Question

1.b.You are managing a small business employing four staff members with a turnover greater than $100, 000 per annum. Identify and explain a minimum of four legislative areas that impact on the organisations financial obligations, including GST. Your response should be approximately 200 – 300 words.

1.c. Recommend three strategies a manager could use to disseminate details of the financial plans to their team members.Your response should be approximately 50– 100 words.

1.d. Research and summarise six accounting principles and assumptions. Your response should be approximately 50– 100 words for each principle or assumption.

Answer 1

Identify and explain a minimum of four legislative areas that impact on the organisations financial obligations, including GST.

1. Preparing and submitting annual financial statements - Small business must prepare financial statements according to accounting standards and report them to appropriate authority.
2. Obligations regarding book keeping - Book keeping should be done in every organization.Book keeping can be operated and controlled by accountants who are authorised according to the law and who are members of The Accountant Experts.
3. Paying taxes - Whether company is involved in delivering products or rendering services, proper taxes according to revenues should be paid to the government.
4. Filing Returns - Businesses need to file appropriate income tax returns within the specified time period

1.c. Recommend three strategies a manager could use to disseminate details of the financial plans to their team members.

There can be different strategies according to different usiness structure for financial plans to disseminate. Without efffective communication of financial plans to team members employees may not able to perform their job functions and therefore, would be unable to contribute to company's mission. Three strategies for effective dissemination are:

• Publishing Policy briefs
• Meetings of managers and team members
• Presentations

1.d. Research and summarise six accounting principles and assumptions.

1. Accrual principle -Accrual accounting principle is a method of accounting in which revenue or expenses are recorded on the basis of occurence of trensaction rather than when payment is actually received or made. When properly followed, the accounting principle allows to record all revenue and expense information in an accounting period.
2. Consistency principle - the consistency principle states that once the method of acounting is adopted, it has to be followed consistently throughout the accounting periods. The purpose of this accounting principle is to ensure that transactiosna nd events are recorded in the same manner in all accounting years.
3. Conservatism principle - It is a principle that enables an organization to recognize the expenses and liabilities as soon as possible, in case of uncertainity about the outcome. On the other hand, revenues and incomes are only recognized when they are actually earned.
4. Going concern principle - It is the fundamental principle of acounting. It states that in current and next fiscal years, organization will accomplish its current plans, utilise its existing assets, and continuously meet its financial obligations. In short, it is an assumption that organization will continue its business and value of its assets will endure.
5. Matching principle - This principle requires that company to match its expenses with the revenues to report about company's profitability during a certain period. This principle is based on cause and effect relationship like: sales causes cost of goods sold expense and the sales commission expense.
6. Full disclosure principle - this principle states that business should report all the necessary transactions regarding the financial statement and other material information to the person, authorized to receive. It requires that all the relevant information should be included in the financial statements.