A Level Accounting AQA

This subject is broken down into 18 topics in 1 modules:

  1. Accounting Core 18 topics
Study this subject in the Adapt App →
  • 1
    modules
  • 18
    topics
  • 7,083
    words of revision content
  • 55+
    minutes of audio lessons

This page was last modified on 28 September 2024.

A preview of A Level Accounting AQA in the Adapt app

Adapt is a revision planning app with full content coverage and unlimited past paper questions for 1,200+ GCSE and A Level subjects.

Study this subject in the Adapt app →

Accounting

Accounting Core

Introduction to the Role of the Accountant in Business

🤓 Study

📖 Quiz

Play audio lesson

Introduction to the Role of the Accountant in Business

Role of the Accountant

  • An accountant is a professional who prepares and examines financial records, ensuring their accuracy and compliance with laws and regulations.

  • Accountants interpret, classify, analyse, report, and summarise financial data.

  • The primary role of an accountant involves managing financial accounts, budgets, and tax compliance.

  • They play a vital role in advising management on the financial implications of projects, mergers, or business decisions.

  • Accountants perform audits to assess the financial operations of a company and ensure its legitimacy.

Accountants and Business Decisions

  • Accountants aid organisations in financial forecasting and planning. This involves predicting future revenues and expenditure to help plan budgets.

  • Through examining business performance, accountants can suggest ways to reduce costs, enhance revenues and improve profits.

  • They assist in making informed business decisions by presenting financial information in understandable terms to non-financial managers.

  • Performance evaluation is another key aspect; by assessing the profitability and liquidity of a business, accountants can aid in setting objectives and strategic decision making.

Ethical Aspects of Accounting

  • Accountants are expected to follow ethical guidelines, ensuring impartiality, confidentiality, and professionalism in their work.

  • They must maintain independence to avoid conflicts of interest and uphold the integrity of their profession.

  • Part of their role includes preventing and detecting fraudulent activities through the application of sound accounting controls.

  • Addressing sustainability and its financial impacts is increasingly considered part of ethical accounting practices.

The Accountant in Society

  • Accountants provide valuable financial information to stakeholders such as investors, creditors, and regulators, impacting wider society.

  • Regulatory bodies demand that companies publish honest and accurate financial data; accountants play a key role in fulfilling this demand.

  • The work of accountants can provide assurance to the public on the financial health of businesses and the wider economy.

  • Accountants bear a social responsibility to communicate truthful financial information, contributing to a stable economic environment.

Course material for Accounting, module Accounting Core, topic Introduction to the Role of the Accountant in Business

Accounting

Accounting Core

Marginal Costing

🤓 Study

📖 Quiz

Play audio lesson

Marginal Costing

Marginal Costing Overview

  • Marginal Costing is a costing technique, whereby each unit of production is charged with variable costs while the total fixed costs are written off against the total contribution.
  • It is also known as direct, variable, or contribution costing.
  • Marginal costing treats only variable costs as product costs. Fixed costs are treated as period costs and are deducted from the contribution to yield a period profit.

Key Features of Marginal Costing

  • Only variable costs (i.e., costs that change with the level of activity) are charged to a cost unit.
  • Fixed costs are treated as period costs and are deducted from the total contribution in the period they are incurred.
  • Stocks and work-in-progress are valued at marginal cost.

Calculating Marginal Costs

  • Marginal cost is calculated as the change in the total cost that arises when the quantity produced changes by one unit.
  • It is computed by dividing the change in total cost by the change in quantity.
  • The formula to calculate marginal cost is: Marginal Cost = (Change in Costs) / (Change in Quantity)

Applications of Marginal Costing

  • Marginal costing is significant in profit planning, decision-making regarding the selection of product lines, pricing, and cost control.
  • It is helpful in maintaining a consistent pricing policy.
  • It also provides a simplified costing system which minimally distorts inventory valuation.

Limitations of Marginal Costing

  • Over a long period of time, the distinction between variable costs and fixed costs may get blurred, reducing the overall effectiveness.
  • Failing to consider fixed costs in unit costs can lead to overproduction.
  • It is based on linear assumptions about cost behaviour, which can be misleading if not detected.

Course material for Accounting, module Accounting Core, topic Marginal Costing

Can I trust Adapt’s expertise?

Adapt is already used by over 600,000 students and trusted by over 3,000 schools. Our exam-specific content and assessments are meticulously crafted by expert teachers and examiners.

Find out more about the Adapt app →

Planner

An always up-to-date revision timetable.

A personalised, flexible revision timetable that stays up-to-date automatically.

Content

All the exam resources, in one place.

Over 20,000 topics broken down into manageable lessons with teacher-written, exam-specific lessons.

Assessment

Past-paper questions, with instant feedback.

Unlimited past paper questions with instant examiner feedback on how to improve.

Progress

Track progress, together.

Progress tracking to stay motivated, with real-time updates to the Parent Portal.

Download the app today to start revising for free.