Accounting case study Essays

Accounting case study Essays Accounting case study Essay Accounting case study Essay Dear Mr Han I am writing this letter to explain how the profit and loss account and balance sheet that you have received works. I would like to start off by explaining what the purpose of a profit and loss account is. This makes an accurate calculation of the profit or loss made by the business over a certain period of time. Depreciation in the profit and loss account is the loss in value of the assets in the business over a period of time. For example if there is a car or a van in the business the value of the car will depreciate over the years and will not be worth as much when it comes to selling it. The trading account is the basic process of a business. This shows how much profit the organisation makes by this basic business process, not including other costs that the business may incur. Some things that you would find in a trading account are: * Sales receipts for sales for the year * Sales returns amount paid back to customers when items are returned * Purchases for a manufacturing organisation this is the value of raw materials purchased; for a service business it would be the cost of items bought to sell to customers or used to provide a service to customers. The costs of goods sold are calculated by opening stock + purchases purchase returns closing stock. This is shown on my example profit and loss account. Overheads are things like rent and rates and they do not change throughout the year no matter how much they sell, there is also an example on my profit and loss account. Gross profit is calculated by the net sales cost of goods sold. Net profit is calculated by gross profit all other costs that the business incurs. I would like to explain the different kinds of income and expenditure that businesses incur. Expenditure is any money spent on any costs of the business, such as: * Rent * Wages * Petrol Drawings and the cost of fixed assets are not classed as an expense and do not appear in the profit and loss account. Income is the money that the business is earning for example through sales. Capital income is money or value contributed to the business by the owner to get it started or buy equipment. They can receive money through rent received, which is when a business has a property that they rent out to another business, which then gives them income every month, commission received is when the business may sell a product o a service on behalf of another organisation and then they may receive commission for selling the other businesses products or services. This is an explanation on how you know that the accounts balance. Capital + net profit the amount the owner has paid off = less drawings. So net assets and less drawings are the two figures on the accounts that have to be the same for the account to balance. I hope that this letter has helped you figure out how the profit and loss accounts and balance sheet works. Yours sincerely Hannah Clark

Learn About Rational Choice Theory

Learn About Rational Choice Theory Economics plays a huge role in human behavior. That is, people are often motivated by money and the possibility of making a profit, calculating the likely costs and benefits of any action before deciding what to do. This way of thinking is called rational choice theory. Rational choice theory was pioneered by sociologist George Homans, who in 1961 laid the basic framework for exchange theory, which he grounded in hypotheses  drawn from behavioral psychology. During the 1960s and 1970s, other theorists (Blau, Coleman, and Cook) extended and enlarged his framework and helped to develop a more formal model of rational choice. Over the years, rational choice theorists have become increasingly mathematical. Even ​Marxists  have come to see rational choice theory as the basis of a Marxist theory of class and exploitation.​​​ Human Actions Are Calculated and Individualistic Economic theories look at the ways in which the production, distribution, and consumptions of goods and services are organized through money. Rational choice theorists have argued that the same general principles can be used to understand human interactions where time, information, approval, and prestige are the resources being exchanged. According to this theory, individuals are motivated by their personal wants and goals and are driven by personal desires. Since it is not possible for individuals to attain all of the various things that they want, they must make choices related to both their goals and the means for attaining those goals. Individuals must anticipate the outcomes of alternative courses of action and calculate which action will be best for them. In the end, rational individuals choose the course of action that is likely to give them the greatest satisfaction. One key element in rational choice theory is the belief that all action is fundamentally â€Å"rational† in character. This distinguishes it from other forms of theory because it denies the existence of any kinds of action other than the purely rational and calculative. It argues that all social action can be seen as rationally motivated, however much it may appear to be irrational. Also central to all forms of rational choice theory is the assumption that complex social phenomena can be explained in terms of the individual actions that lead to that phenomena. This is called methodological individualism, which holds that the elementary unit of social life is individual human action. Thus, if we want to explain social change and social institutions, we simply need to show how they arise as the result of individual action and interactions. Critiques of Rational Choice Theory Critics have argued that there are several problems with rational choice theory. The first problem with the theory has to do with explaining collective action. That is if individuals simply base their actions on calculations of personal profit, why would they ever choose to do something that will benefit others more than themselves? Rational choice theory does address behaviors that are selfless, altruistic, or philanthropic. Related to the first problem just discussed, the second problem with rational choice theory, according to its critics, has to do with social norms. This theory does not explain why some people seem to accept and follow social norms of behavior that lead them to act in selfless ways or to feel a sense of obligation that overrides their self-interest. The third argument against rational choice theory is that it is too individualistic. According to critics of individualistic theories, they fail to explain and take proper account of the existence of larger social structures. That is, there must be social structures that cannot be reduced to the actions of individuals and therefore have to be explained in different terms.

Sociological Journal Essay Example | Topics and Well Written Essays - 500 words

Sociological Journal - Essay Example After Simpson was found not guilty in his criminal murder trial, a civil trial found him guilty of the same act. This labeled Simpson a murder. Under the Social Bond Theory, Simpson’s bond with society was broken. He was no longer considered just an actor or football player. Simpson was treated like a freak or pariah. This would increase his chances of committing a deviant act in the future. Simpson was put in the position for armed robbery by the civil ruling regarding Simpson to pay the Goldman and Brown family monetarily for their loss of loved ones. This would fall under Access to Illegitimate Opportunities. O.J. Simpson hid most of his assets from the courts. The armed robbery was of things that Simpson claimed were his own. If the Goldmans had not tracked down and taken most of Simpson’s possessions and money, then Simpson would not have had the opportunity to hid his possessions or reclaim them through force. This would also fall under the Differential Association Theory. When hiding his possessions from the Goldmans, Simpson could not hide them in a legitimate place. He had to associate with other criminals. This association could have pushed him into taking back what Simpson believed was his own. This association could have blurred right and wrong in Simpson’s mind. Under the Labeling Theory, the strength of labeling lies within those who are doing the labeling. In this case, the majority of the world followed the first case. Thus the strength of this labeling was strong. The Primary Deviance was Simpson’s involvement in the death of his ex-wife and her friend. The Secondary Deviance was the armed robbery. Simpson’s first crime was indictable, because it involved homicide. The second crime was also indictable, since it was a robbery. Both crimes would be defined as a Street Crime or Conventional Crime, since both were violent. This does go against the societal norm, because of Simpson’s age.