Assignment Specifications Purpose: This assignment aims to reinforce and extend students’ knowledge and understanding of key topics in this course (HC1010) including: Overview of Accounting,...

Assignment Specifications Purpose: This assignment aims to reinforce and extend students’ knowledge and understanding of key topics in this course (HC1010) including: Overview of Accounting, Organisational Structure & the Reporting Environment, Statement of Financial Position, Statement of Financial Performance, Cash Flow Statement, Financial Statement Analysis, Accounting for Business Transactions, Cost Concepts & Behaviour, Preparation of Budgets, and Cost-Volume-Profit-Analysis through independent research and application of knowledge and skills. Assignment details: Knowing that you have some accounting experience, your friend David has sought your advice regarding a business that he intends purchasing. The balance sheet for the business shows total assets of $170 000 and total liabilities of $100 000, out of which $40 000 is a bank loan. A review of the business operations show that a considerable portion of the inventory is obsolete stock for which there is limited demand. Further, many of the accounts receivable are overdue by more than 60 days. The accounts receivable and inventory are carried at their gross amount and cost value respectively on the balance sheet. As you are an Accounting student, you have been asked to advise the following:a. Explain to David the form of organisation he can adopt for the business? Briefly discuss the advantages and disadvantages of each form of organisation.b. David has a very limited understanding of the terms Assets and Liabilities. Explain to David the three essential characteristics necessary to consider an item either as an asset or a liability.Resources and links: 1. www.business.gov.au 2. www.business.nsw.gov.au Page 3 of 10 HC1010 Accounting for Business 3. www.business.vic.gov.au 4. www.business.qld.gov.au 5. Textbook: Hancock, P., Robinson, P., and Bazley, M. 2019. Contemporary accounting: a strategic approach for users. Cengage Learning
Documented responses with explanations provided to each of the following 5 questions. Use of appropriate and effective examples to accompany explanations. Report: 16 marks in Total a. Explain to David the form of organisation he can adopt for the business? Briefly discuss the advantages and disadvantages of each form of organisation. 4 marksb. David has a very limited understanding of the terms Assets and Liabilities.Explain to David the three essential characteristics necessary to consider an item either as an asset or a liability. 2 marks