover:
a) record transactions;
b) monitor activity;
c) control;
d) management of the business (planning, monitoring, controlling); e) measurement of financial performance (gross profit, net profit, value owed to and by the business) N>B> Find out if M+S is making a profit or a loss and find up to date data

a. This is used to record accurate and up to date information and to upkeep the smooth running of the business. The business owner or the bookkeeper must record all of the revenue that goes into the business(from sales and selling) and all of the revenue that leaves the business. If a business doesn’t do this, then it may end up forgetting to pay payments, and may end up getting in trouble with HM and Revenue.. b. Records will be updated on a regular basis, ideally daily, and should then provide a good indication of how the business is doing in terms of sales, receiving payments, and paying expenses etc. The owner would soon realise if money going out seemed to be on the increase as money would drop. Monitoring activity should also involve keeping an eye on the bank balance. c. The ability to control the businesses accounts is linked to the other two purposes I’ve already mentioned. If transactions are recorded accurately, then actions can be taken to control the balance between money flowing in and money flowing out of the business/firm. As an example, if it appeared that expenses were increasing but sales were staying the same, then the owner could look for ways to control or cut costs. d. A manager is the person that is responsible for the planning, running, monitoring and controlling of the resources that they’ve been assigned to control. A manager that clearly understands the businesses accounts will be better able to make informed decisions and plan better for the future. e. Without financial records it would be impossible to know if the business was making profit...
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