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Accounting Planning and control homework help


  • pg 1
									Step 1 of the process is identifying the objectives of the business in
accounting. Objectives tend to be framed in broad terms and, once
established, they are likely to remain enforce for a long period, say,
five or ten years. As we shall see later, a key objective of private-
sector businesses is to increase the wealth of their owners. It is
important, therefore, that we have suitable financial indicators, such as
profit, that can be used to help set the objectives.N Step 2 is
considering the various options available to achieve the objectives of
the business. To achieve the objectives that have been identified, a
number of possible options (strategies) may be available. Each option
must be considered carefully to see how closely it fits with the
objectives that have been set, and to see whether the resources to pursue
the options are available. Financial information should help to quantify
the likely costs and benefits associated with each option in financial
terms. As a result, we should see more clearly whether an option is worth
pursuing with the accounting homework help.N Step 3 involves the
preparation of long-term plans, based on the most appropriate option
available. These long-term plans set out how the business will work
towards the achievement of its objectives over a period of, say, five
years. Financial information should lie at the heart of these plans. It
is important to set out the financing and investment requirements for the
business and the expected levels of sales revenues and expenses over the
planning period. By doing so, the managers will have clear, quantifiable
targets to be achieved.N Step 4 is the development of short-term plans,
within the framework of the long term plans. The business will usually
prepare short-term plans (budgets) covering a period of one year. The
role of budgets is to convert the long-term plans into action able
blueprints for the immediate future. The role of financial information
here is basically the same as in the third step.N Step 5 in the process
involves collecting information on actual performance. However well
planned the activities of the business may be, they will come to nothing
unless steps are taken to achieve them. The process of ensuring that
planned events actually occur is known as control. To exercise control,
there must be a timely flow of information available to managers to help
them compare actual performance with earlier planned performance. As many
aspects of planning will normally be expressed in financial terms,
information regarding actual performance, which is required to exercise
control, should also be couched in financial terms. This will make it
easier for managers to compare differences between planned and actual
performance, and to assess the extent to which plans have been achieved.N
Step 6 is responding to divergences from planned performance with
appropriate action. Where things have not gone according to plan, the
size of the differences between planned and actual performance, expressed
in financial terms, can help managers to set their priorities for action
with accounting homework help.N Step 7 is to revise the plans or budgets,
if necessary. This will involve going through the main steps of the
process once again and so will require the financial information already

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