School Papers

UNIVERSITY the business. Capital is the main foundation

UNIVERSITY
COLLEGE DUBLIN

 

 

 

 

 

Bachelor of Business Studies (Sri Lanka)

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Financial & Management Accounting
(ACC2002L)

 

Batch 21

Group B

 

Lecturer: Dr. Ming Yen Tan

Submission date: 25/01/2018

Word count:1070

 

 

 

 

 

 

 

 

Assignment title: Assignment 01

                        Student No: 17208667

 

QUESTION 01

Explain the strengths and weaknesses
of Partnership and Limited Company. And provide recommendations with supporting
reasons.

 

Business refers, an economic system or kind of organization
which exchange goods and services with profit or non-profit expectations. There
are kinds of businesses in world. Those are typically different from others,
because of ownership. Partnerships and Limited companies are some of them.

A Partnership is a kind of business type, which two or more
individuals participate and share all liabilities and profits according to the
agreements. Twenty is the maximum limit of partners for the partnership
business and two is the minimum limit.As like all kinds
of business, partnership business also has strengths and weaknesses.

 

Strengths

1)     
Easier
to start and register.

Partnership business can start easier
than others. Only two people can involve and start the business very quickly and
efficiently. And, also partnership businesses can register very easily. It does
not have any separate legal existence or hard effects. And does not take much
money, time and kinds of paper works.

 

2)     
Strong
Capital.

In partnership businesses has strong
capital. Because, there ae many or multiple partners

In the business and they all
contribute assets to the business. Capital is the main foundation of the
business and it’s a very good advantage in here.

 

3)     
Divided
Liabilities.

Every business has liabilities. It
can be debts or losses. Sometimes, it can be contribution for the business
works. Because of there are more than one owner, the liabilities are spread
between them. That is kind of a security for every partners asset in
partnership business.

 

4)     
Successful
decisions can made.

As above said, there are many
partners or individuals in the partnership business. So, these partners have
different ideas and they think differently. In some situation, this is good
thing. Because in business, after all gathering and discussing, they can get
good and effective decisions.

Weaknesses

1)     
Profit
sharing irregularities.

Normally
in partnership business, partners share the profits equally. But sometimes,
partners doesn’t contribute equally. That refers some are not invest equally or
putting assets and fair shares to the business. In like that situation, problem
can appear.

 

2)     
Taxation.

This
is one of the major problem for the partnership businesses. As like any kind of
other businesses, also partnership businesses must pay the tax. According to
the profit sharing and profit which business earning, taxation can be coming negatively.
This taxation process can affect very badly, from different ways.

 

3)     
Disagreements.

Kinds
of partners has kinds of ideas and kinds of attitudes. So, there are some
disagreements can emerge between partners. Disagreements and disputes are not
only harm the business, but also the relationship of those involved.

 

4)     
Less
freedom for takes individual decisions.

There
are many partners in this partnership business and it’s run jointly. For the
management or other business decisions, it is necessary to all partners
agreement to implement for those. Itcan be huge time waste and unnecessary
costs for the particular process.

 

 

A limited Company is a company, which held on it’s entity and
own rights, separate from its owners or shareholders. In some cases, limited
companies can be limited by guarantee or by shares. The former may be further
divided in private companies and public companies. As like all kinds of
business, Limited companies also has strengths and weaknesses.

 

Strengths

1)     
Limited
Liabilities.

In these kind of businesses, basic
advantage is financial security. Company shareholders/owners only liable for
the levels of their investment and no more. This makes the secure and
comfortable feelings about the particular company.

 

2)     
Ownership
and control.

Group of directors are control the
limited companies. The also usually the strong and main shareholders of
thecompany. So, decisions can get quick and easily, without any doubts.

3)     
Separate
Entity.

Limited companies have separate
entities from its owners. Because of that, company always will exist beyond the
lives of its shareholders or members. This is good secure opportunity to the
company employees and all other members.

 

4)     
Employee
shareholders.

This is a special feature of these
kind of businesses. Employees who work to the company, can purchase shares and
become shareholders of the company. This is best way to motivate and encourage
employee automatically for their works. Other-wise, it`s also saving the assets
and valves for the company.

 

Weaknesses

1)     
Cost

There are some costs disbursed to set
up and continue the Limited company. It`s expensive than partnership or other
small businesses.

 

2)     
Dilution
of powers.

In some cause, there are some
disputes will happen between shareholders and company Directors. Everybody wants to correct and confirm their ideas and view. But
directors their ideas and view. But directors must want to do the correct and
necessary things. In that case, these kinds of situations arise.

 

3)     
Complex
Account procedure.

There are hard and complex rules
having for the limited companies, to governing the book-keepings and accounts.
This is very important to the taxations, costing and other financial and
non-financial acts. Also, it`s needful for the necessary parties, like
shareholders, public and government.

 

4)     
Higher
fees.

For some reasons or some necessary
works and for some parties, company must typically pay more fesses than some
other businesses.

 

 

 

 

 

 

 

 

Question 2

Discuss three main
differences between Financial Accounting and Management Accounting.

 

Accounting refers about the process of summarizing,
classifying and recording in financial or monetary terms, the business events
and transactions, interpreting the results. This using to tracking the
financial transaction process in particular business. There are two main
dividend parties in this account. One is financial account and other one is
management account. Those are the main branches in account.

Financial Accounts aims at providing true and faire,
qualitative and quantitative information to the company stakeholders.

Management accounts aims at providing true and faire,
qualitative and quantitative information’s to the managers and other executive
parties.

So, every company, business or firm has those two kinds of
account information and process. But there are some differences between
financial account and management account.

FINANCIAL ACCOUNTING

MANAGEMENT ACCOUNTING

Objective
of this Financial accounting is providing financial information’s to the
outside and other interest parties.In otherwise This refers, presenting all
financial data to the public for understand and get the idea about business.

Objective
of this Management accounting is providing financial information’s to the
management sector of the company. It’s for getting management decisions
correctly and effectively.
 

Time frame of
the financial accounting reports prepared, at the end of the accounting
period of firm or particular company. It usually one year. Also, it can be
six months, nine months or etc.

Time frame of
the management accounting reports prepared at, as per it needs or
requirements of the firm or particular company. There is no constant
accounting time period for management accounts. 

Information
of the financial accounting are monetary information’s. Those are also being
the financial information which are connect to the company records.

Information
of the management accounting are, can be monetary and non-monetary. Also,
that information can be financial or non-financial information’s.

 

 

 

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