Accounting Fundamentals assignment

Essay by TomasterUniversity, Bachelor's November 2004

download word file, 9 pages 2.6


Business Environment

Question 1:

Briefly describe the main operation (activities) of the company.

The main operation of the company Hallenstein Glasson Holdings Ltd is to sell men and women's clothing.

Question 2:

For whom is the annual report prepared. Provide specific referenced information here from the Statement of Concepts.

The annual report is prepared to provide information for external users such as, providers of resources to such entities for example suppliers, lenders, investors, tax payers or donors;

Representatives of groups such as voters or shareholders, whether the representatives are elected or appointed.

Analysis and members of the media concerned with analyzing and reporting the performance of entities.

Question 3:

Hallenstein Glasson Holding Ltd is a group of companies. Use the financial report to identify 3 companies in the group.

The three companies are:

Hallenstein Bros Limited

Hallenstein Properties Limited

Glassons Limited.

Question 4:

a) What is meant by the accounting term "consolidation"?

Consolidation means combining two or more organizations fund, etc into one.

b) Explain briefly how it will apply with the Hallenstein group of companies.

This will apply with the Hallenstein group of companies because there is more than one company within Hallenstein Glasson Holdings Ltd which means that they have combined all their funds, debts etc into one which is consolidation. So Hallenstein Glasson Holdings Ltd is consolidated.

The Statement of Financial Position:

Question 5:

a) Using group figures for 2003 year, present the accounting equation

Assets = Liabilities + Equity.

$56712 = $13242 + $43470

b) Explain why the accounting equation holds true.

The accounting equation holds true because for every transaction made on the assets side of the equation you must then put the same transaction on the liability/equity side of the accounting equation. So if you purchase some fixed assets...