Overview of Samsung's operations, accounting standards and principles.

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Task 1

Samsung

Samsung was found in 1938 by Byung-Chull Lee in Taegu, Korea. The company was first selling dried fish, vegetables and fruits to china. In 1969, Samsung electronics was established. At this time the company mostly made TVs. In 1970 Samsung’s first black and white TV was on sale. As the time passed by, Samsung expanded into making even more things for example refrigerators, washing machines, mobile phones and etc. Due to all the hard work from the beginning until now it has become a global corporation. (bussinessinsider.com, History of Samsung, retrieved 20th June 2015). For more information you can visit their website (http://www.samsung.com/au/aboutsamsung/).

Samsung s policy

According Samsung s policy, if you purchase a product directly from Samsung online store and wish to return it they will be able to refund it or exchange. While in other way if you selected your product in a package for delivery and it has been damaged or unsealed, Samsung will not be able to offer an exchange.

Here is the full Samsung’s policy

  1. 1. If you are an end user customer and wish to return a Product that you have directly purchased from Samsung Online Store, we are happy to offer an exchange or refund, provided that your claim for an exchange or refund is made in accordance with this Change of Mind Policy.
  2. 2.In addition to your rights under the Australian Consumer Law in relation to faulty goods, you may cancel the Contract at any time within fourteen (14) days of purchase, provided that the following requirements are met:
    • 2.1 your claim is to be made within 14 days of purchase from Samsung Online Store;
    • 2.2 you contact the Samsung Customer Care Team on 1300 362 603 option [5] to lodge your request for a 'Change of Mind' return;
    • 2.3 you make the Product available for collection and inspection by a Samsung Authorised Agent;
    • 2.4 the Product is un-used;
    • 2.5 the Product's packaging is un-opened and the packaging seal is intact;
    • 2.6 the Product's packaging is not damaged; and
    • 2.7 The Product is in re-sellable condition.
  3. 3.In the event you change your mind and the Product packaging has been damaged, unsealed, unboxed and/or the Product has been used, Samsung is unable to offer a remedy under this Change of Mind Policy, so please chose carefully when selecting your product, and when deciding to open packaging following delivery.

Should you require product assistance or support due to a failure, please contact our Customer Care Team on 1300 362 603. (Samsung.com, Change of Mind Policy, retrieved 20th June 2015).

IAS1 – This shows all requirements for financial statements, and also how it should be structured, and also sets the minimum requirement of their content, this is appropriate to all general purpose of the financial statement that are found on International Financial Reporting Standards. IAS sets out a manner in which financial statement has to be arranged. (iasplus.com, IAS1 Presentation of Financial Statement, retrieved 20th June 2015).

IAS2- An account for types of inventory is needed. For this standard, inventories are measured at lower cost and net realisable value and it indicates allowable methods of knowing the cost. In some cases it includes weighted average cost and first-in first-out (FIFO). (iasplus.com, IAS2 Inventories, retrieved 20th June 2015).

IAS7- This is known as Statement of Cash Flow, it needs an organization to present the cash flow statement as a part of its main financial statement. These are a few things that cash flow should show, Cash flow should show the operating activities, taxation, returns on investments, servicing of finance, capital expenditure and financial investment. Cash flows is increasing or decreasing in the amount of cash revolving within the business. (isaplus.com, IAS7 Statement of Cash Flows, retrieved 20th June 2015).

IAS16- It usually indicates treatment for several types of Property, Equipment and Plant. Firstly, Property, Equipment and Plant is measured at its original cost, after that it is being measured using cost or revaluation model, it is lowered in value and the lowering value amount is allocated on an organized basis. (iasplus.com, IAS16 Property, Plant and Equipment, retrieved 20th June 2015).

IAS18- Revenue indicates the accounting needs on when to know the revenue from the selling of the goods and providing services, royalties, dividends and services. Revenue is calculated at the fair value of consideration received and represents amounts received for goods and services supplied to customers. (iasplus.com, IAS18 Revenue, retrieved 20th June 2015).

IAS38- This is known as Intangible Assets. It indicates the accounting requirements for non-physical assets, which is without physical substance and distinguishable, either being able to be separated or emerge based on written agreement or other legal rights. An intangible asset is measured at cost, after that it is paid out over time on an organised basis. It will only not be paid out over time if only the asset is unknown. (iasplus.com, IAS38 Intangible Assets, retrieved 20th June 2015).

Task 2

Assess the impact of adjustment to profit or loss account and balance sheet items for limited company

  1. Recognized $750 of accrued interest revenue - It is adjusted by debiting Account receivable and crediting Interest Revenue Account. This will increase the incomes in the profit and loss account, therefore increases the Net income. Account receivables in the balance sheet will also increase, thus increase in current assets.
  2. Recognized $1,500 of deferred service revenue- It is adjusted by debiting unearned service revenue and crediting service revenue account. This will increase the service revenue in the profit and loss account, which will lead to an increase in the total revenues and therefore increase the Net income. It will be deducted from unearned service revenue in the balance sheet, thus decrease the current liabilities.
  3. Recognized $800 of accrued salaries expenses- It is adjusted by crediting accrued salaries expenses and debiting salaries expenses. It will increase the salaries in the profit and loss account which will increase the total expenses and therefore decrease the Net Income. It will be shown in the current liabilities side of the balance sheet, therefore increases the current liabilities.
  4. Recognized $500 of deferred insurance expenses- This is adjusted by crediting prepaid insurance account and debiting insurance expenses. It will increase the operating expenses in the profit and loss account and therefore decrease the Net income. It will also be deducted from the prepaid income in the balance sheet and therefore decreases the current liabilities.
  5. Recognized $725 of deferred supplies expenses- it is adjusted by crediting supplies account and debiting supplies expenses. It will increase the operating expenses in the profit and loss account and therefore decrease the Net income. It will also be deducted from supplies in the balance sheet, thus decreases the current assets.

Task 3

Describe the main users of accounting, their interests and requirements. Discuss how each of the accounting conventions and regulations impacts on financial statements and therefore on the needs of the financial statements.

Consistency

This says that companies are supposed to use the same accounting treatment for same transactions over a period of time. This means that companies should not change accounting methods frequently. They should just use one accounting method for similar transactions. This will make consistency in in the financial information. (myaccountingcourse.com, Consistency Principal, retrieved 20th June 2015)

Going concern

This principle expects that a business will continue to be alive as long enough to carry out its goals and dedication and will not close down in the future. For example, a business’s financial statement is poor and the accountant believes that the company may not be able to operate, and then the accountant is supposed to tell this information. (accountingcoach.com, Going Concern Principal, retrieved 20th June 2015).

Government Accounting Principal

This system is used for tracking government allocations. Government requires the information for different regulatory reasons. The government is focused in the accounting information on account of labour, corporate laws and taxation. The information can be used for framing policies for the improvement of the economy. (ballotpedia.org, Government Accounting Principles, retrieved 20th June 2015).

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