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Differentiating Depreciation Methods
There is one main difference between straight line

depreciation and accelerated depreciation. Straight line
is decided by taking the cost of the assets, figuring out
the salvage cost when the use of the asset is finished
and how many years of use the asset has. A person
then takes the cost minus salvage and divides the
remainder by the number of years of use. This amount
is the depreciation expense subtracted each year from
the cost. The accelerated depreciation does not have
the same amount of deprecation subtracted each year.
It does have the cost minus salvage value to figure out
the amount to use but is then divided out differently. A
person takes the sum of the years of a products useful
life, such as three years is 3 + 2 + 1 = 6, then a person
would divide the depreciation amount by 3/6 the first
year, 2/6 the second and finally 1/6 for the final year.
So the amount of depreciation expense is larger to
smaller with accelerated and equal amounts for
straight line.
The advantages of straight line method are it is easier
and faster to figure. The advantage of accelerated
method is it is more accurate when figuring
depreciation expense. The accelerated method has an
advantage and disadvantage concerning taxes. A
company can use the accelerated method to take
advantage of bigger tax breaks at the beginning of an
assets life, but since this amount drops during the
lifespan if the company needs added tax breaks it will
not receive them from these assets in the future. With
the straight line method the amount of tax breaks are
even through the life of the product. Most companies
choose this form of depreciation for reporting purpose
on taxes but will use the accelerated method to figure
taxable income.
As mentioned before the advantage of straight line
depreciation is it is easier to figure and uses the same
total each year for deduction of depreciation expense
but the disadvantage is that if use for taxable income
and reporting a company does not get a bigger tax
break at the beginning of the assets life when they
have just put out the cost for the item and may need a
bigger tax break.
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ACC 291 Final Exam Guide (New)

Discussion Question 1:
Based on what you know about accounting, what role

do you see it playing in business operations? How
dependent do you think a business is on its accounting
department? Why?
Accounting plays many important roles especially when
it comes to business operations. Accounting is mainly
responsible for almost all of the financial needs of the
business. It keeps track of all spending, profit and loss
that the company inquires. Discussion Question 1: Post
your response to the following:
How would you describe the difference between
financial and managerial accounting? What are the
distinguishing features of managerial accounting?
There are many differences between financial and
managerial accounting. The financial accounting
statements are available to external users such as
employees, stockholders, creditors, investors, etc. This
is available to them so that they can monitor the
company's performances quarterly or annually.
Managerial accounting provides financial information
for managers and other internal people or department.
Managerial accounting is confidential so it is only
observed by internal users such as management,
owner, and will provided to external users such as the
public. Management uses this for budgeting purposes
or to monitor profit loss/gain within the company.
Managerial accounting can be available to them as
often as needed. Managerial accounting statements is
a great way for management to make decisions based
on what has been reported.
Another response
The differences between managerial accounting and
financial accounting are distinct. Managerial accounting
reports are for those in managerial and decision
making positions. The managers use the financial
report to answer questions, which would advance the
company and its employees. The manager would want
to know if certain investments should be made and
should the company advance an employee's salary.
The manager needs the report to decide if a factory is
built or if a certain stock is brought. The financial
accountant has the job of showing the external users
such as creditors and stockholders a picture of the
company's stability.
The manager's purpose is to manage by making stable

plans, delegate duties, motivate the workers, and
control the atmosphere. Distinguishing features of
managerial accounting are the fact no cpa will audit
the report, and there is no specific frequency of the
report. The reports are done in a need to know basis
and for a specific reason, which is for business
purposes. The reports are detailed and pertain to
specific business decisions. The financial accountant
need only be concerned with the company's finances.
DQ2
Discussion Question 2: Post your response to the
following:
Select a management function (planning,
directing and motivating, or controlling) and explain
how that function relates to business as a whole. Next,
select a different function listed by a classmate.
Discuss with your classmate how the functions you
each selected complement each other.
The management functions that I choose was
controlling. Controlling job is to make sure that the
each department/person is keeping the company's
activities or plans on track and in order to achieve that
they must work closely with Management planning
function. Controlling continually compares the
company's performance to make sure that the planned
standards are being met. In my opinion this is known as
the "dirty work". Controlling operations have to know
what to look for and how to keep track of all the
company's activities. They have to take actions and
quickly correct any errors and make sure that the
company goals are being achieved in a timely matter
or the time that it was planned. If there are errors it is
job of the controlling operations to take quick action.
The controlling operations not only correct errors after
it happens but they also are in charge of foreseeing
any potential errors and act quickly to get that
resolved.
Another response
I chose Controlling as part of the management
function. The controlling function relates to business as
a whole because it helps monitoring the firms
performance to make sure the planned goals are being
met. Managers need to pay attention to costs versus
performance of the organization. let say, if the
company has a goal of increasing sales by 10% over
the next two months, the manager may check the
progress toward the goal at the end of month one. If
they are not reaching the goal the manager must
decide what changes are needed to get back on track.
. -------------------------------------------------
ACC 291 Final Exam Guide
we have another New set of Final Exam Guide which could be found
on this link
Financial Statements
Cost, Volume, and Profit Formulas

By
Kamilah Crooms
Due February 28, 2010
Explain the components of cost-volume-profit analysis.
The components of cost volume-profit analysis consist of Level or

volume of activity, Unit Selling Price, Variable Cost per unit, total
fixed costs, and Sales mix.
What does each of the components mean?
Level or volume of activity is the activity that causes change or

behavior when it comes to the cost. Unit selling Price is the cost for
the product basically how much each unit is selling for. The Variable
Cost per unit is something that can change depending on the activity.
The total fixed cost does stay the same as activities change but differ
per unit. The Sales mix is basically what the name says. Its a mixture
of sale items when more than one product sold the sales will remain
the consistent.
Based on the formulas you have reviewed, what happens to
contribution margin per unit when unit selling prices increase?
Contribution margin is the amount of revenue left over after

subtracting the variable cost. So basically Unit sales price
subtracting or minus variable cost.
Illustrate your explanation with an example from a fictitious

company of how an increase in unit selling prices might affect
contribution margin.
Kellys Sweetheart Flowers
The owner of Kellys Sweetheart Flowers is selling their bouquet of

flowers for $10 per unit. The Variable Cost per unit is $4.00. The
contribution margin will be ($10-$4) = $6. If the sells price increases
to say $15, then the contribution margin will be ($15-$6) = $9 per
unit.
When fixed costs decrease, what does this do for sales? Illustrate
your explanation with an example from a fictitious company.
Kellys Sweetheart Flowers
When the fixed cost decreases, the contribution margin ratio the net
income and sales will increase.
For example,
The flowers are $10 per unit. The variable cost per unit is $4.00. The
contribution margin will be ($10-$4) = $6. The fixed cost is $3. We
subtract Contribution margin Fixed Cost= Net income. The net
income is $3.00.
Define contribution ratios
The contribution margin ratio is the contribution margin per unit

margin divided by the unit selling price.
What happens to contribution ratios as one of the components

changes?
Shown in the example above, if one or more of the components

changes is will cause the net income to increase or decrease.
Reference
statements.suite101.com/article.cfm/cost_volume_profits*the_p_l.
Retrieved 2/28/2010
//http:yourdictionary.com /CVP.org Retrieved 2/26/2010
Thomas, Y. 2005-08-27 Accounting 101 pg. 52 Statement
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ACC 291 Final Exam Guide
ACC 291 Final Exam Study Guide
Question 207
On January 1, a machine with a useful life of five years and a
residual value of $40,000 was purchased for $120,000. What is the
depreciation expense for year 2 under the double-declining-balance
method of depreciation?
IFRS Multiple Choice Question 01
As a recent graduate of State University you're aware that IFRS
requires component depreciation for plant assets. A friend has asked
you to succinctly explain what component depreciation means. Which
of the following correctly describes component depreciation?
7 How should mixed costs be classified in CVP analysis? What

approach is used to effect the appropriate classification?
According to our class materials all mixed cost must be classified

into their fixed and variable and variable elements. The method that
can be used to determine is called the high/low method. To
determine the variable cost the analysis takes the total cost and
divide it with the low activity level. To get the fixed cost then the
company would have to subtract the total variable with either the
high or low activity level.
9. Cost volume profit CVP analysis is based entirely on unit costs.

Do you agree? Explain.
In my opinion when it comes to making financial decisions for the

company, often times more than one method is used. Cost volume
profit is also based on Volume or level activities, unit selling prices,
variable cost per unit, total fixed and sales mix.
14. You can find the break point in dollars by drawing a horizontal
line to the vertical axis. I you want to find the break even point in
units it will be a vertical line from the break even point to the
horizontal axis.
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ACC 291 Week 1 Assignment Comparative Analysis Problem
Purpose of Assignment The purpose of this assignment is to
help you understand the basics of financial statement analysis
using financial ratios on the assets section of the balance
sheet, data interpretation, and how ratios are used to gain
insight about the management of receivable. Assignment Steps
Resources: Financial Accounting: Axia College Material
Appendix C
Budgets Matrix
Directions: Using the matrix, define each of the budgets listed and briefly describe its uses.
Budget Definition Desc
Sales budget Estimate of the expected sales for The sales budg
the period. All of the other budgets units. This will
depend on the sales budget. This is see how many
where all the other budgets will produced for th
start from
Production budget A production of units needed to be Shows manage

produced in order to meet the will be produce
projected sales period and wha
to fulfill invent
Direct materials budget Is the estimated quantity or cost of Shows manage

the raw materials that is needed in materials that
order to produce the units required and or that nee
to fulfill inventory meet inventory
Direct labor budget A estimate of cost and quantity of Shows how ma

direct labor needed in order to laborers neede
meet production units for that b
Management w
be the right am
needed and if t
able to meet th
Manufacturing overhead budget An estimated expected amount of This list all ove
manufacturing cost for the budget cash disbursem
period
Selling and administrative expense budget Anticipated selling and Shows area of b
administrative expenses in the are not listed o
budget period manufacturing.
marketing, pro
the budget per
Budgeted income statement Estimate of expected profitability of Is a very impor

operations in a budget period shows the com
for the budget
Cash budget A projection of expected cash flows Cash budget he

in and out of the business. keep a tally or
balances.
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ACC 291 Week 1 Discussion Question 1
How would you describe the entries to record the disposition of
accounts receivables?
Discussion Question 1: Post your response to the following:
You know how important it is to create budgets for your

household. How does budgeting help management make good
business decisions?
Budgeting is a very important skill that can be applied to everyday

life and also when it comes to making good business decisions. I
really like the way our class resources says about Budgeting.
Budgeting is used as a planning tool used by management to make
good decision for the company. If a company is successful than more
than likely that means that the management team is very good at
managing the company finances. Budgeting helps management plan
ahead, defines what is most important, shows warning signs, reach a
company target without over or under budgeting and etc.
Another response
In a business, a budget helps a business make good decisions because

they are used by the company to plan for future events and coordinate
the events and duties in the company. They also gives objectives used
to evaluate the performance of the company on each level which can
help to make future decisions that will not hurt the company based on
the projected objectives. It can also be used to alert the company of
possible problems or negative trends in the company that need to be
addressed so that there is a clear picture of the overall health of the
company before decisions are made. The budget helps the company to
be able to make an informed decision when making one. It is there in
order to make sure that making a decision like taking on another
company will not hurt the company and is something that the
compnay can sustain based on the budget.
DQ2
Discussion Question 2: Post your response to the following:
What are some of the different types of budgets?
Describe in detail one type of budget covered in the text.
Describe what the budget is used for and what information it

provides a business.
Then, as you respond to your classmates, discuss how the

budget you described relates to the budgets they described.
Discuss how a business benefits from each of the budgets.

There are many different types of budgetting. For example, there sales
budget which allows management to see how many units that need to
be produced, production budget which will allows everyone to see
how many units are going to be produced in or needed to be produced
in order to meet the inventory for that budget period. One budget that
I can describe in detail is called the direct labor budget and this
budget shows how many people, hours is needed in order to meet the
required budget for that period. This will give management an idea of
how much money is needed such as paying the cost of labor. The
company benefits by each of these budgets because it will help
manage just how much money it will cost the company during this
period. Management can also see if there are different ways to cost
the company out of pocket cost down during this period.
Another response
I chose to write about the Production Budget. The Production Budget

shows the cost of each unit needed to produce an item or manufacture
a product. The formula used by the Production Budget :
Budget sales units + Desired ending finished goods units - Beginning

finished goods units = Required production units.
An example would be, every Easter the bakeries in the Bronx loads up
on Hot Cross Buns. My mother and grandmother would buy these
tasty sweet breads,and eat them for breakfast. I personally would like
to eat them every week but, they are only sold during the Easter
season. Maybe, it has something to do with the glazed cross on the
top.
Every Easter Holiday, there appears these Hot Cross Buns and the
bakeries production department allows for the purchases for items
needed to make the buns. After Easter has gone, Hot Cross Buns are
not included in the budget.
-------------------------------------------------
How are bad debts accounted for under the direct write-off method?
What is a Flexible budget?
A Flexible budget is a budget that change or is flexible during

different levels or activity. Unlike the static budget which is a budget
based on one activity level, the flexible budget is based off of more
than one activity level.
The steps to development a flexible budget is :
a) Identify the activity index, and the range of activity
b) Find out what the variable cost, and determine the variable cost
per unit
c) Find out what the fixed cost and determine the budgeted
amount for each unit
d) Organize the budget for selected additional activity within the

appropriate range
The information found on a flexible budget cannot begin with
the master budget. The flexible budget uses the same guidelines the
original budget. The budget consists of Sales, Cost of Goods Sold,
Selling Expenses, General and Administrative Expenses, Income
Taxes, and finally the Net Income.
The information on the budget is a great tool to be used for

evaluation performances. The flexible budget can be used for monthly
comparison purposes. Also during the process that management is
identifying the activity index and the range of activity it will allow
them to see the cost of direct labor hours for that budget period.
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ACC 291 Week 1 Wileyplus Assignment E8-4, E8-11, BYP8-

1, and BYP8-2 (New)
Wiley Plus Assignment Week 1
E8-4, E8-11, BYP8-1, and BYP8-2 in MS Excel
Exercise 8-4 Wainwright Company
Exercise 8-11 Fedex Corporation
Broadening your Perspective 8-1 Tootsie Roll

Capstone Discussion Question: Post your response to
the following:
Think back over what you have studied and learned in

this course. Do you have a new perception of or appreciation
for the field of accounting and how it contributes to
business? Explain.
To be perfectly honest with you I truly had no clue what accounting

did for a company and how important it was. I always thought that
accounting only dealt with payroll. In fact accounting does much
more that just payroll and monitor company supplies (coffee, paper,
pens & pencils). The accounting sets budgets for the entire company,
monitors outflow and inflow of profits, plans budgets for each
department, and much more. When I first begun this class I was
really nervous, I truly thought that I was going to have a hard time
understanding the accounting but I happy to say that I was wrong. I
understood every part of this course.
On a personal note I would like to thank you Jess. If it wasn't for your
pep talk I probably would had gave up. You are truly a
great instructor. I wish you all the best! God Bless

Another response
Accounting has taken a whole new meaning to me in my vocabulary. Prior
to this course, I just took accounting as a calculator and crunching
numbers. I now have a new respect for accounting and all the aspects that
are involved. I never once took into consideration profit, sales, revenue,
and balance sheets also being included with accounting. There is so much
more involved with accounting, and had I not taken this course I would
have never known. Accounting is a very important part of running a
business. I feel that it is imperative to all people thinking of opening a
business should take some type of accounting class to become more
aware of how to run the accounting part of a business.
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ACC 291 Week 2 - Fordyce and Atwater (New)
P10-5A
Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note

on December 31, 2007. The proceeds from the note are to be used in
financing a new research laboratory. The terms of the note provide
for semiannualinstallment payments, exclusive of real estate taxes
and insurance, of $29,433. Payments are due June 30 and December
31.
Business Plan
By
Kamilah T. Crooms
The name of my business is called DestinyWear. DestinyWear is
a urban fashion clothing company for woman, men and youth.
DestinyWear specializes in making clothing for every occasion. My
name is Kamilah Crooms and I am the owner and CEO of
DestinyWear.My goal is to ensure that my company will be succesfull
in all areas and in each department. In order for me to make sure that
the company was going to begin in the right direction I had to
priortize what was most important in establishing my business plan.
The main priority is that I had to first choose the appropriate
business structure, a high demanding product, and most of all an
outstanding accounting team.
Business Structure
Upon establishing DestinyWear I had to decide which business

struture that I felt was best for me to pursue. I decided that as a
Entreprenuer the best choice for me abd the direction of the company
would be for me to be sole proprietorship. Sole proprietorship
allowed me to be the sole owner of DestinyWear. The first and most
important reason that I wanted sole proprietorship is because it is
much easier to start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations. I also want the power to
make and change decisions along the way without having to first
consult anyone else.
DestinyWear Products
DestinyWear products will range from jeans, shirts, accessories and

shoes. The company will first start off with its most profitable product
and that will be the DestinyWear designer jeans line. The jeans line
has over twenty different jeans designs
from straight leg, baggy, cargo, overalls, shorts and much more. The
jeans line will provide services within the United States and Canada
and will eventually service International customers. The DestinyWear
jeans line will have its own building. In this building the bottom floor
will consist of the factory and the top floor will have the different
departments such as management, marketing and most importantly
the accounting department.
DestinyWear Accounting Department
The accounting plays a major role in establishing my company

DestinyWear. The accounting department does more than managing
and reporting the companys financial documents it is the greatest
tool in establishing my business. The key to a powerful accounting
department here at DestinyWear is applying the principles of internal
control. These principles consist of establishment of responsibilities,
segregation of responsibilities, documentation procedures, Physical,
mechanical, and electronic controls, Independent internal verification
and other controls such as Bonding of employees. In order to ensure
that this business plan works DestinyWear has to hire nothing but the
best qualified employees.
DestinyWear Accounting Staff
DestinyWear accounting team of fine employees will all be hired

through the company. There are several requirements that have to be
met in order for myself as the owner and Human Resource
department to even consider the applicant for accounting. We looked
for characteristics, education and work history experience. The first
and far most important qualifying requirements are education. The
applicant has to have a Bachelor BA/BS in accounting degree a plus
if he or she has a masters.
The second requirement is experience. The applicant must have the

minimum of five years of experience working in accounting. He or
She must have knowledge and employment experience of working
with financial statements, cash management and internal control.
Employees must be experienced in Invest idle cash, planning the
timing of major expenditures, delay payment of liabilities keeping
inventory levels low, and increasing the speed of collection on
receivables. In the category of experience we had to hire applicants
according to the position that had to be filled in accounting. For
example, if a position in accounting such as management or
supervisory needed to be filled, then we would look for years of
experience in management or supervisory positions. I personally
prefer that every employee have some type of management
experience.
Last but not least, the employees characteristics. It is a must that

every accounting staff member has and applies professionalism, great
ethic and moral skills, accuracy, and most importantly punctuality,
and reaching company deadlines. These characteristics are very
important to have at DestinyWear.
DestinyWear Accounting Management Team
The DestinyWear accounting management team will be

reporting to me and to the other head staff each week to report
updates and any new changes. The management team is responsible
to have all the different types of budgeting reports that includes Sales,
Labor, etc. Management must follow the responsibility reporting
system for each department. The managers will use the companys
financial information to predict outcomes of the business. I require a
report from each responsibility center, cost center, profit center and
investment center to be reported each month. Management is
responsible to ensure that the company does not over or under budget
and if any changes it must be reported immediately.
Conclusion
DestinyWear will be a very successful team not only because of

the products that we produce but because of having a great
accounting team. With the help of accounting team I DestinyWear
products will be in every wardrobe in America.
REFERENCES
//http:yourdictionary.com /CVP.org Retrieved 3/20/2010
http://enwikipedia.org /wiki/costcenterprofits. Retrieved

3/21/2010
Thomas, Y. 2005-08-27 Accounting 101 pg. 52 Statements.

March 19, 2010
Drucker, P. Managing in the next society 2002. retrieved march

19,2010
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ACC 291 Week 2 Assignment Financial Reporting Problem,
Apple Inc
Purpose of Assignment The purpose of this assignment
is to help you understand the basics of financial
statement analysis related to the assets section of the
balance sheet, data interpretation, and how financial
information is obtained to understand how a company
accounts for its long-lived assets. Assignment Steps
Resources: Financial Accounting:
Costco Wholesale Corporation
If we look at the financial statements of the company we can find that the
company is financially strong. Its strength are:
1. It has enough amount of current asset to repay its current liability. The current ratio of
the company 8.18 indicates that the company has $8.18 liquid asset to repay its $1 of
current liability.
2. The operating cost of the company is increasing because the company is able to
reduce its expenses.

3. Cash from operating activity has increased for the company.
Apart from this strength the company also has some weakness in its financial
statement:
(i) Increasing inventory indicates that the company inventory conversion period is
increasing.
(ii) The cash from investing activity shows that the company cash outflow is more in
the short term investment i.e. in non operating activity.

(iii) The overall has for the year 2008 has declined for the company.
Net Income:
If we look at the trend in net income of the company we can find that the
company net income looks fluctuating but it has improved it net income in 2008
as compared to 2007.
Debt ratio as a percentage of total assets:

If we look at the debt ratio as percent of total asset we can find that the debt
ratio is declining in 2008 as compared to 2007 i.e. the company is increasing
equity to finance debt.
Debt as a percentage of total equity:
As we can see that the debt as percent of total equity is declining in 2008 as
compared to 2007 i.e. the company is increasing equity in its capital structure.
As we can see that there is nothing negative in 2008 for the company and this is
the reason it has positive trend as compared to 2007. Hence there is no need to
correct anything for the company.
-------------------------------------------------
What are the differences among valuation, depreciation, amortization,
and depletion?
Is it appropriate to calculate depreciation using two different
methods? Why?
Week 1 DQ 1
Due Tuesday, Day 2
Go to the U.S. Securities and Exchange Commissions Web site at

http://www.sec.gov and the Financial Accounting Standards Boards
Web site athttp://www.fasb.org. Identify the mission and main
activities of each organization. Then, analyze the similarities and
differences between the roles of each entity. Which entity has more
influence over financial statement reporting? Explain your answer.
According to the SEC website their mission is to protect investors,

maintain fair, orderly, and efficient markets, and facilitate capital
formation. The SEC also requires public companies to disclose
meaningful financial and other information to the public. This
provides a common pool of knowledge for all investors to use to judge
for themselves whether to buy, sell, or hold a particular security. The
SEC is concerned primarily with promoting the disclosure of
important market-related information, maintaining fair dealing, and
protecting against fraud.
According to the FASB website the mission of the FASB is to establish

and improve standards of financial accounting and reporting that
foster financial reporting by nongovernmental entities that provides
decision-useful information to investors and other users of financial
reports. Since 1973, the Financial Accounting Standards Board
(FASB) has been the designated organization in the private sector for
establishing standards of financial accounting that govern the
preparation of financial reports by nongovernmental entities
The major difference in the SEC and the FASB is that the SEC deals
with reporting of financial statements for all industries while the
FASB deals mainly with the private nongovernmental entities. Both
are concerned with the fairness of financial reports and work in the
interest of the public. I believe that the SEC has more influence over
financial statement reporting because they can bring civil action
against companies and individuals for violations of securities laws.
Although according to the FASB website, the Commissions policy
has been to rely on the private sector for this function to the extent
that the private sector demonstrates ability to fulfill the responsibility
in the public interest.
Response 2
Go to the U.S. Securities and Exchange Commissions Web site at

http://www.sec.gov and the Financial Accounting Standards Boards
Web site athttp://www.fasb.org. Identify the mission and main
activities of each organization. Then, analyze the similarities and
differences between the roles of each entity. Which entity has more
influence over financial statement reporting? Explain your answer.
U.S. Securities and Exchange Commission (SEC)
According to the SECs website The mission of the U.S. Securities

and Exchange Commission is to protect investors, maintain fair,
orderly, and efficient markets, and facilitate capital formation(U.S.
Securities and Exchange Commission, 2010, Para. 1).
The main activities of the SEC are to interpret federal securities

laws; issue new rules and amend existing rules; oversee the
inspection of securities firms, brokers, investment advisers, and
ratings agencies; oversee private regulatory organizations in the
securities, accounting, and auditing fields; and coordinate U.S.
securities regulation with federal, state, and foreign authorities. (U.S.
Securities and Exchange Commission, 2010)
Financial Accounting Standards Board (FASB)
According to the FASBs website The mission of the FASB is to

establish and improve standards of financial accounting and
reporting that foster financial reporting by nongovernmental entities
that provides decision-useful information to investors and other users
of financial reports. That mission is accomplished through a
comprehensive and independent process that encourages broad
participation, objectively considers all stakeholder views, and is
subject to oversight by the Financial Accounting Foundations Board
of Trustees (Financial Accounting Standards Board, n.d., Para. 3).
The main activities of the FASB are to identify financial reporting

issues based on requests/recommendations from stakeholders or
through other means. The FASB Chairman decides whether to add a
project to the technical agenda, after consultation with FASB
Members and others as appropriate, and subject to oversight by the
Foundation's Board of Trustees. The Board deliberates at one or
more public meetings the various reporting issues identified and
analyzed by the staff. The Board issues an Exposure Draft to solicit
broad stakeholder input. (In some projects, the Board may issue a
Discussion Paper to obtain input in the early stages of a project) The
Board holds a public roundtable meeting on the Exposure Draft, if
necessary. The staff analyzes comment letters, public roundtable
discussion, and any other information obtained through due process
activities. The Board redeliberates the proposed provisions, carefully
considering the stakeholder input received, at one or more public
meetings. The Board issues an Accounting Standards Update
describing amendments to the Accounting Standards Codification
(Financial Accounting Standards Board, n.d.).
Both the SEC and the FASB have the same goals of fairness,
accuracy, and understandability of financial accounting and
reporting. Both agenecys accomplish these goals in the best interest
of the overall public.
The differences between the SEC and the FASB is that the FASB
regulates financial reporting in the private sector of businesses (but
are subject to the rules and regulations of the SEC) and the SEC deals
with regulating the financial reporting of publicly held corporations.
I believe that the SEC has the greatest influence over financial
statements reporting because they have the final approval on all
changes of the rules and regulations. The Sec can also bring civil or
administrative enforcement actions against individuals and
companies in violation of the securities laws.
References
Financial Accounting Standards Board. (n.d.). Facts about FASB.

Retrieved July 15, 2010, from Financial Accounting Standards
Board:http://www.fasb.org/facts/index.shtml#mission
U.S. Securities and Exchange Commission. (2010, May 3). The

Investors Advocate: How the SEC Protects Investors, Maintains
Market Integrity, and Facilitates Capital Formation. Retrieved July
15, 2010, from U.S. Securities and Exchange Commission:
http://www.sec.gov/about/whatwedo.shtml
Week 1 DQ 2
Due Thursday, Day 4
Search the Internet or the Online Library for information about the
Sarbanes-Oxley Act. A useful guide to some of these provisions is
located at http://www.soxlaw.com. Summarize at least two provisions
of the law, and discuss your interpretation of these provisions with
your classmates. Do you think this law will make financial statements
more reliable? Also, discuss how Sarbanes-Oxley establishes
boundaries to ensure ethical practices. What does the law allow or
prohibit, and why?
The Sarbanes-Oxley act has many provisions to give companies

guidelines for responsible, and ethical financial reporting. One of
those provisions is listed in Section 302 of the act. The provision is
that periodic statutory financial reports be certified that signing
officers have reviewed the reports, the report does not contain any
untrue, or misleading information. The financial statements fairly
present the financial condition. The signing officers are responsible
for internal controls. A list of all deficiencies in internal controls, and
a list of fraud involving employees, and anything that could
negatively affect the internal controls.
Another provision pertains to the "management assessment of

internal controls". This provision ensures that information is
published in annual reports regarding the adequacy of internal
controls, structure and procedures.
The Sarbanes-Oxley act is designed to help companies promote
ethical accounting procedures. The act gives guidelines as to how
financial statements are reported. The act requires verification that
officers within the company have checked the information in the
reports for accuracy and true. The act also requires that the
companies have internal controls in place to ensure ethical reporting
practices. The main thing that the Sarbanes-Oxley promotes is
transparency in reporting.
Response 2
Section 802 of the Sarbanes-Oxley Law defines the penalties that may
be assessed against individuals who failed to comply with the Act. An
individual could be subject to 20 years in jail for altering, destroying,
mutilating, concealing, falsifying records, documents or tangible
objects. Guilt is define by the intent to impede a legal investigation.
This part of the law gets to the heart of how Arthur Anderson reacted
by destroying documents important to Worldcom. The law further
defines that any accountant who knowingly violates their ethics by
wilfully violates the requirements of maintenance of all audit or
review papers. These papers are subject to review up to five years.
The second Section that I reviewed was the Section 302. This actually
is my favorite part of the law because it directly holds the officers and
directors accountable for the accuracy of reporting in their financial
statements. It defines that the management must review and
understand the financial statements and sign that they are true and
accurate. It also holds the management accountable for the internal
controls, requiring any deficiencies to be reported. In the past
directors of companies relied heavily on the internal officers,
management, to report the company performance without questioning
the accuracy or taking their role on oversight committees seriously.
They could hide behind a veil of trust of the key leaders. This Section
clearly puts the responsibility for the Board to remain independent of
the executives and function more effectively on the respective
oversight committees they serve. The example I would share is what
happened in WorldCom. The company leaders shared what they
wanted to with the Board, who trusted implicitly the top leaders. Had
they questioned their legal representation or auditors, they potentially
could have uncovered the fraud that was committed by the creation of
shell companies, with WorldCom employees as stockholders.
I would love to think this law would protect the investing community.
Financial reporting has improved to some extent. Unfortunately the
scams still continue. Example would be Barney Madoff or what
happened in the financial mortgage industry. These unethical
practices were conducted after Sarbanes Oxley was implemented.
Madoff was able to provide false financial information to investors.
Financial industry was allowed to get to aggressive in underwriting
and product suite. Fines and penalties are deterrents. Ethics still
must be inherent in an individual and company. Laws and
requirements are a guide. There will never be enough auditors,
inspectors or oversight boards to catch all of the fraud in the
corporate community.
The law prohibits falsifying information, failing to notify of material

changes, and destruction of records.
-------------------------------------------------
What types of industries have unearned revenue?
Why is unearned revenue considered a liability?
When is the unearned revenue recognized in the financial statements?
Lucent Technologies
Axia College of University of Phoenix
Lucent Technologies is a company based on networking for service

providers, government, and enterprises worldwide (Lucent
Technologies, n.d., Para 1). The products and services they work with
are separated into three categories; service and maintenance,
wireless mobility networking, and wire line networking. Lucent
Technologies is backed by Bell Labs, which does research and
development in networking technologies.
During the years of 2001 to 2003 this company has experienced a

decrease in demand because of other companies loss or capital used
toward spending. This is mainly due to a downturn in the economy. As
an investor this information is necessary to know because it explains
the decrease or increase in sections of the balance sheet. In order to
compare the growth or decline of the companys profit, an investor
must change a balance sheet into a common-size balance sheet. First
when looking at the balance sheet an investor will see that the amount
of paid in capital has increased from the year of 2003 to 2004, the
assets have increased, but the liabilities have decreased. When
running a debt/asset ratio it is noticed that this ratio drops from 1.2 in
2003 to 1.0 in 2004. This shows the companys risk is low when
concerning financial leverage, usually when the debt ratio is less than
one percent it is financed mainly by company equity, so this company
is close to being debt free from creditors.
After changing the balance sheet to a common-size balance sheet

there are several factors an investor will look at. The current assets
have dropped to .48 from .49 in 2004. This does not show harm to the
company because only the accounts receivable dropped while the rest
of the current assets increased. This means the company is not in as
much danger of default on money owed to it. It does have a rise in
marketable securities. The one concern in the assets is the increase of
prepaid cost of pensions and goodwill. Goodwill can be used for tax
breaks but prepaid pensions cannot benefit the company.
When looking at the liabilities section an investor will see a drop in

pension and liabilities and an increase in long term debt, both of
these could be affected because of the drop in the economy. Long term
liabilities are often increased to help a company control interest rate
increases so as an investor cutting back on pension liabilities cuts
back cost to the company and watching interest rate increase show
the company is concerned with its earning and investors. This would
be encouraging or an investor. The stockholders deficit shows a drop
in accumulated deficits from -1.43 to -1.22 and total deficits of -.26 to
-.08. This shows the company is working to control any money loss
and turning it to the companys advantage. Overall it shows the
company is still earning a profit although small. With an increase of
assets and a drop in liabilities the company is showing it is working
in a low risk capital.
After reviewing this information, a creditor or investor must be able

to compare this company to the industry totals. By comparing how
this company compares to other companies similar to it, a person can
see if it is competitive and worth taking a risk. Running ratios will
also show if the company is capable of paying off any debts it has or
if it can acquire the needed cash in case of emergencies. Overall as
an investor, I would say this company would be worth investing in.
Reference
Axia College. (2007). Understanding Financial Statements. Retrieved
May 10, 2010 from Axia College, Week 2 Assignment, ACC/230.
-------------------------------------------------
ACC 291 Week 2 Individual WileyPLUS Assignment Week

Two
we have another New set of week 2 Willeyplus assignment which
could be found on this link
Based on what you know about accounting, what role do you see it
playing in business operations? How dependent do you think a
business is on its accounting department? Why?
Accounting plays many important roles especially when it comes to

business operations. Accounting is mainly responsible for almost all
of the financial needs of the business. It keeps track of all spending,
profit and loss that the company inquires.
The business is very dependent on it accounting department.

Accounting department is responsible for monitoring more than the
cash flow, it also works closely with IRS, government to make sure
that everything is being done correctly (payroll, taxes, etc). The
accounting side of the business can be considered to be the lungs of
the company next to the heart.
Why are ethics so important in the field of accounting?
Wow where should I start? First of all the when dealing with
accounting there must be consistent clear communication between
the business and the accounting department. Honesty is always the
best policy. Good ethnics keeps the business running at its top level.
The company's personal information, employee information could
be given to the wrong hands and it can destroy the company. A good
accounting department has way too much to lose and they will not
want to risk a horrible reputation in the field.
Another response
People bring all their financial information to an accountant who

in turn looks through all of it with a fine tooth comb. People need
to know that they can trust this person with all of their personal
information. Most licensed professionals swear to a code of ethics,
whether they follow them or not is up to that professional.
Unfortunately there are many out there that do not and they ruin
the trust for other professionals. Accountants really need to have
the trust of their clients being that they work with peoples taxes and
finances and need much information from their clients.
Another response
Ethics are important in the field of accounting for several reasons.

Ethics mean different things to differnt depending on the role of the
accountant. If an accountant is hired by an individual or a
business, that accountant is trusted with the finances of the person
or business. The accountant is trusted to give an honest account of
finances and not to defraud or jeopardize that individuals or
companies relationship with the government, creditors of
financiers. Individuals and businesses also trust the ethics of
accountants insofar that they do not disclose their information to
those that do not have a right to it. Finally, In the accounting
profession, much like many other professional service professions,
an accountants reputation is the continuing source of employment.
If they are knows to have a bad or even flexible ethical code then
they can develop a bad reputation and experience a loss of business.
-------------------------------------------------
ACC 291 Week 2 IndividualWileyPLUS PracticeCh 8,9,10

Quiz
Resource:WileyPLUS
Preparing an Income Statement

The companies net income is profitable when
the sales exceed the cost of goods sold. In this,
the gross profit is $761k. This is beneficial to the
company. Though we took the cost of goods
away from the net sales there are still other
areas which need to take a piece of the pie. For
this company, once the SG&A and depreciation
are taken out, the company still contains a profit
of $290k. But the buck does not stop there. Once
the interest income and interest expense are
adjusted the balance before earnings and taxes
is $290k. After taxes are taken out, the company
is left with a net profit of $174k.
In this case I think the company has achieved

success with a net profit of $174k. If the
company were unable to be profitable, the
company would eventually go out of business.
We would be able to tell if the company was not
profitable by looking at each section individually.
The cost of goods sold is what stands out for me.
If we pay more to make the product then we are
actually selling it for, there is no profit to be
made. So, I think it should all start there.
-------------------------------------------------
ACC 291 Week 2 Learning Team Weekly Reflection

Discuss the objectives for Weeks One and Two. Your
discussion should include the topics you feel
comfortable with, any topics you struggled with, and
how the weekly topics relate to application in your
field.
Week 3 DQ 1
Due Tuesday, Day 2
Post your answer to Problem 3.5 on p. 109 (Ch. 3). How might
the information contained within the stockholder equity
statement be used for management and investor decision-
making? Provide specific examples of situations in which the
stockholder equity information might be used.
The statement of stockholders equity provides the changes in the equity accounts during the
accounting period more in depth than the balance sheet. The information found on the
statement of stockholders equity includes retained earnings, common and preferred stock,
and additional paid in capital. Management uses the statement of stockholders equity to
ensure they are reaching their goal of maximizing shareholder's equity. The use of market
ratios help with the analysis of the statement of stockholders equity, such as earnings per
share, price-to-earnings, dividend payout, and dividend yield. These ratios will help both
management and investors in analyzing the company. For example, if I were looking to
invest in a companys stocks I would utilize all of the financial ratios, as well as the market
ratios. The earnings per share ratio is calculated before the price to earnings ratio, P/E,
because the earnings per share ratio is used in the second. If a company pays dividends,
the dividend payout ratio will come in handy. It tells us The percentage of earnings paid to
shareholders in dividends (Investopedia, 2010, p. 1).
References
Investopedia. (2010). Dividend Payout Ratio. Retrieved August 3, 2010, from
Investopedia:http://www.investopedia.com/terms/d/dividendpayoutratio.asp
Response 2
Explain what can be found on a statement of stockholders equity .
The major elements of stockholders' equity include capital stock, paid-in capital,
retained earnings, treasury stock, unrealized loss on long-term investments, and
foreign currency translation gains and losses.
How might the information contained within the stockholder equity

statement be used for management and investor decision-making?
Provide specific examples of situations in which the stockholder equity
information might be used.
Management may look at the stockholders equity statement retained earnings

section to determine if company should borrow money for capital investments or
finance it through various forms of equity. It may also be used by the stockholder
to evaluate the compensation paid to the company officers. Investors may also
look at the statement for cumulative net unrealized gains and losses before
purchasing stock in the company. Investors are also interested in the paid in
capital because they can compare it to the additional paid in capital and the
difference between the two values will equal the premium paid by investors over
and above the par value of the shares.
DQ 2
Week 3 DQ 2
Due Thursday, Day 4
Provide an example from the text or the Internet that

demonstrates a situation in which a companys net profits
appeared good in the statements, but the gross or operating
profits presented a different picture. Discuss how this might have
occurred. Respond to the following question, addressed in
Problem 3.6 on p. 109 (Ch. 3): Why is the bottom-line figure, net
income, not necessarily a good indicator of a firms financial
success? Look for indicators like liquidity or solvency to answer
this discussion question.
An example that demonstrates the situation is Enron. Enrons

financial statements did not show all the expenses and costs.
Instead of showing them on the income statement they made
entries so the cost and expenses would post in the balance sheet.
The same was done with the revenues. This way it would be less
expenses and the net profit appeared good. Many debts and
losses were not reported in the financial statements. From the
third quarter of 2000 through the third quarter of 2001, the
directors fraudulently used reserve accounts within Enron
Wholesale to mask the extent and volatility of its windfall trading
profits, particularly its profits from theCalifornia energy markets;
avoid reporting large losses in other areas of its business; and
preserve the earnings for use in later quarters. By early 2001,
Enron Wholesale's undisclosed reserve accounts contained over
$1 billion in earnings. The head of the company improperly used
hundreds of millions of dollars of these reserves to ensure that
analysts' expectations were met. In addition, Skilling and others
improperly used the reserves to conceal hundreds of millions of
dollars in losses within Enron's EES business unit from the
investing public.This would show the creditors that Enron was
making profits and its position was solid.
The net income is not necessarily a good indicator of a firms
financial success because the income statement only shows the
profit or loss at a period of time and does not show the whole
picture of the company. The Balance Sheet, Statement of cash
flow, Statement of shareholders equity and the Income
Statement all together give the real picture of the business. Each
one of them shows different aspects of the business. These
statements show where the income is actually coming from; is it
from sales or from loans the company is borrowing? If the
company is selling a building or any other asset but that does not
mean that it is selling more products and making profit. Looking
at the Income Statements the company might be making profit
but at the same time it is extremely leveraged.
Response 2
A companys net income is not the whole picture, just part of it. There are lots of things that
contribute to the net income that may not be significative to the companys success. If the
value of a dollar has a sudden change that can affect the bottom line if the company
happens to hold the medium of exchange that can benefit by the change that might occur.
The company can falsely inflate the bottom line. A companys net income is coupled with
liabilities, cash flow, and selects financial ratios. Looking at it this way is a much better way
of seeing what the companys success is like. A company can change up many things to
make it look like their income is better. These things that can be changed are single sales
events, cash infusion, or false financial statements. Some things like debt that a company
has, the companys cash on hand, their capital assets conditions, or even their sales trends.
To figure the success of the company, you must look at the whole picture. One thing cannot
tell you all the facts of the companys affairs. You cannot tell the net income of the company
just from the bottom line. Look at all the financial records.
Response 3
Provide an example from the text or the Internet that demonstrates a situation in which a companys
net profits appeared good in the statements, but the gross or operating profits presented a different
picture. Discuss how this might have occurred. Respond to the following question, addressed in
Problem 3.6 on p. 109 (Ch. 3): Why is the bottom-line figure, net income, not necessarily a good
indicator of a firms financial success? Look for indicators like liquidity or solvency to answer this
discussion question.
Net income is not necessarily a good indicator of a firms financial

success because they have ways to manipulate it by increasing
their revenues or hiding some of their expenses. For investors
trying to decide where to invest their money, they need to look
more into assessing how the company came up with the numbers
they presented.
An example of this situation is when Laribee Wire Manufacturing

Co. exaggerated in recording their inventory value which allowed
them in acquiring loans from six banks totaling to about $130
million using it as collateral. At the same time, they reported $3
million in net income for the period, but in actuality they lost $6.5
million.
This company showed a higher net income by reporting fake
inventory in which its value was overstated and transferred over
to their income statement. When the banks assessed their
financial statements, it was enough to sway them into lending the
loans they needed.
Reference:
Investopedia. (2010). Spotting Creative Accounting On The

Balance Sheet. Retrieved
fromhttp://www.investopedia.com/search/searchresults.aspx?
q=Spotting+Creative+Accounting+On+The+Balance+Sheet&submit=Search
-------------------------------------------------
ACC 291 Week 2 Wileyplus Assignment P8-3A, BE9-11,

DI9-5, E9-7, E9-8, BYP9, P9-2A (New)
P8-3A, BE9-11, DI9-5, E9-7, E9-8, BYP9, P9-2A.
Problem 8-3A: Bosworth Company
Brief Exercise 9-11: Nike, Inc.
Do It! 9-5

STOCK DIVIDEND

Stock Split
University of Phoenix
Stock Dividend
In the present time, the stock dividend has become important concept.
When dividend is given in form of stock, it is called stock dividend. In this
form of dividend, the cash does not use. It is important, when the
corporation declares stock dividend, the market value of the share
decreases because the number of stock increases. The many companies
prefer stock dividend due to the tax benefit. If the individual gets stock
dividend, he does not pay any tax on stock dividend. Thus the stock
dividend reduces tax burden. On the other hand, the ownership of
investors also spurs up in the company because the number of holding
share increases. There is also disadvantage of stock dividend. The market
value of the share decreases, so the market value of holding also
decreases (Kennon, 2009).
The ABC Company is leading company in its industry. The number of
outstanding share of the company is one million. On the other hand, the
number of investors is five millions. The value of market capitalization is
$100 million. The management declares 20% stock dividend. Thus the
200000 shares will be distributed as a stock dividend. The number of
outstanding share will be increased by 200000 and the new total number
of outstanding stock will be 1.2 million. On the other hand, the new value
per share in the market will be $83.33 (100 million/1.2 million). This
example is taken from below mentioned link:
Stock Split
The stock split is also an important concept. When the management wants
to increases number of shares, the management follows this method. In
this method, the face value of the share is split and number of share gets
increased. Due to increment in number of outstanding share, the market
value of per share also gets affected but the total market capitalization of
the company does not affect. Both stock split and stock dividend increase
number of outstanding shares but both are different due to the accounting
treatment. In the stock split, the investors do not get any real benefit. It is
also known as non-cash distribution of dividend. The motto behind stock
split is to increase trading of the shares in the market (Baker, 2009)
For example, the face value of per share is $100 and the total
outstanding shares are 100 million. If the management of the company
announces stock split in ratio of 1:2, the total outstanding shares will be
increased by 100 million, thus the new total number of the share will be
200 million. On the other hand, the face value of the share will reduce by
50%. So the new face value of the share will be $50. Due to effect of stock
split, the holding share of the investor will also increase in the prorate
basis. If the investor has 10 shares, now he will have 20 shares. It is
important thing that the total issued capital will not be changed. The
illustration of stock split has been got from following link:
Reverse Stock Split
The reverse stock split is just opposite of stock split. In this process, the
management reduces the number of outstanding shares. The company
increase face value of the share. In this method corporation decides a ratio
such as 2:1. Thus the company accumulates two shares in one share. In
this method, the total market value of company does not change. Due to
reverse stock split, the earning per share and face value of per share rises.
Thus the reverse stock split provides just opposite result from stock split. It
is important question, why company selects this method. When the
management seems that the face value of the share is less as compared
to competitors then the company goes for this method to make its share
value to equal to competitors shares face value. It is also a sound
strategy to increase treading of shares. If the face value of share is too
cheap in comparison to competitors, the investors will be discouraged for
investment. For increasing the confidence of investors, the management
uses this method (Mladjenovic, 2009).
For example, an investor holds 100 shares of XYZ Company and the face
value per share is $50. If the management go for reverse stock split option
and declares one share for 10 shares then the holding of the individual will
reduce 9 shares for every 10 shares. Thus the new holding of the investor
will be 10 (100/10) shares but the face value per share will be $500. It is
also important that the total market capitalization will remain as same as
before reverse split. The example of the reverse split is take form below
mentioned link: http://www.sec.gov/answers/reversesplit.htm.

References
Baker, H. K. (2009). Dividends and Dividend Policy. John Wiley and Sons.
Kennon, J. (2009). All About Dividends. Retrieved May 31, 2010, from
http://beginnersinvest.about.com/od/dividendsdrips1/a/aa040904_2.htm
Mladjenovic, P. (2009). Stock Investing for Dummies. Dummies.

-------------------------------------------------

ACC 291 Week 3 Assignment The Liabilities Section of

OBrians Balance Sheet
is to help you understand the balance sheet
presentation for the liabilities of a company.
Assignment Steps Resources: Financial Accounting:
Tools for Business Decision Making Prepare the
liabilities section of OBrians balance sheet using the
following information: Accounts payable $157,000
Analyzing an Income Statement

The net income of Kodak has decreased a bit; it
appears that the company is more profitable. By
conducting a side by side analysis from 2004 to 2003
the company has increased in current assets and
decreased in total assets. It appears that the company
went down in property, plant and equipment net as well
as discontinued operations. So, despite the decrease in
total assets it looks like the company has made a good
decision.
The company has also decreased its total liabilities by

about 4%. I believe this to be good because the short
term borrowings and long term debt has decreased. To
me, this means that the company is tightening their
belt and paying off old debt.
Total shareholders equity has down a little bit in

dollars, but on the percentage level the companys
percentage has gone up. I believe this is because the
company issued $104k more shares in 2004 than in
2003. The company has the same amount of shares
outstanding in 2004 that it did in 2003 as well.
Retained earnings on the stock have gone up in 2004
as well. I believe this is contributed by the more shares
that have been issued.
I believe the profitability of the company is under good

standings. They appear to be making the necessary
adjustments in the company to stay with in a profitable
income.
-------------------------------------------------
Why does a company choose to form as a corporation?
What are the steps required to become a corporation?
Cash Flow Statement Analysis
Cash Flow Statement Analysis
The cash flow statement is important financial statement of the

corporation. The cash flow statement states from where cash has
come and where cash has been gone. Thus the cash flow statement
makes a relationship between beginning balance and ending balance
of cash. The cash flow statement is prepaid on the basis of income
statement and balance sheet of the company. The Little Bit Incs
beginning cash balance including marketable securities was $24000.
On the other hand, the ending cash balance including marketable
securities of the company was $40000 (Weygandt, Kimmel & Kieso,
2009).
The net income of the company was $5500 during 2009. The company
generated cash inflow from operating activity is less as compared
cash out flow from operating activities. The company generated
$9000 negative cash balance in operating activity section of the cash
flow statement. On the other hand, in the investment section, the firm
has also negative cash balance. The firm has $7000 negative balance
in investment section of the cash flow statement. The Little Bit Inc
made investment during the year instead of selling of assets. Last
section of the cash flow statement is financing activity section. In
which, all finance related activities come. The corporation sold some
shares and borrowed some money from outside lenders therefore the
company has positive case balance by $32000 in financing activity
section.
Reference
Weygandt, J.J.,Kimmel, P.D. & Kieso, D.E. (2009). Managerial

Accounting: Tools for Business Decision Making. John Wiley and
Sons.
-------------------------------------------------
Why is preferred stock referred to as preferred?
What are some of the features added to preferred stock that make it
more attractive to investors?
Would you select preferred stock or common stock as an investment?
Why?
Week 5 DQ 1
Due Tuesday, Day 2
In what ways does the statement of cash flows relate to the balance
sheet and income statement?
It is important to understand what we are doing with the numbers and

the results these numbers give us because the result is the information
that will be available to us from financial statements. Although some
want to see the income statement and ignore the other statements we
need to use them together to see the total picture of what is happening
to our business. The relationship between the numbers on the
financial statements shows us everything we need to know about the
business.
The income statement shows income and expenses for a period of

time and if we are making or loosing money. The balance sheet
compares the assets to liabilities and shows how much money the
business would have if everything is sold today.
The statement of cash flow might be the most critical statement

because there is plenty of information we can gain form it. This
statement relates with the income statement on operating activities to
see if they are generating cash or not. It is related to the balance
sheet on how much cash is used in investing activities. In relationship
with the balance sheet the cash flow statement shows what cash is
provided or used by financing activities. It will tell us how much debt
has been paid and will indicated if we are using more debt or have
paid down the credit line.
When the business makes a sale or receives payment for a sale on
credit that is an inflow. A sale shows up as income on the profit and
loss statement and as an inflow on the cash flow statement. It also
shows up either as cash or accounts receivable on the balance sheet.
Also, how quickly we can collect on accounts receivable will play a
big role in the cash flow. When the business spends money, it shows
up as an expense in the profit and loss statement and as an outflow on
the cash flow statement. It also shows up on the balance sheet as a
decrease in cash, or an increase or decrease in liabilities, depending
on what the expense represents.
Response 2
In what ways does the statement of cash flows relate to the

balance sheet and income statement?
The cash flow statement relates to the income statement and balance
sheet. The net income from the income statement is listed on the
statement of cash flows. Operating activities are analyzed on the
statement of cash flows; this section of the statement reconciles the
net income to the actual cash the company received from or used
during operations. The second section of the statement of cash Flows
is the cash flow from investing activities which include purchase or
sale of assets. The last section in the Statement of Cash Flows is the
cash flows from financing activities that includes raising cash by
selling stocks/bonds or borrowing from backs; or cash out flows from
paying back loans. The balance sheet shows the different account
balances at the end of the accounting period. The statement of cash
flows reflects changes in the accounts listed on the balance sheet
between accounting periods. The net cash from operating, financing,
and investing activities are added up to calculate the net change in
cash.
Week 5 DQ 2
Due Thursday, Day 4
Discuss how the statement of cash flows is utilized by investors. If you

were an investor reviewing a statement of cash flows, what section
might interest you most? Why? Discuss the circumstances in which
other sections of the statement might be important to an investor.
Prior to making an investment in a company, one would want to

understand the decisions the owners are making to fund the
operations of the company daily. Maintaining sufficient cash to
acquire new product, pay overhead, and satisfy generated sales would
be the predominant need of the company. Second need would be for
the company to have sufficient cash to remain competitive. This may
require cash to invest in research and development, increase
inventory as new product introduction, improve efficiency in plant
and equipment, or cash to satisfy prior borrowing obligations. By
reviewing the statement of cash flow, the investor can determine if the
company is generating sufficient cash internally to fund operations or
are they requiring outside injection of cash to finance the short fall in
cash needed to operate the company. Last, the investor can review
the statement of cash flow to better understand the leverage of the
company and the requirement for repayment of debt, or dividends to
reward prior investments.
Response 2
Discuss how the statement of cash flows is utilized by investors. If you
were an investor reviewing a statement of cash flows, what section
might interest you most? Why? Discuss the circumstances in which
other sections of the statement might be important to an investor.
The statement of cash flow is utilized by investors because it has all

information integrated from the balance sheet and the income
statement. The statement of cash flow is used by an investor to see if
the operating activities are greater than the net income to have
earnings that are called high quality. If operating activities are
less, then a red flag will be raised as to why the net income is not
becoming cash. Another reason would be investors believe cash is the
best. The statement shows all cash coming and going from the
business. If the company generates additional cash than what is being
used, then the company can reduce their debt, acquire another
business, or buy some of the stock back. The last reason why would be
that financial models are based upon the statement of cash flow.
If I was an investor reviewing a statement of cash flows the section

that might interest me the most would be the operating activities. I
would like to know how the company was doing and what areas need
to be improved to have more cash generated in the business. All the
sections are important to an investor so they can see the complete big
picture of their investment.
-------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Assignment
Candela Corporation
Candela Corporation
Candela Corporation and Subsidiaries have been working for

over 34 years developing and commercialize aesthetic laser systems
that allow physicians and personal care providers to treat a variety of
cosmetic and medical conditions such as removal of spider veins,
scars, stretch marks, warts, as well as hair removal and age spots,
freckles and tattoos. Other skin treatments such as psoriasis and acne
and acne scars are also treated. (Axia College, 2007)
Going from top to bottom on The Candela Corporation and

Subsidiaries Consolidated Statement of Cash Flows; for the operating
activities, 2002 shows an alarming loss in the net income while 2003
and 2004 for the company are showing a significant and steady climb
in the net income. In 2004 there was a new category added called
Provision for the disposal of discontinued operations and the
category has caused an increased the account for 2004. Loss from
discontinued operations grew from 2002 to 2003 but had a significant
decline for 2004. Depreciation has increased over the last 3 years as
well. Provision for bad debts increased significantly too, but an
increase in bad dept is expected as revenue increases. The provision
for deferred taxes shows the company went from a loss in 2002 and
2003 to show there was no tax loss in 2004. The tax benefit from
exercised stock options has practically doubled sense 2003. The
changes in assets and liabilities for the last 3 years have been up and
down. Receivables have increased, notes receivable decreased, and
inventories have increased. Other current assets, other assets have
also increased. Accounts payable has made a significant decrease in
the last 3 years as well as accrued payroll expenses. The accrued
payroll decreasing could mean that the amount of employees over the
years has decreased as well. The accrued warranty costs have
increased as well; this could mean that the company renewed
equipment warranties. The net cash provided by operating activities
looks to have gone from a loss in 2002 to a large profit in 2003 and
then a decrease, yet still a profit for 2004. It appears on the
operations level that management needs to do more to regulate the
companys finances so there is not an up and down variance each
year.
The cash flow from investing activities shows me that in the last
three years they had large amount of investments in 2002 and 2003
but now they are letting them decrease.
The cash flow from financing activities states that the proceeds
from issuance of common stock have increased significantly from
2002 to 2003 and rose a little more in 2004. The repurchases of stock
has not happened sense 2002 and the principle payment of long-term
debt grew in 2003 from 2002 and shows no activity for 2004. Same
goes for the net borrowing on line of credit; it appears that Candela
Corporation is current on payments to line of credit. So, the net cash
from financial activities looks great for 2004. The cash and cash
equivalents for each year have increased steadily.
After reviewing the consolidated statement of cash flows for

Candela Corporation, I believe the company is making a profit, but
perhaps need some control over their operating activities.
Axia College. (2007). Statement of Cash Flows. Retrieved June 14,

2010 from Axia
College, Week Six, ACC 230.
-------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.
11,12
Resource:WileyPLUS
Analyzing Statements of Cash Flows
4.8. Research Problem

Choose five companies from different industries
and locate their statements of cash flows
for the most recent year.
(a) Create a table to compare the dollars
provided or used by operating, investing, and
financing activities, as well as the overall
increase or decrease in cash.
(b) Create a second table for each company
comparing this same information for each of the
three years presented in that companys
statement of cash flows. Include an additional
column that looks at the combined cash flows for
all three years.
(c) Write a short analysis of the information
gathered. Your discussion should address, among
other things, whether cash flow from operating
activities is large enough to cover investing and
financing activities, and if not, how the company
is financing its activities. Discuss differences and
similarities between the companies you have
chosen.
(a) Create a table to compare the dollars

provided or used by operating, investing, and
financing activities, as well as the overall
increase or decrease in cash.
STATEMENT OF CASH FLOW ANALYSIS
STARBUCKS HARELY DAVIDSON RITE AID

2008 2008 2008
NET INCOME / STARTING LINE $ 315.5 $

- $ (1,079.0)
OPERATING ACTIVITIES $ 1,258.7 $
(684.7) $ 79.4
INVESTING ACTIVITES $ (1,086.6) $
(393.3) $ (2,933.7)
FINANCING ACTIVITIES $ (184.5) $
1,293.4 $ 2,904.0
CASH $ (11.5) $ 190.7 $
49.9
(b) Create a second table for each company

comparing this same information for each of the
three years presented in that companys
statement of cash flows. Include an additional
column that looks at the combined cash flows for
all three years.
STARBUCKS
2008 2007 2006
Net Income/Starting Line 315.5 672.64

564.26
Cash from Operating Activities 1258.70
1331.22 1131.63
Cash from Investing Activities -1086.60 -
1201.95 -841.04
Cash from Financing Activities -184.50 -171.89 -
155.33
Net Change in Cash -11.50 -31.35 138.80
Net Cash - Beginning Balance 281.30 312.61
173.81
Net Cash - Ending Balance 269.80 281.26
312.61
HARLEY DAVIDSON
2008 2007 2006
Net Income/Starting Line 0 933.84 1043.15

Cash from Operating Activities -684.65 798.15
761.78
Cash from Investing Activities -393.25 391.21 -
35.26
Cash from Financing Activities 1293.39 -
1037.80 -637.02
Net Change in Cash 190.70 164.46 97.42
140.98
Net Cash - Ending Balance 593.56 402.85 238.4
RITE AID
2008 2007 2006
Net Income/Starting Line -1078.99 26.83

1273.01
Cash from Operating Activities 79.37 309.15
417.17
Cash from Investing Activities -2933.74 -
312.78 -231.08
Cash from Financing Activities 2903.99 33.72
-272.84
Net Change in Cash 49.61 30.08 -86.75
162.82
Net Cash - Ending Balance 155.76 106.15 76.07
(c) Write a short analysis of the information

gathered. Your discussion should address, among
other things, whether cash flow from operating
activities is large enough to cover investing and
financing activities, and if not, how the company
is financing its activities. Discuss differences and
similarities between the companies you have
chosen.
Starbucks operating cash flow has gone up in
2007 and decreased a little in 2008. The net
change in cash for Starbucks looks a on the down
side but previously was doing well. The net loss
in cash at end of year is decreasing from the
previous year. This could mean that this year
there can be a gain.
Harley Davidson's operating cash flow has

significantly decreased from 2007. It appears the
company was on an upward cycle from 2006. The
decrease in cash from operating activities is
probable from the lack of information supplied
for net income. With the economy the way it is
and not many people buying at this point could
have an effect on why the net income is
decreasing. With a bounced back economy in the
coming year could reflect a positive gain.
Rite Aid's operating cash flow has taken a

significant decrease as well from previous years.
Although, after taking in cash from investing and
cash from financing, the net change in cash is
better than it has been in previous years. Rite
Aids net gain in cash could be from the ever
growing needs in medical supplies. This also
could reflect the expansion of the company.
-------------------------------------------------
Discuss the objectives for Week Three. Your discussion
should include the topics you feel comfortable with,
any topics you struggled with, and how the weekly
topics relate to application in your field.
Findwhat.com Case - CheckPoint

ACC 230
Findwhat.com has recorded the 135 percent
increase in the revenue which is mainly due to
the business acquired of Espotting during the
year. The different accounting policies are
present for the acquiring firm and the acquired
firm. The company has recorded certain
premature revenues for the amount which
advertisers had made only the advance deposit.
As result, the company is recognizing the vendor
financing as revenue. In some places, the gross
revenue has been recognized while in another,
the net revenue has been recognized. The
network click revenue is recognized at gross
level while the private level revenue is taken at
net level. Some of the revenue expenditures
have been recognized as the capital
expenditures.
Revenue for set up network fee is treated as
deferred revenue and is recognized over a period
of time. The company is very inconsistent with
regards to its accounting policies in terms of
recognition of revenue. The provision and
treatment of amount for doubtful debt is also not
satisfactory. When a customer clicks on a
sponsored advertisement, the whole of the
revenue due to him is recognized. The company
is having a very high amount of doubtful debt
balance at the end of the year ending December
31, 2004.
-------------------------------------------------
ACC 291 Week 3 Wileyplus Assignment P9-7A, E10-5, E10-

8, E10-13, E10-22, E10-24, BYP10, P10-9A, P10-13A,
IFRS10-4 (New)
P9-7A, E10-5, E10-8, E10-13, E10-22, E10-24,
BYP10, P10-9A, P10-13A, IFRS10-4.
Exercise 10-5: Olinger Company
Exercise 10-8: Ortega Company

Exercise 10-13: Romine Company
Exercise 10-22: Cole Corporation

Week 7 DQ 1
Due Tuesday, Day 2
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you
read your classmates responses, consider the following scenario:
If you compared two different companies that utilized two different
valuation methods, how might the quality of the results differ? Also,
comment on the difficulty of making comparisons between two
firms that use different valuation methods.
Understanding the different inventory methods is crucial. First

the person that establishes the inventory needs to determine which
method to use. LIFO, or FIFO. LIFO means Last in First Out. This
means that when a purchase is made, and sales are recorded the
newest product is used first. So if I bought 10 combs at $2 on
December 1st, and then I buy 5 combs at $2.50 on December
10th. When sales are made I am going to record sales using the
$2.50 until I sell through the 5 combs that were purchased on the
10th, and then the cost will go to the previous purchase price of $2
until those 10 combs are sold through. FIFO is just the
opposite. Meaning that goods are used in the order that they are
received. The first items ordered, are the first items sold. Either
method will pass an audit. It is important to note though that
managers can't switch back and forth between the two
methods. Profit will vary depending on which method is being
used. Say you sold only 6 combs at $3 each. Using the LIFO
method this would equal $3.50 profit. If you used the FIFO method,
this would result in a $6.00 profit.
Response 2
Post your answer to Study Question 5.2 on p. 180 (Ch. 5). As you read your classmates
responses, consider the following scenario: If you compared two different companies that
utilized two different valuation methods, how might the quality of the results differ? Also,
comment on the difficulty of making comparisons between two firms that use different
valuation methods.
It is very important to understand which inventory valuation method is
being used to determine the profit numbers quality. The balance sheet,
statement of cash flow and income statement can be directly impacted by
the valuation method that used to determine the costs of inventory. The
three methods that are used are FIFO, LIFO and Average Cost. The
valuation ratios can be dramatically affected depending on the inventory
valuation that is being used over a long-term period; especially because
prices are likely to rise. When using FIFO you can increase net income, but
then at the same time raise the amount taxes that business is obligated to
pay. When using LIFO the inventory can be obsolete because they are old
this will result in lower net revenue because the products pricing is
higher. The Average Cost results usually fall between LIFO and FIFO. The
bottom line can be affected mainly by the inventory analysis and the ratio
results that are formed from that analysis. It is easier to compare
companies that are in the same line of business, so I believe that quality of
results would differ tremendously if different valuation methods were
used. If you use LIFO that company may seem unattractive but they are
performing well, as for FIFO it may look good as for profit, but may not be
performing well.
DQ 2
Week 7 DQ 2
Due Thursday, Day 4
Post your answer to Study Question 5.6 on p. 180 (Ch. 5). Discuss
the consequences of poor quality reporting. What has the U.S.
government done to improve the quality of reporting after recent
financial scandals such as Enron?
I think that the significance is that the analysts only see this one
HUGE transaction. The events that actually led up to this large
transaction actually took place over a 2 year period. These items
should have been written off as they occurred. Wall Street would not
have known that the executives refused to write off these accounts
when they should have. Wall Street only see's the one large
transaction. If the company would have been more honest in their
reporting they would have seen (more than likely) that there were
many accounts over a two year period that should have been written
off at different periods. So the analysts would not have seen a
pattern of recurring write-offs. If the analysts only see the one
transaction they are less likely to be able to paint an accurate picture
of the financial standing of the business for investors, or potential
investors. If the investors could see that there were many accounts
that had to be written off maybe their investing decisions would have
been different. The regulation of the accounting field has grown by
leaps and bounds since the Enron scandal. The government has
implemented several agencies and regulations to ensure honesty in
accounting practices. SOX is one example of an agency that has
been put into place to ensure honesty in accounting. SOX
implements things like internal controls, and accountability for CEO's
and CFO's.

Response 2
I believe the impact and importance of this write-off event is a very
big matter. It is obvious how they handled it that it was a scandal
from the start. I think that everyone involved had a big role in how
things played out. To me I think of the investors as a really big hit to
this but also feel that audit committees have to be held responsible
as well. It has been shown over many examples that adit oversights
are happening to financial reporting. Although I do feel they are
getting better and tighter due to conforming tightly with the GAAP
requests. I feel over time the accounts receivable should have been
written off in smaller increments and not all taken by $405 million at
once. Maybe that isn't correct but it would have been easier I would
think to take the receivables over time.

Response 3
Wall Street should have read the footnotes and seen that the write off was for accounts
receivables and should have been reported in the allowance for doubtful accounts. Every
company that allow sales on credit face doubtful accounts; therefore, the write off may
reoccur. The significance of this transaction is that WorldCom want to cover up the $405
million dollars that it was unable to collect from its customers, but WorldCom wrote off a
large sum of money rather recording the write-off as needed and the analyst over looked
it. Depending on how the company policy is for writing off accounts, from 1998 to the
3rd quarter in 2000 is 11 quarters. If the company wrote off bad accounts quarterly it
should have wrote off 36,818,181.82 per quarter. Investors would not want to continue to
invest into a company that has poor collection skills, or poor management. Unusual items
are simply for those items that are not recurring operating expenses. Bad debts do not
fall under this category. Since the Enron and WorldCom scandals many rules and
regulations have been put in place by the government such as SOX. More people are
being held accountable for their actions and consequences follow poor quality reporting
such as fudging the books.
-------------------------------------------------
Why are companies required to prepare a statement of cash flows?
Why is the statement of cash flows divided into three sections?
What does each section tell you about the operations of a company?
Presenting to Stakeholders
Presenting to Stakeholders
Financial statements provide insight into the companys current

status and lead to the development of policies and strategies for the
future (Axia, 2007). Financial statements and notes to the financial
statements should be used to analyze the company. For instance, what
do the financial statements reveal about why the company has
requested a loan or purchased items on credit? What is the firms
capital structure and what does the firm have outstanding? How well
can the company pay back debt? What recourses are used to pay
debt? What is the companys performance record and are there any
future expansions? What are the expected returns and how successful
is the company compared to industry averages? Which areas of
operations contributed to the companys success, and what are the
strengths and weaknesses of the company? What changes can be
made to improve the future performance of the company?
Key financial ratios will assist in determining the information

requested. Liquid ratios measure a firms ability to meet cash needs
as they arise. The current ratio is a good tool to use because it
measures the ability the firm has to pay debts when due. The current
ratio for REC is at 2.4 times for 2007, although it is down from 2006
the company is still able to pay current debt when due. Cash flow
ratio considers cash flow from operating activities has increased from
2006, and this indicates an improvement in short-run solvency.
Average collection period has gone down 5 days within the last year.
The cash conversion cycle gives in-site on why the cash flow has
improved or decreased, in this case the conversion period for REC
has improved by 26 days.
Activity ratios measure the liquidity of specific assets and the

efficiency of managing assets. Accounts payable turnover is up seven
times from the prior year and inventory turnover is also up .25 from
last year. Accounts payable turnover is down 9.05 from 12.10 in 2006.
This means that the company is taking longer to repay payables. The
fixed asset turnover and total asset turnover ratios are used to assess
managements skills in generating sales from investments in assets.
The fixed asset turnover has dropped slightly, but the total asset
turnover has risen slightly. The increase in total asset turnover comes
from improvements in inventory and accounts receivable turnover.
Leverage ratios measure the extent of a firms financings with debt

relative to equity and its ability to cover interest and other fixed
charges (Axia, 2007). Debt ratio, long-term debt to total
capitalization and dept to equity have all raised slightly implying a
slightly riskier capital structure. The times interest earned and the
cash interest coverage have increased since 2006. The interest
payments can be covered 7.4 times this year. The cash interest has
improved due to the operating profits and cash from operations. The
fixed coverage ratio is also important in cases where companies use
operating leases. In this case, the fixed charges have increased
slightly.
Profitability ratios are used to measure the overall performance of a

firm and its efficiency in managing assets, liabilities, and equity. The
ratios used are the gross profit margin, operating profit margin and
net profit margin. All of which have improved for REC. As well as the
cash flow margin, return on total assets, return on equity and cash
return on assets. Over all the company seems to be in well financial
standings and looking toward a profitable year.
Reference
Axia College. (2007). The Analysis of Financial Statements. Retrieved

June 28, 2010,
from Axia College, Week Eight, ACC 230.
-------------------------------------------------
What are some common ratios used to analyze financial information?
Which are the most important?
What are some examples of how ratios are used in the decision
making process?
Analysis of Scenarios:
Debt Scenario would increase the debt ratios from to 50%. Equity
Scenario would reduce the debt ratio to 40%. With Debt option,
earnings per share would be higher. Interest declines to 2.86 times
with the Debt option while times interest earned increases to 3.75
times with the Equity option. Either option exhibits a good use of
financial leverage because for both, the financial leverage index
being greater than 1. However, it is higher using the Debt option.
-------------------------------------------------
ACC 291 Week 4 Individual WileyPLUS Assignment
Resource:WileyPLUS
Complete the following WileyPLUS Week Four Exercises and

Problems:

Interpreting Financial Ratios
Luna Lighting, a retail firm, has experienced

modest sales growth over the past three years
but has had difficulty translating the expansion of

sales into improved profitability. Using
three years financial statements, you have

developed the following ratio calculations and
industry comparisons. Based on this information,

suggest possible reasons for Lunas profitability
problems.
Industry
2009 2008 2007 2009
Current 2.3X 2.3X 2.2X

2.1X
Average collection period 45 days 46 days 47

days 50 days
Inventory turnover 8.3X 8.2X

8.1X 8.3X
Fixed asset turnover 2.7X 3.0X
3.3X 3.5X
Total asset turnover 1.1X 1.2X

1.3X 1.5X
Debt ratio 50% 50% 50%

54%
Times interest earned 8.1X 8.2X

8.1X 7.2X
Fixed charge coverage 4.0X 4.5X

5.5X 5.1X
Gross profit margin 43% 43%

43% 40%
Operating profit margin 6.3% 7.2%

8.0% 7.5%
Net profit margin 3.5% 4.0%

4.3% 4.2%
Return on assets 3.7% 5.0%

5.7% 6.4%
Return on equity 7.4% 9.9%

11.4% 11.8%
Based on this information, some possible reasons

for Lunas profitability problems are suggested as
under:
a) Net Profit margin of the company has
degraded and this might be due to decrease in the
net income of the company due to increase in
expenses. This needs to be improved upon by cost
control and cost reduction.
b) Return on equity of the company has

degraded further and this also indicates that there
is a decrease in the net income of the company
due to increase in expenses. This needs to be
improved upon by cost control and cost reduction.
c) Fixed charge coverage has fallen, which

means that the debt payment along with interest
might have increased and this will also lead to
decrease in the net income of the company and
thus degrading the profitability position of the
company.
d) Operating profit margin has dropped even

though gross profit margin has remained constant.
It means that the operating expenses are higher
and need to e controlled to improve the
profitability of the company.
e) The fixed assets turnover and the return on

assets have also degraded; this also indicates
decrease in the net income of the company.
-------------------------------------------------
ACC 291 Week 4 IndividualWileyPLUS Practice
Resource:WileyPLUS
Capstone Discussion Question
Due Tuesday, Day 2
What have you learned in this course

about the process of analyzing financial
statements?
I have learned that there is a lot more to

analyzing financial statements than I thought.
This class has made me question my decision to
go into the accounting field. I feel inadequate
after taking this class. I am not an articulate, or
analytical person. I tend to get confused easily
and do better at putting the information
together than I am at figuring out what it all
means. This is my last block of classes before
my Bachelor program starts, and I don't know if I
am ready, or if I even want to continue.
Analyzing financial statements takes a very
detail oriented mind, and one that is great at
problem solving. It is critical to understand the
financial statements, and how they relate to one
another. There is a lot of information that is not
as obvious as it would seem. Looking at the
bottom line will not give a good picture of how a
company is doing financially. It is important to
know the how and why the bottom line looks the
way that it does.
Response 2
I have learned that it takes someone that has the
patience, tenacity, and motivation to truly
analyze the statements. If you go about it not
wanting to do the work you wont give a good
analysis. I found that you have to be willing to
dig deeper than most would to get a full picture
of the company. I found that it is not an easy
task to complete. For me the process is a tedious
one. I don't think I would want to go into that
type of accounting where I have to analyze the
statements of a company. I think for me I would
be better in specialized accounting like A/P or
A/R. I am better at figuring out problems and
figuring out ways to make them better. I am
better at specific tasks so for me I wouldn't want
to analyze the statements. I am glad to have
learned how, because at some point I am sure it
will come in handy.
Response 3
All financial statements are essential documents
because they tell what has happened to a
business over a period of time but most users of
financial statement are more concerned about
what will happen in the future. Stockholders and
creditors are concerned with future earnings
and dividends and company's future ability to
repay its debts. Management is concerned with
the company's ability to finance future
expansion.
Working as a bookkeeper I do all the steps in
monthly cycles consisting of entering
transactions into the journals, working with A/R,
A/P, payroll and preparing the reports, but I have
not been able to analyze the reports the way I
learned in this class. I learned how important is
to monitor and interpret the results. I learned
how to compare financial statements of a
company with a company from the same industry
and point out the differences and similarities.
This class taught me the importance of analyzing
the Income Statement, Balance Sheet, Cash Flow
Statement and Stockholders Equity each one
individually. I learned how essential is the quality
reporting and how useful this quality is in
business decision making. I learned about key
financial ratios: liquidity ratios, activity ratios,
leverage ratios, and profitability ratios. All these
ratios are valuable as analytical tools and will
help me indicate the areas of strength and
weakness in a business. Even though I learned
the information step by step in this class I tent
to go over every single chapter all over again to
better absorb the material. This class taught us
the potential of some management
manipulations of financial statements, thus
following the general accounting rules, being
honest, ethical and professional are the ways on
leading to safe and profitable decisions.
-------------------------------------------------
Discuss the objectives for Week Four. Your discussion
Evaluating Financial Health 1

Evaluating Financial Health
Apple Inc. (AAPL)

Apple Inc. (AAPL)
Apple is one of the strong market participants of
computer industry. It also involve in
manufacturing of telecom devices, software and
other peripherals. It enjoys full advantage of USA
as home country, as it has a strong retail
network of 273 physical stores whose majority is
in USA, beside the E-retail outlet around the
globe. The diversified product portfolio
empowers the apple to strive in tough
competition against Dell, HP & Compaq
(Electronista, 2010). Amongst its competitor
Apples outclass profitability is witnessed of its
effective diversification efficient reach of product
to customer and state of an art Research and
Development.
Managements Strategy
It is clear from the financial and the strategic
analysis of the Apple Inc. that the management
of the company believes in continued research,
innovation and product development. It may be
the sole reason that why the firm avoids the cash
dividend and rely over the stock options. Besides
the hardware business of computer the apple is
also focus on developing application software
operating system, and all such software
application which added the value of its product.
The management is of the view that R&D,
integrated marketing channels and its product
diversification is the source of competitive edge
against rivals of its industry. Management is
aware of the need of the investment in the
promotion and advertisement activities; it
increases the brand equity, brand loyalty and
awareness about the products. Management also
considers focusing on the retail store as it is the
source to remain in contact with customer and a
way to market the product directly; it is also a
way to cross sell the market to customer.

Financial returns in Comparison to Industry
An investor is always keen to know about the
profitability. Hence we start with the assessment
of profitability. Apple Inc. has shown a
tremendous improvement in net sales and
profitability since 2005 to 2009. In 2008 the net
income increases 75.07% and in 2009 increases
34.58% shown that Apple cop. is continuously
enhancing its profit. Company earning P\S is also
at increasing trend. In 2009 basic EPS is 9.22
from 6.94 last year, and it was 4.04 in 2007. It
should be noted that no cash dividend is
announced since 2005, although stock base
benefit and compensation is given. An increase
in return on asset has been observed in 2009
i.e.26.96% against 19.33% last year while
industries average is 19.8. Hence Apple is
leading the Industry from this angle. Return on
equity is 18.92% into 2009 lower than 33.40% of
industry benchmark, meaning apple is at lower
leverage with a roe increase of 4.03% this year
(Hardware Marketplace, 2010).
Financial Risk and Industry
At this stage of our analysis we extend our
findings to assessment of risk associated with
the investment opportunities in APPLE Inc.
Analyzing the liquidity we observed that Apple
has a sound ability to meet its short term
obligation. It is revealed by the healthy current
ratio of 2.74 for the year 2009; it is improved
from 2.46 of the last year 2008. If we had a glace
on the industry it reflects a standard of 2.5. In
the computer equipment industry a very low
inventory has been observed. That is why the
acid test ratio fall lightly below the current ratio
i.e. acid test ratio is 2.70 for the year 209 in
comparison to 2008, which were 2.43. If we
compare the acid test of 2009 i.e. 2.70 with
industry average, which is 2.5 (msn.com, 2010).
On the liquidity

situation it is stated that the risk avoider will be
glad to look at the satisfactory liquidity position.
As far as the solvency risk is concern in the
long run the debt equity ratio is 0.11 for the year
2009, which is increased from 0.08 of 2008. Here
it is important to refer to the industry average of
0.07 (OnlyHardwareBlog, 2010). Hence it is
apparent that though the APPLE Inc. is more
risky in the long run, but it does not sound like
the alarm.
Cash Flow Analysis
Due to the increase in sale the operation of
the firm expanded, and hence besides other
assets, the requirement of the cash also
increases in 2009. $1.11 billion is generated from
operations, which is 5.87% higher than the last
year. The deferred tax expense in 2009 is v1040
million this noon cash expense last year it was
39 million and 78 million in 2007 (Electronista,
2010).
The company actively invests in marketable
securities that not only improve its liquidity, but
rather give a room to meet hazardous need of
raw inventory at any point of time. Investing
activities gives negative balance $ 17.434 billion.
It is also clear from the cash flow that firm does
not announce any dividend in cash, rather it
takes a tax benefit form stock base benefit;
secondly, firm keeps healthy cash in hand.
Apple and its Main Competitor
When comparing the Apple with its major
competitor like Dell & HP, Apple marks higher
price earning ratio of 19.10 times that is greater
than Dell and HP, which is 16 times and
18.3 times respectively. We analyze the share

price to book value it is 5.71 times; again higher
than 4.1 times of Dell and 1.38 times of HP.
Cause of higher market price is the retention of
profit and stock base benefits. Apple also has
high capitalization; the date is $ 250.0 billion
(Electronista, 2010).
Apples Performance and Economy
Global economic recession is on the way to
recovery, although Europe and America needs
some more time to normalize. However,
reasonable growth is observed in emerging
market like Brazil, Malaysia, India and China.
Triad block recorded a poor growth. What is
going to be with the world economic outlook is
the global economy is going to revive with the
V shape pattern or its recovery would be like
expanded U as some economist say growth will
be slow. I am of the view that Apple Inc. should
more focus on the emerging market like India,
China, South Pacific region countries. So Apple
needs to exploit more and more opportunities
outside the USA. I am optimistic that the idea of
direct marketing will work out side the USA as
well. Hence Apple needs to introduce maximum
retail store outside the USA.
It is important to look at trend analysis and

industry comparisons as a means of determining
if it is the best time to expand or stay put and to
see how its future products will be accepted by
the public.
References
Electronista. (2010). Apple only US computer
builder to outgrow industry average. Retrieved
July 2, 2010, from
http://www.electronista.com/articles/10/06/04/isu
ppli.sees.apple.at.34pc.world.market.share/
Hardware Marketplace. (2010). Computer
Hardware. Retrieved July 2, 2010 from
http://www.hardwaremarketplace.com/computer-
hardware/
msn.com. (2010). Apple Inc: Key Ratios.
Retrieved July 2, 2010 from
http://moneycentral.msn.com/investor/invsub/res
ults/compare.asp?Page=PriceRatios&Sy
mbol=AAPL
OnlyHarwareBlog. (2010). Highest debt to equity
ratio in the computer hardware industry
detected in shares of international business
machines. Retrieved July 2, 2010 from
http://onlyhardwareblog.com/
-------------------------------------------------
ACC 291 WEEK 4 Stockholders Equity Section of the

Balance Sheet (Lachlin Corporation Balance Sheet)
is to help you become familiar with examining the
stockholders' equity section of the balance sheet.
Assignment Steps Resources: Financial Accounting:
Financial Analysis
Wal-Mart Stores Incorporated operates chain of retail
stores in USA as well as outside the USA. The first Wal-
Mart store was opened by Sam Walton in Arkansas in
USA in 1962. Within a span of five years; he opened
more stores and he number increased to 24 stores
across Arkansas. The incorporation of Wal-Mart Stores
Incorporated was done in 1969. Wal-Mart grew in the
United States of America by opening of more stores in
to the country. The company not only opened the
stores across Arkansas but also across the United
States of America (Wal-Mart Corporate, 2010).
Wal-Mart was opposed by the unorganized retail
business holders in the USA as their business was
affected by opening Wal-Mart stores. The company also
opened its first store outside the USA in South America
in 1995. Wal-Mart wanted to spread itself not only to
the USA, but in other countries as well. In 2006, the
company was having 3800 stores in USA and more
than 2980 stores outside USA making it one of the
largest retail chains in the world. This corporation was
also having a vision to establish itself in to a global
entity. Wal-Mart was one of the first companies to
operate in the organized retail sector (Fishman, 2006).
The modes of entry used by the company were
different for different countries. Wal-Mart used the
mode of entry in to various countries according to the
rules and regulations prevailing in to that country (Wal-
Mart Stores Inc: Financial Statement, 2010).
The sales of the company for the financial year ending
in January 2010 are 413.8 billion dollars and income for
the same period is 14.7 billion dollars. The quarterly
sales growth for the company has been 5.90%, while
the industry average is 6.80 %. The five-year annual
growth in the sales of the company has been recorded
at 7.50 % while five year annual growth of income is
6.58 %. By analyzing the financial statements of Wal
Mart Incorporated, we find that debt equity ratio of
Wal-Mart is 0.71 on 31st January 2010, which is 0.68 for
the industry. It means the proportion of debt of the
company in its capital structure is lesser than the
equity. The company is less leveraged so the interest
burden on the company is minimal. Wal-Mart has
capacity to borrow from the market for its CAPEX in the
future. The interest coverage ratio is 13 times in
January 2010, which is 21.9 for the industry. Wal-Mart
needs to improve profitability to improve interest
coverage ratio for the reduction of risk of the lenders of
the company (Wal-Mart Stores Inc: Financial Statement,
2010).
The total revenues received by the organization in the
year ending January 2010 were $408.2 billion whereas
revenues in the year ending January 2009 were $404.3
billion dollars. The revenues in the year ending January
2008 stood at $377 billion dollars. Thus, it can be easily
analyzed that the total revenues of the organization
has grown over the years steadily. This has also
impacted the net income of the organization and thus,
increments could also be seen in the net income of the
organization. Net Income, which stood in the year
ending 2008 at $12.7 billion, increased to $13.4 billion
for the year ending 2009 and again increased to $14.3
billion in the year ending 2010 (Wal-Mart Stores Inc:
Financial Statement, 2010).
Again if cash flow statement of the organization is
analyzed it can easily be viewed that the cash flow
from operating activities have always increased from
the last three years. The cash flow from operating
activities stood at $20.6 billion in the year ending 2008
has increased to $23.1 billion for the year ending 2009
and too further increased to $26.2 billion for the year
ending 2010. But the cash flow from investing and
financing activities has seen positive and negative
fluctuations both. Here where net cash outflow from
investing activities has decreased first and increased
later again. For the year ending 2008, it stood at $15.6
billion which decreased to $10.7 billion but again
increased to $11.6 billion. Again the net cash outflow
from financing activities increased constantly since at
the end of year 2008, it stood at $7.4 billion which
further for the year ending 2009 increased to $9.9
billion and further increased to $14.1 billion for the
year ending 2010 (Wal-Mart Stores Inc: Financial
Statement, 2010).
Wal-Marts return on equity has improved in the last
three years, which is a good sign for the shareholders
of the company. It was 19.9% in January 2008, which
increased to 20.3 % in 2009 and then again marginally
increased to 20.4 % in 2010. The return on asset has
also shown the same trends in the last three years. In
2008 the return on asset was 7.9 %. It increased to 8.1
% in 2009 and then further increased to 8.4 % in 2010.
It shows the increase in the efficiency in the utilization
of the assets of the company. The net profit margins
have been almost the same in the last three years in
the company. It was 3.4 % in 2008, 3.3 % in 2009 and
3.5 % in 2010 (Wal-Mart Stores Inc: Financial
Statement, 2010).
The price to sales ratio and price to book value ratio
have shown negative trends in the last three years,
which shows that the stock of the company is available
at cheap price as compare to the price it was carrying
three years back. The price to sales ratio, which was
0.55 in 2008, was decreased to 0.46 in 2009 and then
improved to 0.51 in 2010. Similarly, price to book value
ratio reduced from 3.12 in 2008 to 2.83 in 2009 and
then improved marginally to 2.86 in 2010. This
represents the better opportunity available for the
shareholders to invest in to the stock of the company.
The book value per share of the company has also
increased in the last three years. It was 16.26 dollars
per share in 2008, which increased to 16.63 dollars per
share in 2009 and further improved to 18.69 dollars per
share in 2010. This represents the increase in the
retained earnings of the shareholders in the company
(Shim & Siegel, 2007).
Wal-Marts current assets level has shown stability in
the last three years for the company, which shows the
lesser investment in current assets for the company
even with the increased sales. In 2008 the cash and
marketable securities available with the company was
48020 million dollars, which increased to 48949 million
dollars in 2009 and then decreased to 48331 million
dollars in 2010.
Quantitative Analysis holds huge significance while
evaluating the financial health of the organization.
Three types of techniques are used for quantitative
analysis. The three techniques are trend analysis,
common-size analysis and ratio analysis. Trend analysis
is one of the significant quantitative analysis tools that
assist in analyzing the financial health of the company
as compared to its previous years. The year on year
trends in the financial statements are studied to
analyze whether organization is improving upon its
past performance or it is further going down (Brigham
& Houston, 2007).
Common-Size analysis is another quantitive analysis
tool again one of another tool that helps in making
evaluation of the financial health of the company as
against its competitors. The financial statements of the
company and its industry competitors are compared by
taking a common base and then performance is
analyzed as against the competitors. It helps in
knowing whether the organization is performing better
than its competitors or not. Ratio analysis is also used
to evaluate the financial statements of an organization.
This analysis is used to interpret the performance
shown in the financial statements of the organization.
The ratio analysis helps the organization compare
performance over the years or in the same year
(Brigham & Houston, 2007).
Quantitative Analysis is used by the company and its
stakeholders to analyze the financial performance of
the organization. Trend analysis is used by the
company, the shareholders and the investors to
analyze the performance of the company over the
years. Common-Size analysis is used by the
competitors, management, and investors to evaluate
the organization that is performing better whereas ratio
analysis is used specifically by all the stakeholders to
interpret clear and well defined results shown in the
financial statements of the company (Brigham &
Houston, 2007).
These techniques help to evaluate the liquidity or
short-term solvency. By using current ratio, one can
analyze the effectiveness of the liquidity position of the
organization. Profitability of the organization is also
analyzed through profitability ratios, common-size
analysis, as it helps to know the organizations profits
earned by the company as compared to others. Trend
analysis and ratio analysis with the help of different
asset turnover ratios and trends could easily analyze
that assets are effectively used or not (Brigham &
Houston, 2007).
Wal-Marts current stock price is 50.56 dollars. The
stock has gone up as high as 56.27 dollars, and as low
as 47.35 dollars in the last year. The earnings per share
of the company which was 3.16 dollars per share in
2008, was increased to 3.35 dollars in 2009. Earnings
per share further increased to 3.76 dollars in 2010. The
analysis shows the improvement in the earnings of the
company in the last three year. The current price
earnings ratio of the company is 13.2 which is less than
the industry average of P/E ratio of 15 times (Wal-Mart
Stores Inc (WMT), 2010).
Analyzing the stock of the company from the
investment point of view, we can estimates that the
fundamentals of the company are very strong. The
stock has return on equity, return on assets better than
the industry average of 22.9 % and 9.1 % respectively.
The company has given a better annual average return
on asset and return on equity in the last five years as
compared to the industry. The company has a debt
equity ratio and net profit margin, which is less than
the industry. However, Wal-Mart is improving on the
efficiency front. As a result, Wal-Mart stock is
recommended for investment.
References
Brigham, E.F. & Houston, J.F. (2007). Fundamentals of
Financial Management. (11th ed.). Cengage Learning.
Fishman, C. (2006). The Wal-Mart Effect: How the World
Most Powerful Company Really Works-- and How it's
Transforming the American Economy. Penguin Group
Shim, J.K. & Siegel, J.G. (2007). Schaum's Outline of
Financial Management. (3rd ed.). McGraw-Hill
Professional.
Wal-Mart Corporate. (2010). History. Retrieved July 25,
2010 from http://walmartstores.com/AboutUs/297.aspx
Wal-Mart Stores Inc: Financial Statement (2010).
Retrieved May 31, 2010, from
http://moneycentral.msn.com/investor/invsub/results/st
atemnt.aspx?Symbol=WMT
Wal-Mart Stores Inc. (WMT) (2010). Retrieved May 31,
2010, from http://finance.yahoo.com/q/co?
s=WMT+Competitors
-------------------------------------------------
ACC 291 Week 4 Wileyplus Assignment Do It! 11-1, E11-5,
E11-7, BYP11-1, BYP11-2, P11-5A, P11-8A (New)
Do It! 11-1, E11-5, E11-7, BYP11-1, BYP11-2,
P11-5A, P11-8A.
Do It! 11-1
Exercise 11-5 Garcia Corporation
Exercise 11-7 Pele Company

For this week's checkpoint we had to look up three job postings in the
field of accounting. I'm glad that I got this opportunity because it
actually opened my eyes and expanded my knowledge in the
accounting field. The three job positions are listed below. The first job
title was Senior Internal Auditor. A Senior Internal Auditor
responsibilities is to plan and perform financial, operational audits,
and identify business process risk. This job position only specified
that the pay was well over 100k a year!!!! Qualifications BA/BS,
and minimum of 3-4 years public accounting. The second job posting
was a Tax Manager. Tax Manager is responsible for conducting basic
tax research, maintain tax records and ensure proper tax accounting.
This position requires a BA in Accounting, and a minimum of 7-8
years of expereience.The job pay is listed as 120k!!! The third job
posting was Assistant Corporate Controller- SR Management.
Assistant Corporate Controller- SR Management position Inventory
Accounting for North America, Credit management for North America
and Corporate accounting for Latin America, responsible for assuring
accuracy of inventory and sales and works closely with external
auditors on receivable audits. The requirements for this position is as
follows, BA/BS, public accounting experience preferred, Strong
verbal and written communication. For the Assistant Corporate
Controller- SR Management the salary pay starts at 110k-130k with
bonus and benefits.
I didn't know that Accounting career actually paid this much. I might
think about changing my careers.
-------------------------------------------------
Why do corporations buy back their own stock?
What does it tell you about the corporation?
Axia College Material

Appendix B
Cash Management Matrix
Directions: Using the matrix, list how each of the principles of internal control works, and give an
example for each. Next, list how each of the principles of cash management works, and give an
example for each.
Principles of Internal Control How it Works
Establishment of responsibility Happens when the company assigns My job, Our Sa

one person to be in control of a specific the only one th
job or have authority to make restocking fee
decisions.
team to be in c
customers retu
Segregation of duties This is when the company has more A church- You ha
than one person to control a task or job the offering and
someone who w
what was receiv
Documentation procedures Evidence or proof of all company My job we delive

transactions customers, and
sign prior to lea
customer sign a
form
Physical, mechanical, and electronic controls Allows the company to control assets Our job has a sy
through physical or electronic based this tracks the e
systems or programs. lunches. Also, m
CSR have been r
Physical control
guard, they requ
to entry.
Independent internal verification Any information that can be reviewed , My job has a wa
compare, and reconciliation by a employee inventory and w
they were short
can go back and
and compare th
system and a ph
determine if the
incorrect
Other controls Bonding of employees, company Our company fir

protects against abuse of assets. because she had
card business ca
was not work re
Principles of Cash Management How it Works E
Invest idle cash Occurs when any excess funds or cash My fathers com
needs to be invested, investments and
favor
Plan the timing of major expenditures A company wants to make sure that During the reces
there is money set aside for major cash lower than expe
needs companies pulle
Delay payment of liabilities When a company pays the bills at an Ok, when times
appropriate time not late and not too bills are due I or
soon. which bills need
soonest, becaus
early I will cut o
could be used fo
Keep inventory levels low Happens when a company keeps the Sees Chocolate
inventory low so that it will continue to sure that they a
bring profit or making too m
the company wi
Increase the speed of collection on Money that is owe to the company by When a custome
receivables other people or customers is money product and has
that can not be counted towards the company can no
companies funds theirs until it is
-------------------------------------------------
ACC 291 Week 5 Individual Effect of Unethical Behavior

Article Analysis
Write a 350- to 700-word article analysis in which you
identify situations that might lead to unethical
practices and behavior in accounting.
Financial Statements
Today, I will be describing a balance sheet,

income statement, retained earnings statement,
and statement of cash flows and how a company
uses these financial statements as a tool to make
future decisions for the company.
Balance Sheet
A balance sheet a statement sheet that reports
the companys financial balances of the
business. This sheet includes the companys
total of assets and liabilities. It is used for all
three types of business sole proprietorship,
business partnership and corporate business
companys. Creditors rely on this financial sheet
to determine if the company will be able to
repay.
Income Statement
An Income Statement is a financial statement
that shows the companys profit and losses. It
basically shows all the companys gains and
losses that were made during a period of time.
After the company deducts the expenses from
the revenue then you will get a total net income.
This is a great statement to use especially
because this will show investors how much net
income is the company bringing in, or how
financially stable the company truly is.
Retained Earnings Statements
Retained Earnings Statements reports the
changes to the retained earnings (net income in
a corporation) during a certain time period. This
financial statement shows dividends, profits and
loses. Investors and Lenders monitor the
retained Earning Statements especially when it
comes to monitoring dividends. Some invest use
this tool to see if the company is paying high/low
dividends. Retained Earnings Statement is part
of the balance sheet under Stockholders equity.
Statement of Cash Flow

Statement of Cash Flows provides information
regarding the companys cash receipts. This
statement gives a detailed account of the
operating, investing and financial activities of
the company. It also allows investors a chance to
observe how financially stable the company is so
that they can make a choice if they want to take
a risk on investing into the company. Also the
accounting department needs this statement in
order to see if the company has enough money
for payroll uses.
All four of these financial statements are all

extremely important tools to use in the business.
Another statement that was not listed but is
often used is called comparative statements.
Comparative statement gives a side by side
comparison of the financial statements above.
Reference
http:yourdictionary.com
/accounting_statements.org Retrieved 1/28/10
Thomas, Y. 2005-08-27 Accounting 101 pg. 52
Statements
-------------------------------------------------
ACC 291 Week 5 Individual WileyPLUSAssignment
we have another New set of week 5 Willyplus assignment which
ACC 291 Week 5 Wileyplus Assignment E7-3, E12-1, E12-8, P12-

9A, P12-10A, E13-3, E13-4, IFRS13-1, P13-2A (New)
Compare and contrast sole proprietorships, partnerships, and

corporations.
Sole proprietorships means that a business that owned by one

person. That includes and not limited to all profits and losses, debts
and unlimited liability, all will come from the solely one owner and
not a group or in this case a partner or co-owner etc. Partnerships
are seen much differently than sole proprietorships. Partnerships is
a business that owned by more that one person/s. This is the
number one difference from being a sole proprietorship or sole
owner. Basically, two or more people come together and split the
cost, debts, and liability. Corporations is an business that has
separate entity owned by stockholders. The huge difference between
corporations and the other two is that they are owned by
stockholders. Stockholders make decisions that is first best for their
company, secondly the company that they have together.
Why would a entrepreneur want to choose one over the other?
An Entrepreneur is a person that wants to start a business with

their vision and have more power of the decision making. The best
choice for an entrepreneur is to choose sole proprietorship out of all
the three choices. The first and most important reason is because it
is much easier to start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't have to split it
between any other owners or corporations.
If I was to start a new business which one would I choose?
In this case it depends on the type of business. My case I will be

opening a hair salon and I would prefer sole partnerships. i choose
that because I want to be in control and I don't want to split the
profit.
-------------------------------------------------
ACC 291 Week 5 Learning Team Ratio Analysis Memo
Resource:Virtual Organizations
Click the Virtual Organization link on the student
website to access the Virtual Organizations.
Select one of the Virtual Organizations as the basis for
the assignment.
Current assets
When it comes to a company's classified balance
sheets you will find current assets sheet. Current
assets is cash or cash equilivants that the
company will use. What you will find on a current
asset sheet is Cash and equilvants, Short term
investments, Accounts receivables, and other
assets.
Long-term investments
Long-term investments when it comes to balance
sheet are investments that the company intends
to hold onto. The investments that are listed are
as follows, bonds, stocks and cash. You will also
find short-term investments in the company. The
difference between short-term and long-term
investments is that the short-term investments
will be sold and the long-term investments
normally the company will choose to keep it.
Property, plant, and equipment
Property, plant, and equipment are what the
company calls "fixed assets". Property, plant and
equipment are assets that can not be easily
converted into cash. These are basically items
such as company car (used to deliver products),
computers and copier machine, and freezer used
for restaurants.
Intangible assets
Intangible assets are non-monetary items that
can not be seen or touched. For example,
trademarks, copywriters, patents and goodwill.
Intangible assets are normally listed in the
separate assets.
references
-------------------------------------------------
Discuss the objectives for Week Five. Your discussion
For Discussion Question 1: Post your response to

the following:
When reviewing a financial report, why
should information be reliable, relevant,
consistent, and comparable?
In other words, why are these accounting
characteristics important?
What kinds of problems could be created
if a financial report is not reliable, relevant,
consistent, or comparable?
It is extremely vital that the company has
accurate financial reporting. This information
determines whether or not to invest in your
company's stock. This information will help them
decide if it is profitable to invest or not to invest
in your company based what is in your financial
history. The information must be relevant
because it will help the company, investors and
lenders make decisions. It helps answer
questions like, "how stable is your company", or
"what future does this company have". The
information should be reliable. In other words
the information that is reported must be able to
be verified, backed up with truthful information.
Comparable occurs when different companies
use the same accounting principles. This makes
it much easier to compare results between
company's. Consistency happens when the
company uses the same accounting method
every year. When the financial statements are
reported each year, it paints a financial picture of
where the company is headed now and in the
future.
What kinds of problems will occur if the

information does not include these things?
Falsified or manipulated statements doesn't only

effect the company but it also to name a few
effects the lenders, creditors, investor's, etc.
This will result in the company not having a
faithful representation.
Another response
The main objective of generating financial
information is providing useful information that
can be used in decision-making... only if this
information is relevant, reliable, comparable,
and consistent, can it be useful for decision
makers. (Kieso, 2003).
Relevance gives a basis for making decisions
that will impact the future of a business, and it
confirms and corrects expectations from the
past. If the information makes a difference in
making decisions, it is relevant.
Reliability means that the information can be
depended on and it can be proven to be free of
error, and the information is factual. The
information cannot favor one set of users over
another. CPAs audit financial statements to
ensure reliability.
Comparability is also an important characteristic
of financial reporting... this happens when
different businesses use similar accounting
principles, making it much easier for one to
compare companies, and the method used in a
business must be disclosed to the users of the
information to enable the users to convert the
information as accurately as possible.
Consistency simply means that the business uses
the same accounting principles on a yearly
basis... consistently. This helps decision makers
analyze a company's trends. A company can
change the methods used if they can justify the
change, showing that the new method is more
useful for analysis. If the method is changed, it
must be disclosed in the notes that go with the
statements to show users a lack of consistency.
These characteristics are very important to a
business... decisions cannot be made based on
incorrect information, and everyone involved in a
business venture of any kind, whether they be
management, owners, or investors and creditors,
as well as consumers, etc. must be able to rely
on the financial information provided in order to
make any type of decision. Without this
information, it is difficult to imagine any
business succeeding, even for a short time.
Examples of problems that could occur without
reliable, relevant, consistent, or comparable
information includes not being able to get loans
or investments; management could make
decisions that cause irreparable damage to
entire operations, consumers could easily lose
faith and cut their ties... the possibilities are
endless for companies that lack these qualities in
their financial reporting.
DQ2
For Discussion Question 2: Post your response to
the following:
How does information from financial
reports influence business decisions?
Why is it important for business managers
to understand the information found on financial
reports?
How does information from financial reports

influence business decisions?
Once the information from the financial reports

have been posted then a team will review the
company's financial history to see what decision
were profitable or not. The decisions that were
made previous to the financial reports being
posted will show which way the company needs
to go to continue to remain #1.
Why is it important for business managers to

understand the information found on financial
reports?
IT is extremely important for he business

managers to understand the information found
on the financial reports. The business managers
are going to be the people that are going to
make decisions for the company. They need to
know how to interpret the financial reports and
come up with different strategies that will
continue to make the company money.
Another response
The information from financial reports influences
business decisions because it shows where the
company stands. The managers use the
information from the financial report compared
to the current year from the previous year,
whether the company growths or losses. It is
very important for business managers to
understand the information found on financial
reports because the information from the
financial reports enables business managers to
see how to improve and keep the business
afloat. It also gives business managers an insight
what came in and went out and the total
operating cost of the company as well as cutting
cost in a certain areas. The information from the
financial reports helps the manager manages the
business accurately.

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ACC 291 Entire Course and Final Guide

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ACC 291 is a online tutorial store we provides ACC 291

Differentiating Depreciation Methods

There is one main difference between straight line

ACC 291 Final Exam Guide (New)

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Based on what you know about accounting, what role

The manager's purpose is to manage by making stable

ACC 291 Final Exam Guide

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Cost, Volume, and Profit Formulas

Due February 28, 2010

Explain the components of cost-volume-profit analysis.

The components of cost volume-profit analysis consist of Level or

What does each of the components mean?

Level or volume of activity is the activity that causes change or

Contribution margin is the amount of revenue left over after

Illustrate your explanation with an example from a fictitious

Kellys Sweetheart Flowers

The owner of Kellys Sweetheart Flowers is selling their bouquet of

Kellys Sweetheart Flowers

Define contribution ratios

The contribution margin ratio is the contribution margin per unit

What happens to contribution ratios as one of the components

Shown in the example above, if one or more of the components

//http:yourdictionary.com /CVP.org Retrieved 2/26/2010

Thomas, Y. 2005-08-27 Accounting 101 pg. 52 Statement

ACC 291 Final Exam Guide

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7 How should mixed costs be classified in CVP analysis? What

According to our class materials all mixed cost must be classified

9. Cost volume profit CVP analysis is based entirely on unit costs.

In my opinion when it comes to making financial decisions for the

ACC 291 Week 1 Assignment Comparative Analysis Problem

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Budget Definition Desc

Production budget A production of units needed to be Shows manage

Direct materials budget Is the estimated quantity or cost of Shows manage

Direct labor budget A estimate of cost and quantity of Shows how ma

Budgeted income statement Estimate of expected profitability of Is a very impor

Cash budget A projection of expected cash flows Cash budget he

ACC 291 Week 1 Discussion Question 1

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Discussion Question 1: Post your response to the following:

You know how important it is to create budgets for your

Budgeting is a very important skill that can be applied to everyday

In a business, a budget helps a business make good decisions because

Discussion Question 2: Post your response to the following:

What are some of the different types of budgets?

Describe in detail one type of budget covered in the text.

Describe what the budget is used for and what information it

Then, as you respond to your classmates, discuss how the

Discuss how a business benefits from each of the budgets.

I chose to write about the Production Budget. The Production Budget

Budget sales units + Desired ending finished goods units - Beginning

ACC 291 Week 1 Discussion Question 2

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What is a Flexible budget?

A Flexible budget is a budget that change or is flexible during

The steps to development a flexible budget is :

a) Identify the activity index, and the range of activity

d) Organize the budget for selected additional activity within the