Accounting principles

Posted: December 2nd, 2013

Accounting principles




Accounting principles

          The document addresses the atypical or contradictory accounting principles that have affected a prominent profit. The company to be analysed is Coca-Cola limited. Coca-Cola Enterprises Inc is the largest producer and distributor of non-alcoholic soft drinks and other beverages in the world. The financials statements of the company in the previous years give an indication of the level of success that Coca Cola has enjoyed as a dominant player in the industry. The company has adopted several accounting principles that differ and provide the company with an added advantage.

Financial statements for Coca Cola Company

       The basic working profits for Coca Cola Company for the financial year 2010 was recorded at $ 21, 887 million while the revenue for the financial year 2011, and it has dropped vaguely to $20, 568 million. This change in the net operating revenue did not have an effect on the gross profit for Coca Cola that displayed an increase to $ 269 million. The financial year of 2010 saw the Coca Cola Company realize a loss but this was turned back and converted into a profit for the financial year ending 2011. The losses accrued within the year 2010 occurred because of the extra indirect expenses sustained by the Coca Cola Company (Weygandt et al, 2012).

The accounting principles set by the finance section of the administration have to be complied by all organizations such as Coca Cola Company. These principles often get amended or revamped regularly. The company opts for an improved accounting package that is incompatible with the accounting principles that previously existed prescribed by the government in a few instances. The companies are forced to abide with the accounting principles that were formulated by the state. The whole of Coca Cola Company is divided into diverse departments. Some of the departments include the secretarial, accounts, production and marketing departments. Every department knows their role in the company and no disorder emerges among the departments. The departments also have proper methods of communication that avoid misunderstandings and conflict among the staff. The communication staffs make sure that all people get information in time to avoid delays in the workplace.

One of the problems in Coca Cola could be the wave of change that happens within the organization. Employees in the organisation are apprehensive and always oppose the changes because very few people prefer to work in completely different environments. In such situations, if the employees choose not to adopt the new changes, they may have to lose their jobs. Introducing change among the employees creates suspicion and mistrust among the employees, as they may be reluctant to embrace change.

Solving this problem will involve Coca Cola introducing the changes in a gradual fashion. The Coca Cola employees should be brought together and briefed on the potential changes that might occur in the job description before the change can be implemented. This will solve the acceptance problem in the short term. The effect of introducing change within a company is that it lowers the productivity and moral of the employees. Hence, Coca Cola Company needs to start by implementing the briefing procedure among the employees before the actual implementation is done (Label, 2010).

The company is obligated by law to comply with the accounting practices that are similar to the accounting practices prescribed by the finance department. The Coca Cola Company accounts departments must work to ensure that the company statement of accounts show correct and fair worth of the operations of Coca Cola Company. The company must also avoid making private transactions and earnings that means that any profits made by Coca Cola should be disclosed to the public and indicated in their financial statements.


Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2012). Accounting principles. Hoboken, N.J: Wiley

Label, W. A. (2010). Accounting for non-accountants: The fast and easy way to learn the basics. Naperville, Ill: Sourcebooks.



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