Accounting principles standards , financial

QUESTION

You have been asked to prepare a memorandum that includes the following.
Production of a 12-month cash budget that makes use of variance analysis to show the impact of the different individual scenarios below:
1. discounting prices by 20 per cent, which in turn increases sales volume per month by 10 per cent
2. increasing the marketing budget by 10 per cent per month, which in turn generates an additional 20 per cent in sales revenue
3. offering suppliers one-month’s trade credit
4. reducing rental/property related costs by 15 per cent per month.
An evaluation of the role that budgets play in the effective planning and control of
resources in an organisation such as your client’s. This will include both benefits and any limitations of using budgets and the extent to which they can help identify problems and corrective actions.
An outline of a range of budgetary control solutions, with justification, to support
organisation decision making and ensure efficient and effective deployment of resources.

 

LO1 Examine the context and purpose of accounting
P1 Examine the purpose of the accounting function within an organisation.
P2 Assess the accounting function within the organisation in the context of regulatory and ethical constraints. M1 Evaluate the context and purpose of the accounting function in meeting organisational,
stakeholder and societal needs and expectations. D1 Critically evaluate the role of accounting in informing decision making to meet organisational, stakeholder and societal needs within complex operating environments.
LO2 Prepare basic financial statements for unincorporated and small business organisations in accordance with accounting principles, conventions and standards
P3 Prepare financial statements from a given trial balance for sole traders, partnerships and not-for profit organisations, to meet accounting principles, conventions and standards.

M2 Produce financial statements from a given trial balance, making appropriate adjustments. LO2 and LO3
D2 Critically evaluate financial statements to assess organisational performance using a range of measures and benchmarks to make justified conclusions.

LO3 Interpret financial statements
P4 Calculate and present financial ratios from a set of final accounts.
P5 Compare the performance of an organisation over time using financial ratios.

M3 Evaluate the performance of an organisation over time, using financial ratios with reference to relevant benchmarks.
LO4 Prepare budgets for planning, control and decision-making using spreadsheets.
P6 Prepare a cash budget from given data for an organisation using a spreadsheet.
P7 Discuss the benefits and limitations of budgets and budgetary planning, and control for an organisation.

M4 Identify corrective actions to problems revealed by budgetary planning and control for effective organisational decision making.

D3 Justify budgetary control solutions and their impact on organisational decision making to ensure efficient and effective deployment of resources.