ASSIGNMENT BRIEF

QUALIFICATION UNIT NUMBER AND TITLE

PEARSON BTEC EXTENDED DIPLOMA IN BUSINESS 6. FINANCIAL ACCOUNTING (LEVEL 3)
(QCF)
INTERNAL VERIFIER UNIT TUTOR

DATE ISSUED SUBMISSION DATE RESUBMISSION DATE

Monday,3rd May,2021 Thursday,10th
June 2021

ASSIGNMENT TITLE FINANCIAL ACCOUNTING

LEARNING OUTCOME AND ASSESSMENT CRITERIA

PASS MERIT DISTINCTION
LO1 Know the impact of accounting legislation and concepts on
organizations’ accounting policies and procedures

P1 describe how legislation and M1 compare the final accounts of

accounting concepts affect an D1 justify the application of
two organizations explaining the
organization’s accounting policies accounting conventions and
similarities and differences
regulations to ensure that the
financial statements meet their users’
needs.
LO2 Understand the impact of the regulatory framework on a limited
company’s accounting policies and procedures
P2 explain how a limited company’s
financial statements are influenced
by the legal and regulatory
framework

LO3 Be able to make appropriate adjustments to accounting information

M2 assess the impact of adjustments

P3 make adjustments to a limited to profit and loss account and
company’s financial statements. balance sheet items for a limited
company
LO4 Understand a cash flow statement for a limited company
D2 Evaluate the changes in the
P4 Explain the purpose of a limited financial position of a limited
M3 Assess the importance of the company using a cash flow
company’s cash flow statement.
different elements of a cash flow statement.
statement.

SUBMISSION FORMAT
THE SUBMISSION IS IN THE FORM OF AN ESSAY ; A COMPLETE PORTFOLIO OF FINANCIAL STATEMENTS . Report on
adjustments and a cash flow statement. T HE REPORT SHOULD BE WRITTEN IN A CONCISE , FORMAL BUSINESS STYLE
USING SINGLE SPACING AND FONT STYLE CALIBRI AND SIZE 11. YOU ARE REQUIRED TO MAKE USE OF HEADINGS ,
PARAGRAPHS AND SUBSECTIONS AS APPROPRIATE , AND ALL WORK MUST BE SUPPORTED WITH RESEARCH AND
REFERENCED USING THE HARVARD REFERENCING SYSTEM. PLEASE ALSO PROVIDE A BIBLIOGRAPHY USING THE
HARVARD REFERENCING SYSTEM. THE RECOMMENDED WORD LIMIT IS 3000 WORDS.

THE REPORT SHOULD BE WRITTEN IN A CONCISE , FORMAL BUSINESS STYLE USING SINGLE SPACING AND FONT STYLE
CALIBRI AND SIZE 11. YOU ARE REQUIRED TO MAKE USE OF HEADINGS , PARAGRAPHS AND SUBSECTIONS AS
APPROPRIATE, AND ALL WORK MUST BE SUPPORTED WITH RESEARCH AND REFERENCED USING THE HARVARD
REFERENCING SYSTEM. PLEASE ALSO PROVIDE A BIBLIOGRAPHY USING THE HARVARD REFERENCING SYSTEM.
ASSIGNMENT SCENARIO AND GUIDANCE

SCENARIO 1

Take two companies one company should be sole trader/partnership and the other company should be
limited company .Prepare financial statements for these companies chosen in scenario. Prepare income
statement and balance sheet for both organizations chosen.

SCENARIO 2
You work as the accountant for a client named HARRY and have just taken out the trial balance as at 30
September 2011:

£ DR £ CR
Purchases 1,520,000
Capital as at 01 10 10 402,0
00
Long-term loan 60,000
Sales 2,235,0
00
Marketing expenses 24,000
Inventory as at 01 10 10 74,000
Accounts receivable 84,000
Provision for doubtful debts 1,000
Accounts payable 61,000
Business rates 43,000
Insurances 49,000
Energy costs 57,000
Motor expenses 39,000
Wages and salaries 298,000
Loan interest 3,000
Buildings at cost 500,000
Vehicles at cost 70,000
Vehicle depreciation 01 10 10 30,000
Bank 2,000
Cash 1,000
Drawings 25,000
------------ ---------
---
2,789,000 2,789,0
00
======= =====
==
Notes at 30 September 2011:
• Inventory was valued at £77,000.
• Marketing expenses prepaid amounted to £3,000.
• Salaries owing amounted to £8,000.
• Energy costs owing amounted to £4,000.
• The accountant has reviewed the accounts receivable (debtors) outstanding and advises Mary
to write off £4,000.
• After writing off the bad debt it is suggested that the provision for doubtful debts should be
increased to £3,000.
• The vehicles are to be depreciated by 20% on cost
 SCENERIO 3
The following information is available from the books of Exclusive Ltd. for the year ended 31st March,
2016:
(a) Cash sales for the year were Rs.10,00,000 and sales on account Rs.12,00,000.
(b) Payments on accounts payable for inventory totalled Rs.7,80,000.
(c) Collection against accounts receivable were Rs.7,60,000.
(d) Rent paid in cash Rs.2,20,000, outstanding rent being Rs.20,000.
(e) 4,00,000 Equity shares of Rs.10 par value were issued for Rs.48,00,000.
(f) Equipment was purchased for cash Rs.16,80,000.
(g) Dividend amounting to Rs.10,00,000 was declared, but yet to be paid.
(h) Rs.4,00,000 of dividends declared in the previous year were paid.
(i) An equipment having a book value of Rs.1,60,000 was sold for Rs.2,40,000.
(j) The cash account was increased by Rs.37,20,000.
Prepare a cash flow statement using direct method.

TASK 1 – SCENARIO 1 (LO1: P1) (M1 AND D1)

TO ACHIEVE P1) EXPLAIN ACCOUNTING CONCEPTS: BUSINESS ENTITY; MATERIALITY; GOING CONCERN;
ACCRUALS & PREPAYMENTS (MATCHING); MONEY MEASUREMENT; HISTORICAL COST; DUALITY (DOUBLE-
ENTRY); PRINCIPLES OF REVENUE RECOGNITION, AND LOSS ANTICIPATION.
EXPLAIN THE PROCESS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

TO ACHIEVE M1, COMPARE THE FINAL ACCOUNTS OF TWO ORGANIZATIONS EXPLAINING THE SIMILARITIES
AND DIFFERENCES. TAKE COMPANIES CHOSEN IN SCENARIO 1, PREPARE FINANCIAL STATEMENTS (INCOME
STATEMENT AND CASH FLOW) AND COMPARE THEM.

TO ACHIEVE D1, JUSTIFY THE APPLICATION OF ACCOUNTING CONVENTIONS AND REGULATIONS TO ENSURE
THAT THE FINANCIAL STATEMENTS MEET THEIR USERS’ NEEDS. CRITICALLY EVALUATE THE FINANCIAL
STATEMENTS ACCORDING TO ACCOUNTING RULES AND CONVENTIONS.
TASK 2 – SCENARIO 1 (LO2: P2)

P2) DEFINE AND EXPLAIN THE PURPOSE OF INCOME STATEMENT, BALANCE SHEET ,ANALYSE THESE IN THE
ABOVE EXAMPLES AND HOW THEY VARY DEPENDING UPON THE TYPE OF BUSINESS ORGANISATION CHOSEN
IN SCENARIO 1.

TASK 3 – SCENARIO 2 (LO3: P3) (M2 AND D1)

To Achieve P3) PREPARE FINANCIAL STATEMENTS OF HARRY.

TO ACHIEVE M2, ASSESS THE IMPACT OF ADJUSTMENTS TO PROFIT AND LOSS ACCOUNT AND BALANCE
SHEET ITEMS FOR A LIMITED COMPANY.

TO ACHIEVE D1, APPLY APPROPRIATE AND ACCURATE CALCULATIONS FOR THE CONSTRUCTING OF THE
FINAL ACCOUNTS AND CRITICALLY EVALUATE THE ADJUSTMENTS MADE TO PREPARE THE FINANCIAL
STATEMENTS.

TASK 4 – SCENARIO 3 (LO4: P4) (M3 AND D2)

TO ACHIEVE P4 EXPLAIN THE PURPOSE OF A LIMITED COMPANY’S CASH FLOW STATEMENT.

TO ACHIEVE M3 ASSESS THE IMPORTANCE OF THE DIFFERENT ELEMENTS OF A CASH FLOW STATEMENT IN
SCENERIO 3.PREPARE CASH FLOW STATEMENT ACCORDING TO ACCOUNTING FORMAT.

TO ACHIEVE D2 EVALUATE THE CHANGES IN THE FINANCIAL POSITION OF A LIMITED COMPANY USING A
CASH FLOW STATEMENT IN SCENERIO 3.

EVIDENCE SUMMARY OF EVIDENCE REQUIRED BY STUDENT

CHECKLIST
TASK 1 Essay
TASK 2 Report
TASK 3 Report
TASK 4 Report