Unit 5 Business Accounting

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Task 1 (P1) To describe the purpose of accounting for an organisation History Marks and Spencer (referred to as M&S) has come a long way from its humble beginnings as a market stall in 1884, to being one of the UK’s leading retailers. During these 127 years of trading, it went from being a simple market stall, to being registered as a private limited company (ltd) in 1903, to adopting a revolutionary policy of buying goods directly from the manufacturers in 1926, to launching the first ever street petite range for women in 1953, to currently being a public limited company (plc). M&S employs over 75,000 people in the UK and abroad, they have over 600 UK stores and an expanding international business, they’re essentially a UK retailer that exports to 337 stores in 41 territories overseas. As part of their international expansion strategy they will emphasise on franchise operations and build strong partnerships with each territory they wish to expand to, however this does not involve the UK market. M&S supply a range of services such as: loans, insurance, credit cards and home delivery; also sell stylish, high quality clothing and home products as well as amazing food sourced from around 2,000 suppliers. They believe that their success as a business is based on “Great people selling great products” their excellent customer service and high quality products attract more than 21 million people to their stores every week. Purpose of Accounting for M&S In an organisation such as M&S, management have to make decisions in regards to what products they will sell, from which supplier to obtain such products, selling price, the number to be sold and the profits required to ensure that a reasonable return is achieved on its capital employed. Financial and Management accounting techniques provides management with information about the costs and the

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