Issues in Measuring Profit and Financial Position (Byte Size)

The measurement of profit and financial position is not as precise and objective as you may, at first, imagine. In order to prepare the profit and loss account and balance sheet, we have to employ estimates and assumptions. As a result, the portrayal of the financial health of a business can vary according to the particular estimates and assumptions that we make. There are three measurement areas that are critical to the measurement of profit and financial position: depreciation, stock valuation and the problem of bad and doubtful debts. In this course we examine each of these areas in turn.

By the end of this course, you should be able to:

• explain the concept of depreciation
• explain the main methods of depreciation and make appropriate calculations
• explain the various approaches to stock valuation and make appropriate calculations
• illustrate how different stock valuation methods impact on the calculation of profit
• explain how a business should account for bad and doubtful debts
• adjust the financial statements to reflect bad debts and changes in the provision for doubtful debts
• discuss the role of subjectivity in the measurement of profit and financial position

Syllabus

Introduction

Objectives

Section 1: Depreciation

1.1 General Principles

1.2 Calculating Depreciation

1.3 Methods of Depreciation

1.4 Accounting Entries

1.5 A Further Refinement

Section 2: Stock Valuation

2.1 The Stock Valuation Problem

2.2 Stock-Valuation Methods

2.3 The 'Lower of Cost or Net Realisable Value' Rule

Section 3: Credit Sales and the Problem of Bad and Doubtful Debts

3.1 Credit Sales and the Problem of Bad and Doubtful Debts

3.2 Dealing with Doubtful Debts

3.3 An Alternative Approach

Summary

Review Activity

Recommended Reading

Tutor-marked Question Paper

Qualifications

On completion of your course, you will receive the dual award:

Award 1 is issued by Stonebridge Associated Colleges: Issues in Measuring Profit and Financial Position (Byte Size) Certificate

Issues in Measuring Profit and Financial Position (Byte Size) Certificate issued by Stonebridge Associated Colleges, to view a sample of the college’s award, please click here.

Requirements for Entry

There is no experience or previous qualifications required for enrolment on this course. It is available to all students, of all academic backgrounds.

Study Options

In order to offer our students the most convenient and flexible distance learning courses, Stonebridge Associated College offers you the option to study for your course via two methods:

• 1. Via the traditional paper-based method.
• 2. Through the online method via ElearnUK.

If you do not have Internet access, or would prefer to study this course via the traditional paper/postal based study method, you can find more information on the course by clicking on the link below.

Stonebridge Prices

Studying by Post. If you would like to pay by instalments, we do offer an affordable interest free payment plan scheme which allows you to spread the cost of your course over a number of months. However, to use this option you will need to study for your course using the traditional paper-based method. For more information on our payment plans please visit our website at www.stonebridge.uk.com

The reason why the course fee is less if you choose to study online, is because with online study there are no costs associated with postage and printing etc. and thus we are able to offer the course at a reduced rate.

The total amount payable over the term's period, is no more than the total cash price of the course.
(APR = 0%). Written quotations are available on request.

Study Hours

This is only an approximate figure and is dependant upon how much time you can dedicate to your studies and how well you grasp the learning concepts in the course material. Furthermore, at the end of each lesson there is a question paper that needs to be completed and returned to your tutor. You should allow at least 1 - 2 hours of study to complete each question paper.

The approximate amount of time required to complete the course is: 20 hrs.