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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 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?
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.
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ACC 291 Final Exam Guide
we have another New set of Final Exam Guide which could be found
on this link
Financial Statements
Income statement is a financial statement that shows how much

money is coming from product sales and services prior to any
expenses being taken out. Both internal and external users such as
managers and investors are able to access this. For example, if a
investor wanted to see if the company made money or lost money they
would use this financial statement report.
Balance sheet shows what condition the company is currently in.
whereas the other financial statements only came monthly or
annually. For example, what if the management planning team
wanted to see the company's current assets, ownership equity and
liabilities? All they have to do is run the balance sheet report.
CVP income statement or Cost Volume statement reports or monitors
the effects of the changes in cost and volume when it comes to the
company profits. For example, I work at a manufacturing plant for
roofing shingles. The CVP analyst studies the cost which includes but
not limited too, manufacturing, material, labor cost. This financial
statement report would help the management team budget the cost of
manufacturing goods.
Statement of cash flow tracks the movement of cash coming in or out
of the business. This financial statement will show if the company
made cash or not, or if the net income increased or decreased. For
example, the owner or the management department will use this to
determine if the company has earned enough money to be able to for
any expenses.
Retained earnings statements is a percentage that is kept by the
company to be reinvested or to be used to pay debts. For example, if a
company was looking to expand their business by purchasing top of
the line equipment they can use this statement to see how much money
the company has put away.
References:
http://www.investopedia.com/terms/r/retainedearnings.asphttp://finan
cial- Retrieved 2/18/2010
statements.suite101.com/article.cfm/financial_statements_the_p_l.
Retrieved 2/18/2010
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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? 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.
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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: 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_profi
ts*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
Statements
--------------------------------------------------------------
ACC 291 Week 1 Discussion Question 1
How would you describe the entries to record the disposition of
accounts receivables?
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.
--------------------------------------------------------------
How are bad debts accounted for under the direct write-off
method?
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 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
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.
--------------------------------------------------------------
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.
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.
--------------------------------------------------------------
ACC 291 Week 2 Assignment Financial Reporting Problem,

Apple Inc
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: 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.
--------------------------------------------------------------
What are the differences among valuation, depreciation, amortization,
and depletion?
Is it appropriate to calculate depreciation using two different
methods? Why?
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
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
--------------------------------------------------------------
What types of industries have unearned revenue?
Why is unearned revenue considered a liability?
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:
Net Income
$1,300,000
$1,250,000
$1,200,000
$1,150,000 Net Income
$1,100,000
$1,050,000
$1,000,000
$950,000
2006 2007 2008
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:
Debt ratio as percent of total asset
55.80%
55.70%
55.60%
55.50% Debt ratio as percent
55.40% of total asset
55.30%
55.20%
55.10%
55.00%
54.90%
2007 2008
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:
Debt as percent of total equity

127.00%
126.50%
126.00%
125.50% Debt as percent of
125.00% total equity
124.50%
124.00%
123.50%
123.00%
122.50%
2007 2008
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.
--------------------------------------------------------------
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
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.

STATEMENT OF CASH FLOW ANALYSIS
STARBUCK HARELY
S 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
STARBUCKS
2008 2007 2006
Net Income/Starting Line 315.5 672.64 564.26
1258.7 1131.6
Cash from Operating Activities 0 1331.22 3
-
1086.6 -
Cash from Investing Activities 0 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 1043.1
Line 0 933.84 5
Cash from -
Operating Activities 684.65 798.15 761.78
Cash from -
Investing Activities 393.25 391.21 -35.26
Cash from -
Financing 1293.3 1037.8 -
Activities 9 0 637.02
Net Change in
Cash 190.70 164.46 97.42
Net Cash -
Beginning Balance 402.85 238.40 140.98
Net Cash - Ending

Balance 593.56 402.85 238.4
RITE AID
2008 2007 2006
-
Net Income/Starting 1078.9 1273.0
Line 9 26.83 1
Cash from Operating 309.1

Activities 79.37 5 417.17
- -
Cash from Investing 2933.7 312.7 -
Cash from Financing 2903.9 -

Activities 9 33.72 272.84
Net Change in Cash 49.61 30.08 -86.75
Net Cash -
Net Cash - Ending 106.1

Balance 155.76 5 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
Starbucks operating cash flow has gone up in 2007 and decreased a little in 2
previously was doing well. The net loss in cash at end of year is decreasing f
gain.
Harley Davidson's operating cash flow has significantly decreased from 2007
decrease in cash from operating activities is probable from the lack of inform
many people buying at this point could have an effect on why the net income
reflect a positive gain.
Rite Aid's operating cash flow has taken a significant decrease as well from p
from financing, the net change in cash is better than it has been in previous y
medical supplies. This also could reflect the expansion of the company.
--------------------------------------------------------------
ACC 291 Week 2 IndividualWileyPLUS PracticeCh 8,9,10

Quiz
Resource:WileyPLUS
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 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.
Lucent Technologies
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 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

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.

--------------------------------------------------------------
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
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.
--------------------------------------------------------------
Why does a company choose to form as a corporation?
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/dividendpayoutrat
io.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&submi
t=Search
--------------------------------------------------------------
Why is preferred stock referred to as preferred?
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.h
tm
Mladjenovic, P. (2009). Stock Investing for Dummies. Dummies.
--------------------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Assignment
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.
--------------------------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.

11,12
Resource:WileyPLUS
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.
--------------------------------------------------------------
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.
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 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.
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.
Reference
Axia College. (2007). Statement of Cash Flows.

Retrieved June 14, 2010 from Axia
College, Week Six, ACC 230.
--------------------------------------------------------------
Why are companies required to prepare a statement of cash flows?
Why is the statement of cash flows divided into three sections?
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.

(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.

STATEMENT OF CASH FLOW ANALYSIS
STARBUCK HARELY
S 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
STARBUCKS
2008 2007 2006
Net Income/Starting Line 315.5 672.64 564.26
1258.7 1131.6
Cash from Operating Activities 0 1331.22 3
-
1086.6 -
Cash from Investing Activities 0 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 1043.1
Line 0 933.84 5
Cash from -
Operating Activities 684.65 798.15 761.78
Cash from -
Investing Activities 393.25 391.21 -35.26
Cash from -
Financing 1293.3 1037.8 -
Net Change in
Cash 190.70 164.46 97.42
Net Cash -
Net Cash - Ending

Balance 593.56 402.85 238.4
RITE AID
2008 2007 2006
Net Income/Starting - 26.83 1273.0

Line 1078.9
9 1
Cash from Operating 309.1

Activities 79.37 5 417.17
- -
Cash from Investing 2933.7 312.7 -
Cash from Financing 2903.9 -

Activities 9 33.72 272.84
Net Change in Cash 49.61 30.08 -86.75
Net Cash -
Net Cash - Ending 106.1

Balance 155.76 5 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
Starbucks operating cash flow has gone up in 2007 and decreased a little in 20
previously was doing well. The net loss in cash at end of year is decreasing fro
Harley Davidson's operating cash flow has significantly decreased from 2007.
in cash from operating activities is probable from the lack of information suppl
buying at this point could have an effect on why the net income is decreasing.
gain.
Rite Aid's operating cash flow has taken a significant decrease as well from pre
financing, the net change in cash is better than it has been in previous years. R
supplies. This also could reflect the expansion of the company.
--------------------------------------------------------------

What are some common ratios used to analyze financial information?
Which are the most important?
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 4 Individual WileyPLUS Assignment

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.
--------------------------------------------------------------
ACC 291 Week 4 IndividualWileyPLUS Practice
Resource:WileyPLUS
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.
--------------------------------------------------------------
Discuss the objectives for Week Four. Your discussion
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 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
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.
f) --------------------------------------------------------------
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.
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.
--------------------------------------------------------------
Why do corporations buy back their own stock?
What does it tell you about the corporation?
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/isuppli.sees.apple.at.34
pc.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/results/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/?p=2107
--------------------------------------------------------------
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 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 WalMart 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/statemnt.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 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)
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.
--------------------------------------------------------------
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.
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.
--------------------------------------------------------------
Discuss the objectives for Week Five. Your discussion
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
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