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Level 3 Business Unit 6

In: Business and Management

Submitted By evansboss
Words 4669
Pages 19
P1
From: Assistant Accountant
To: Manager
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 financial statements are Directors’ report, auditors’ report, and duty to prepare operating and financial review, approval and signing of operating and financial review. This statement has to be signed by the board of directors, as well as behalf of the board of directors.
Partnership Act 1890 is another document which contains important documentation. The important documents that have to be in this Act are the name and position of all the partners in the organisation, ratio of profit and loss sharing, the capital that each partner has brought into the business, power of each partner. It is important to know what power each partner has in the business, because some partners might not be able to do activities like their partner.
Accounting concepts
Accounting concepts are the rules in accounting. These rules must be followed by every accountant, whenever they are preparing financial statements or reports. These accounting concepts are important because they provide true and fair view. There are four accounting concepts going concern, consistency, prudence and matching (accruals) concept. Going concern is when financial statements…...

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