Essay on Level 3 Business Unit 6
From: Assistant Accountant
Date: 23rd January 2015
Subject: Describe how legislation and accounting concepts affect an organisation’s accounting policies.
In this report I will be describing how legislation and accounting concepts, could affect a business company’s accounting policies. I will also be talking what Acts contain, concepts and their importance, and also accounting policies. I will be supporting my work with examples.
Legislation is the law that has been made and also enacted by a legal or another government body and it is used to regulate, proscribe and provide.
(Reference: http://en.wikipedia.org/wiki/Legislation accessed on 23/01/2015)
Companies Act 1985 contains important documents. The important …show more content…
Reducing balance method is another method used for depreciation. This method shows that the asset depreciates at a high rate, in the first couple of years after the asset has been bought. The depreciation of the asset reduces after years of being owned.
By using First in First out the products that have been produced or bought first, have to be sold or used first, before any other product. Last in, first out is another management method, where the products that have been made or bought last, must be sold to customers first or used first.
In conclusion I want to say, that it is very important that a business organisation is using accounting policies, concepts and also follows certain acts. If a business does not follow any of these, there could be a problem and the business might not be able to operate.
In this criterion I will be explaining how the financial statements of a limited company are affected by the legal and regulatory framework. I will also be talking about the users of the financial statement and what is their interest towards it.
Financial statement is a record, which shows the transactions coming in and out of the business company as well as any performances from the business company. There are some examples of financial statements. They are