Week 1
Discussion
Question Two
Due
Date: Day 4 – Main Forum
Post
your response to the following:
Describe one of the four basic
financial statements, and answer the following questions: Balance Sheet
1. For
what is it typically used? A balance
sheet is typically used to show the balance between incoming and outgoing
items.
2. What
information is the most valuable? The
difference between total assets and total liabilities would most likely be the
most valuable information on this particular financial statements, however all
information on this statement could be considered important.
3. How
does it complement another financial statement?
This statement compliments others by combining information from the
Income statements, statement of owner equity, and statement of cash flows.
Also,
respond to a classmate who selected a different financial statement from
yours. How do the financial statements tie into one another?
For this
question, I chose a balance sheet.
Balance sheets are probably the report I am most familiar with having
used it for my personal life on a regular basis. A balance sheet is typically used to show the
balance between incoming and outgoing items. It is a great way to keep track of whether you
have too many bills, or an overabundance of cash. This is important so you can tell at a glance
when you can afford that high expense item or whether you are spending too
much. The difference between total assets
and total liabilities would most likely be the most valuable information on
this particular financial statements, however all information on this statement
could be considered important. This
statement compliments others by combining information from the other three
types of financial statements: Income
statements, statement of owner equity, and statement of cash flows. This statement takes information from each of
the other three and combines them in order to review them together on one
sheet.
Week 3
1.
Discussion
Question 1
·
What is the difference between cash basis and
accrual basis accounting? Why do accrual-basis financial statements provide
more useful information than cash-basis financial statements? Describe when each method (cash basis and accrual
basis accounting) would be appropriate to use.
There is
one major difference between cash basis accounting and accrual basis
accounting. Cash basis accounting
requires that all revenues are recorded when cash is received and expenses when
cash is paid. Accrual basis accounting
requires that revenues are recorded when earned and then matched to expenses
during the adjustment process. Accrual
basis accounting has the advantage of recording a true account of each months
expenses and revenues such as a payment that is made for several months is
recorded on each month the payment is covered for the part of the payment that
month covers. An example would be a
company’s lawyer. Big companies and some
small ones that could afford to keep an attorney on retainer would pay stipends
to a lawyer in order to keep that lawyer on call for several months just in
case they would need to call on their services.
The stipend on a cash basis accounting report would report the payment
in the month it was paid regardless of how many months it covers. Accrual basis accounting would have the
payment separated into the monthly charges and recorded in each month for that
charge instead of the entire payment.
Cash basis
accounting would be more appropriate to use when you need to know exactly how
much cash you have each month over a certain period of time. Accrual basis accounting would be more
appropriate when you need to know how many expenses are applied for each month
over a certain period of time.
1.
Discussion
Question 2
·
The Ritz Manor is a popular seaside resort. A double room costs
$220 for one night. To reserve a room, guests must pay one night’s stay in
advance. On each floor of the hotel, Vendalite Company operates vending
machines with energy bars, juices, and other snacks for guests. Vendalite
stocks the machines and collects revenue every week. Total average weekly
revenue from these machines is $720. The Ritz Manor is entitled to 30% of the
revenue from the machines. Vendalite sends a check to the Ritz Manor once at
the end of each quarter for the resort’s share of the revenue.
- Based on this
information, what type of adjusting entries does the Ritz Manor have?
- How are the
amounts of these adjustments determined?
- Which accounts
are affected?
Ritz Manor
would record each payment for the guest night stay as a cash entry and a
revenue entry in the amount of $220 per day.
This is an example of how to handle unearned revenue. Each month Ritz Manor would need to make an
accounts receivable entry for the monthly revenue from Vendalite and revenue
entry, this is an example of accrued revenues.
Each quarter a cash entry would be made along with a decreased
adjustment in the accounts receivable entries when the check arrives. The monthly accounts receivable entry would
be the total average monthly revenue times thirty percent. This amount is roughly $1296 every month.
These
entries would affect several accounts, cash account, accounts receivable
account, and the revenue account.
Week 5
1.
Discussion Question 2
·
Read the BTN5-3 Ethics Challenge on p. 218 of Fundamental Accounting Principles. Discuss
the ethics of what Amy is doing. Are there any consequences to her actions? How
does the store account for Amy’s returns?
Consequences
are, in my opinion, dependant on your point of view. From Amy’s point of view there seems to be
little consequences except betraying herself and her own ethics. If she buys the suits from the same store
each time, she may get a reputation by the store as someone who they do not
want to sell to because they would know her as a customer who returns what is
bought more frequently than keeping. If
she used several stores, she might get that reputation from several stores
depending on how often she bought them and how many times she visited
each.
From the
store’s point of view the sales from each suit is basically lost to the
company. High end stores will most
likely not resell the suit, or may resell at a discounted price. Some stores
might dry clean the returned items for resale as long as nothing is wrong with
the suit in question. Going with Amy’s
estimated cost for a suit, and taking for granted she goes to the same company
each time, they stand to lose between $400 and $800 a year.
The store
would account for Amy’s return by debiting their inventory, or add it back into
inventory, the price of a resale suit.
1.
Discussion Question 1
·
Find the financial statements of a service company and of a
merchandising company: http://highered.mcgraw-hill.com/sites/0072512431/student_view0/chapter1/text_company_links.html. What
items appear on the merchandising company statements that do not appear on the
service company statements? Why is there a difference?
I reviewed
the financial statements of BJ Services Company on Google finance, and Charming
Shoppes, Inc. on their own website. Both
sites had their financial statements available quarterly and annually. First I examined their income statements;
they both appear pretty similar with several sections covering every avenue of
income and liabilities, including stock options.
Examining
their balance sheets, the service company had a few more accounts in their
total current assets section, such as construction in progress – gross, and
their buildings – gross and land/improvements – gross accounts were in addition
to their property/plant/equipment, total – gross. Their total assets section, Charming Shoppes
also had a few extra accounts, such as the income taxes payable, and
discontinued operations – current liability accounts. This seemed to be a common thread in the
service company’s balance sheet in each section of their report.
Next I
examined their cash flow statements, and I found another case of the service
company, Charming Shoppes, Inc included many more accounts in each section of
their report than the merchandising company, BJ Services.
Charming Shoppes
(2009). Financial statements, Income statements, Balance sheets, Cash Flow
Statements retrieved from http://www.charmingshoppes.com/investors/financial/ index.asp
on March 2, 2010
BJ Services
(2009) BJ Services Company financials, Income statement, Balance sheet, Cash
Flow retrieved from http://www.google.com/finance?fstype=ii&q=NYSE:BJS on
March 2, 2010
Week 7
1.
Discussion Questions
·
Choose a
popular merchandise or service company. How might the company use accounting
information systems? In what ways do these systems benefit the company? In what
ways might the systems be challenging for the company?
When thinking
of a popular service company, Merry Maids immediately popped into my head. I worked for a short time, two days, for a
company similar to Merry Maids. Merry
Maids is a cleaning service. Labor
employees go to customer’s homes and provide cleaning services on their
houses. These types of companies have
standardized the work they do for each customer so it makes it easy to
determine the supplies needed for each job.
This type of company would use their accounting information systems to
keep track of inventory supplies, supplies each worker takes with them out of
the shop, how many jobs each worker completes daily and even how many miles
each worker drives each day. The company
could find challenges in each aspect that could only be countered by rigid and
accurate measurements on what is actually needed for each job. For example, if you know that a laborer
completed three jobs and all within five miles of the office and the employee
records more fifty miles driven you have to question why the extra twenty
miles.
1.
Discussion Questions
·
Megagrocer is a grocery chain that operates five stores. The
stores are supplied with produce, meat, dairy, and dry goods by six separate
vendors. In addition to the stores, Megagrocer maintains an ecommerce site
through which customers may order and pay for groceries. The groceries are
packed and delivered to customers from one of the five stores in a Megagrocer
van by that store’s personnel. Think about the accounting information systems
that Megagrocer might use.
- What types of
source documents might be collected by Megagrocer to be processed by its
accounting information systems?
o
Why are those
documents important?
Some source
documents that MegaGrocer might collect to be used and processed by their
accounting information systems would be cash register receipts from all their
sales to customers, invoices from their suppliers, employee earning records,
delivery receipts, bank statements, and inventory records. Each of these documents are important in
different ways. They need the invoices
from their suppliers, inventory records, cash register receipts and delivery
receipts to justify the inventory records.
Delivery receipts and cash register receipts are needed to calculate the
amount of sales done each day. Bank
statements are needed to match with deposit records for verification their
deposit was correctly entered into the bank as matches their records. And, employee earning records are important
to calculate how much labor they are spending against their incoming.
Capstone Week 9
1.
Capstone Discussion
Question
·
A
major network is launching a reality program called The Accountant. A group of recent accounting graduates will be
competing for a spot in a national accounting firm. What would make someone a
good candidate for The Accountant?
Describe three challenges the candidates must complete on the program, using as
much detail as you can.
The challenges must test contestants’
skill in challenges related to topics covered in this course. Be creative.
Describe how the challenge will test the contestant’s accounting skills and
knowledge as well as the skills the contestant must have to complete each
challenge successfully.
If I had a
reality program called “The Accountant” for a major network that the
contestants would be competing for a spot in a national accounting firm I would
pick contestants who already held a degree in accounting along with several
years of experience to back up their working knowledge of accounting. I would also pick someone who could handle
the stresses of being on television and had an engaging personality to make
viewer like the contestants and root for their success. I would also have these individuals take an
aptitude test in order to rate their actual knowledge of accounting.
I would
have at least three basic challenges for the contestants. First would be to create an accounting
department for a generic company that includes all forms and personnel needed
to run the business. This would show
their knowledge and skill at knowing what is needed and involved with an
accounting department. Second would be
to create and internal control system to handle and protect all the accounting
information. This would test the contestant’s knowledge on the workings of
internal control. Third would be to take
a billing cycle from general ledger to closing.
This challenge would test their actual knowledge of accounting reports,
formula’s and how to maintain figure integrity.
I would
probably have some question and answer portions that would test the contestant’s
ethics, vocabulary and accounting facts.
I would make the Q&A portion first and then the basic challenges
would be for the few individuals who came through that portion with enough
points.
No comments:
Post a Comment