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For Discussion Question 1: Post your response to
the following:
When reviewing a financial report, why should
information be reliable, relevant, consistent, and
comparable?
In other words, why are these accounting
characteristics important?
What kinds of problems could be created if a
financial report is not reliable, relevant, consistent, or
comparable?
It is extremely vital that the company has accurate
financial reporting. This information determines
whether or not to invest in your company's stock. This
information will help them decide if it is profitable to
invest or not to invest in your company based what is
in your financial history. The information must be
relevant because it will help the company, investors
and lenders make decisions. It helps answer questions
like, "how stable is your company", or "what future
does this company have". The information should be
reliable. In other words the information that is reported
must be able to be verified, backed up with truthful
information. Comparable occurs when different
companies use the same accounting principles. This
makes it much easier to compare results between
company's. Consistency happens when the company
uses the same accounting method every year. When
the financial statements are reported each year, it
paints a financial picture of where the company is
headed now and in the future.
What kinds of problems will occur if the information

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

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

business decisions?
Once the information from the financial reports have

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

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

understand the information found on the financial
reports. The business managers are going to be the
people that are going to make decisions for the
company. They need to know how to interpret the
financial reports and come up with different strategies
that will continue to make the company money.
Another response
The information from financial reports influences
business decisions because it shows where the
company stands. The managers use the information
from the financial report compared to the current year
from the previous year, whether the company growths
or losses. It is very important for business managers to
understand the information found on financial reports
because the information from the financial reports
enables business managers to see how to improve and
keep the business afloat. It also gives business
managers an insight what came in and went out and
the total operating cost of the company as well as
cutting cost in a certain areas. The information from
the financial reports helps the manager manages the
business accurately.
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ACC 291 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?
Internal Cash Control
By
Kamilah Crooms
Accounting 220
Jess Stern
Internal Cash Control
The accounting department receives from sales

invoices once a month. Most of the information
is missing on the invoices.
The accounting department relies on each department

within the company and all the information has to be
submitted completely and in a timely matter. In this
scenario most of the information that has been turned
in has information that is missing on the invoices. I
would say that the internal controls that are not being
followed are Documentation procedures. Company
documentation is very important and must be turned in
complete. These documents show proof of delivery or
proof of services to the customer. Any incomplete
documents can be very costly and can cause a delay in
the company being paid for any services rendered. For
example, one of the requirements in a transportation
department is to make sure that the drivers verify the
load and sign for the load prior to leaving the yard,
these documents says that the load left in good
condition. Well, it so happened that we allowed a driver
to leave without signing the paperwork. This caused a
delay in accounting because we had to get signatures
from the driver and the customer which took a month
later to complete.
Rob, Sue, and Bob use the same cash register at

the donut shop.
Rob, Sue, and Bob all use one register has often turned
into not the best decision ideally for the company. It
can increase the risk for the drawer being short and it
will be hard for the company to find out which
employee or employees had shorted the register. The
internal controls that are not being followed are
Establishment of responsibility. Happens when the
company assigns one person to be in control of a
specific job or have authority to make decisions (pg
161 Internal Control and Cash). When the company
signs one person to be responsible over the register it
will allow the company to hold that one person
responsible for any shortages.
Sam does the ordering of materials at the
beginning of every month and pays the bill.
In this case Sam is ordering materials and paying all
the bills. This process is actually known as related
activities (pg 162 Internal Control and Cash). This
occurs when one person is doing two different
responsibilities just like Sam. The internal Control that
is not being applied is Segregation of Duties. It is better
for the two to be a separate responsibility because it
will minimize the billing errors.
Bank reconciliations are done by the person who

is responsible for all cash responsibilities.
The problem with this scenario is that the same person

is responsible for all cash responsibilities, why is this
person doing the only one that does this job? Having
one person take on such a major responsibility
increases the chances of embezzlement and thief. The
internal control that is not being applied is rotating
employees duties and requiring employees to take
vacations. One person should not be completely in
control of one job, the company should encourage
vacations or switching positions to prevent incorrect
handling of the companys valuable information.
New checks came in and are left on the shelf

with other supplies.
This is a tough scenario because there are all sorts of

internal controls that are not being used in this case. I
would say in my opinion that the first internal control
that comes to my mind that is not being applied is
bonding of employees who handle cash.
Every employee that works near or with expensive
equipment should be held reliable or responsible for
the companys assets. Bonding of employees who
handle cash protects the company by insuring that the
employee is or isnt a risky applicant (background
checks) or reassuring that the employee that they will
be prosecuted to the fullest extinct if they are found
guilty of thief. For example, I had worked at Mc
Donalds and
there were my shift managers and one employee that

were caught with stealing money from the company.
This situation had happen very differently. The armor
truck dropped off a deposit that belonged to another
company (armors mistake) but they signed it. Those
employees thought that nothing was going to be traced
back to them but the little did they know, all evidence
traced back to them. They each received jail time, and
felony records.
Everyone has access to the computer system and
the last audit was seven years ago by the former
accountant
This scenario has two things that are going on at the

same time. I will first start off with the computer
system and how everyone has access to the computer.
The internal control that is not being applied is
Physical, Mechanical, and Electronic Controls. This
allows the company to control assets through physical
or electronic based systems or programs. It is
extremely important for a company to invest in
computer or informational protection for the company
and for their employees. Todays technology age most
companies are investing in a computerized program.
This will help protect from internal errors and external
protection. For example, all companies invest in a virus
protection this will ensure that the companys
information is protected and not in the wrong hands.
Invest idle cash

Invest idle cash occurs when any excess funds or cash
needs to be invested. The money should be highly
invest and risk free. For example, a major company
should make investments with their assets into
profitably investments and risk free.
Plan the timing of major expenditures
This is when a company sets aside money for major
cash needs. We live in a world that things happen daily.
A good company would set aside emergency funds. For
example, during a terrible thunderstorm, the winds
practically ripped off the roofing shingles off a
commercial business. The company will be able to use
the money for emergency.
Delay payment of liabilities
Delay payment of liabilities is when a company pays
bills not too soon and not late. This allows the company
to have money available for bills that that really need
to be paid allowing excess funds to be free for other
uses.
Keep inventory levels low
This occurs when the company keeps the inventory low
so that it will bring in more profits. For example, if the
managers at a fast-food over plan and fix too many
hamburgers and the customers dont buy it, then the
food will go bad and the company will lose profit.
Increase the speed of collection on receivables

This occurs when money is owed to the company, the
company cannot claim these until the funds have been
received. Some companies offer incentives to
encourage customers to pay early or on time. For
example, my job encourages their customers by letting
them know that there will be a price increase on or
after a certain date and this really works because the
customers want to pay at a lower price.
References:
http:yourdictionary.com /accounting_statements.org
Retrieved 2/13/2010
Thomas, Y. 2005-08-27 Accounting 101 pg. 52
Statements
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ACC 291 Final Exam Guide 1

we have another New set of Final Exam Guide which could be found
on this link
Financial Statements
Axia College Material
Appendix B
Cash Management Matrix
Directions: Using the matrix, list how each of the principles of internal control works, and give an
example for each. Next, list how each of the principles of cash management works, and give an
example for each.
Principles of Internal Control How it Works

Establishment of responsibility Happens when the company assigns My job, Our Sa
one person to be in control of a specific the only one th
job or have authority to make restocking fee
decisions.
team to be in
customers retu
Segregation of duties This is when the company has more A church- You h
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 deliv

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
Physical control
guard, they req
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

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

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 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://fina
ncial- Retrieved 2/18/2010
statements.suite101.com/article.cfm/financial_statements_the_
p_l. Retrieved 2/18/2010
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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 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 Discussion Question 1

How would you describe the entries to record the disposition of
accounts receivables?
Cost, Volume, and Profit Formulas
By
Kamilah Crooms
Due February 28, 2010
Explain the components of cost-volume-profit analysis.
The components of cost volume-profit analysis consist of Level or

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

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

contribution margin per unit when unit selling prices increase?
Contribution margin is the amount of revenue left over after
subtracting the variable cost. So basically Unit sales price
subtracting or minus variable cost.
Illustrate your explanation with an example from a fictitious

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

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

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

changes is will cause the net income to increase or decrease.
Reference
statements.suite101.com/article.cfm/cost_volume_profits*the_p_l.
Retrieved 2/28/2010
//http:yourdictionary.com /CVP.org Retrieved 2/26/2010
Thomas, Y. 2005-08-27 Accounting 101 pg. 52 Statements
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How are bad debts accounted for under the direct write-off method?
7 How should mixed costs be classified in CVP analysis? What
approach is used to effect the appropriate classification?
According to our class materials all mixed cost must be classified into
their fixed and variable and variable elements. The method that can
be used to determine is called the high/low method. To determine the
variable cost the analysis takes the total cost and divide it with the
low activity level. To get the fixed cost then the company would have
to subtract the total variable with either the high or low activity level.
9. Cost volume profit CVP analysis is based entirely on unit costs. Do
you agree? Explain.
In my opinion when it comes to making financial decisions for the
company, often times more than one method is used. Cost volume
profit is also based on Volume or level activities, unit selling prices,
variable cost per unit, total fixed and sales mix.
14. You can find the break point in dollars by drawing a horizontal
line to the vertical axis. I you want to find the break even point in
units it will be a vertical line from the break even point to the
horizontal axis.
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ACC 291 Week 1 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
Axia College Material
Appendix C
Budgets Matrix

Directions: Using the matrix, define each of the
budgets listed and briefly describe its uses.
Budget Definition Descri
Sales budget Estimate of the The sa

expected sales for shows
the period. All of units.
the other budgets allow
depend on the to see
sales budget. This units w
is where all the produ
other budgets will period
start from
Production budget A production of Shows

units needed to manag
be produced in many
order to meet the produ
projected sales each b
period
amoun
to fulfi
deman
Direct materials Is the estimated Shows

budget quantity or cost of manag
the raw materials much
that is needed in mater
order to produce alread
the units required and or
to fulfill inventory to be
meet
deman
Direct labor A estimate of cost Shows

budget and quantity of hours,
direct labor labore
needed in order to produ
meet production for tha
period
Manag
decide
the rig
of labo
and if
will be
meet
Manufacturing An estimated This li

overhead budget expected amount overh
of manufacturing involv
cost for the disbur
budget period quarte
Selling and Anticipated Shows

administrative selling and budge
expense budget administrative that a
expenses in the other
budget period manuf
Expen
marke
promo
for the
period
Budgeted income Estimate of Is a ve
statement expected tool b
profitability of shows
operations in a compa
budget period estima
for the
period
Cash budget A projection of Cash b

expected cash manag
flows in and out a tally
of the business. all cas
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ACC 291 Week 2 - Fordyce and Atwater (New)

P10-5A
Fordyce Electronics issues a $400,000, 8%, 10-year mortgage note

on December 31, 2007. The proceeds from the note are to be used in
financing a new research laboratory. The terms of the note provide
for semiannualinstallment payments, exclusive of real estate taxes
and insurance, of $29,433. Payments are due June 30 and December
31. 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?
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?
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 Individual WileyPLUS Assignment Week

Two

we have another New set of week 2 Willeyplus assignment which
could be found on this link
Costco Wholesale Corporation

If we look at the financial statements of the company we can find that
the company is financially strong. Its strength are:
1. It has enough amount of current asset to repay its current
liability. The current ratio of the company 8.18 indicates that
the company has $8.18 liquid asset to repay its $1 of current
liability.
2. The operating cost of the company is increasing because the
company is able to reduce its expenses.
3. Cash from operating activity has increased for the company.
Apart from this strength the company also has some weakness in its
financial statement:
(i) Increasing inventory indicates that the company inventory
conversion period is increasing.
(ii) The cash from investing activity shows that the company cash
outflow is more in the short term investment i.e. in non
operating activity.
(iii) The overall has for the year 2008 has declined for the
company.
Net Income:
If we look at the trend in net income of the company we can find that
the company net income looks fluctuating but it has improved it net
income in 2008 as compared to 2007.
Debt ratio as a percentage of total assets:
If we look at the debt ratio as percent of total asset we can find that
the debt ratio is declining in 2008 as compared to 2007 i.e. the
company is increasing equity to finance debt.
Debt as a percentage of total equity:
As we can see that the debt as percent of total equity is declining in

2008 as compared to 2007 i.e. the company is increasing equity in its
capital structure.
As we can see that there is nothing negative in 2008 for the company
and this is the reason it has positive trend as compared to 2007.
Hence there is no need to correct anything for the company.
--------------------------------------------
ACC 291 Week 2 IndividualWileyPLUS PracticeCh 8,9,10

Quiz

Resource:WileyPLUS
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.
--------------------------------------------
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
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 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.

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 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/dividendpayout
ratio.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 does a company choose to form as a corporation?
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.
--------------------------------------------

Why is preferred stock referred to as preferred?
What are some of the features added to preferred stock that make it
more attractive to investors?
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 Assignment

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.
--------------------------------------------
ACC 291 Week 3 Individual WileyPLUS Practice Quiz Ch.

11,12

Resource:WileyPLUS
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.
--------------------------------------------

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.
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.
--------------------------------------------
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.
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 are companies required to prepare a statement of cash flows?
Analyzing Statements of Cash Flows
4.8. Research Problem
Choose five companies from different industries and locate their

statements of cash flows
for the most recent year.
(a) Create a table to compare the dollars provided or used by

operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
(b) Create a second table for each company comparing this same
information for each of the three years presented in that companys
statement of cash flows. Include an additional column that looks at
the combined cash flows for all three years.
(c) Write a short analysis of the information gathered. Your

discussion should address, among other things, whether cash flow
from operating activities is large enough to cover investing and
financing activities, and if not, how the company is financing its
activities. Discuss differences and similarities between the companies
you have chosen.
(a) Create a table to compare the dollars provided or used by

operating, investing, and financing activities, as well as the overall
increase or decrease in cash.
STATEMENT OF CASH FLOW ANALYSIS
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
(b) Create a second table for each company comparing this same
information for each of the three years presented in that companys
statement of cash flows. Include an additional column that looks at
the combined cash flows for all three years.
STARBUCKS
2008 2007 2006
Net Income/Starting Line 315.5 672.64 564.26
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 -
Activities 4 8 231.08
Cash from Financing 2903.9 -

Activities 9 33.72 272.84
Net Change in Cash 49.61 30.08 -86.75
Net Cash -
Beginning Balance 106.15 76.07 162.82
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
companies you have chosen.
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
Complete the WileyPLUS Week Four Practice Quizzes
for chapters 13 and 14.
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
should include the topics you feel comfortable with,
any topics you struggled with, and how the weekly
topics relate to application in your field.
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.
--------------------------------------------
ACC 291 Week 4 Wileyplus Assignment Do It! 11-1, E11-5,
E11-7, BYP11-1, BYP11-2, P11-5A, P11-8A (New)

Do It! 11-1, E11-5, E11-7, BYP11-1, BYP11-2,
P11-5A, P11-8A.
Do It! 11-1
Exercise 11-5 Garcia Corporation
Exercise 11-7 Pele Company
Broadening Your Perspective 11-1 Tootsie Roll

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.34pc.world.market.share/
Hardware Marketplace. (2010). Computer Hardware. Retrieved July 2, 2010
from
http://www.hardwaremarketplace.com/computer-hardware/
msn.com. (2010). Apple Inc: Key Ratios. Retrieved July 2, 2010 from
http://moneycentral.msn.com/investor/invsub/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
--------------------------------------------

Why do corporations buy back their own stock?
Financial Analysis
Wal-Mart Stores Incorporated operates chain of retail stores in

USA as well as outside the USA. The first Wal-Mart store was
opened by Sam Walton in Arkansas in USA in 1962. Within a
span of five years; he opened more stores and he number
increased to 24 stores across Arkansas. The incorporation of
Wal-Mart Stores Incorporated was done in 1969. Wal-Mart
grew in the United States of America by opening of more stores
in to the country. The company not only opened the stores
across Arkansas but also across the United States of America
(Wal-Mart Corporate, 2010).
Wal-Mart was opposed by the unorganized retail business

holders in the USA as their business was affected by opening
Wal-Mart stores. The company also opened its first store outside
the USA in South America in 1995. Wal-Mart wanted to spread
itself not only to the USA, but in other countries as well. In
2006, the company was having 3800 stores in USA and more
than 2980 stores outside USA making it one of the largest retail
chains in the world. This corporation was also having a vision
to establish itself in to a global entity. Wal-Mart was one of the
first companies to operate in the organized retail sector
(Fishman, 2006). The modes of entry used by the company were
different for different countries. Wal-Mart used the mode of
entry in to various countries according to the rules and
regulations prevailing in to that country (Wal-Mart Stores Inc:
Financial Statement, 2010).
The sales of the company for the financial year ending in

January 2010 are 413.8 billion dollars and income for the same
period is 14.7 billion dollars. The quarterly sales growth for the
company has been 5.90%, while the industry average is 6.80 %.
The five-year annual growth in the sales of the company has
been recorded at 7.50 % while five year annual growth of
income is 6.58 %. By analyzing the financial statements of Wal
Mart Incorporated, we find that debt equity ratio of Wal-Mart is
0.71 on 31st January 2010, which is 0.68 for the industry. It
means the proportion of debt of the company in its capital
structure is lesser than the equity. The company is less
leveraged so the interest burden on the company is minimal.
Wal-Mart has capacity to borrow from the market for its
CAPEX in the future. The interest coverage ratio is 13 times in
January 2010, which is 21.9 for the industry. Wal-Mart needs to
improve profitability to improve interest coverage ratio for the
reduction of risk of the lenders of the company (Wal-Mart Stores
Inc: Financial Statement, 2010).
The total revenues received by the organization in the year

ending January 2010 were $408.2 billion whereas revenues in
the year ending January 2009 were $404.3 billion dollars. The
revenues in the year ending January 2008 stood at $377 billion
dollars. Thus, it can be easily analyzed that the total revenues of
the organization has grown over the years steadily. This has
also impacted the net income of the organization and thus,
increments could also be seen in the net income of the
organization. Net Income, which stood in the year ending 2008
at $12.7 billion, increased to $13.4 billion for the year ending
2009 and again increased to $14.3 billion in the year ending
2010 (Wal-Mart Stores Inc: Financial Statement, 2010).
Again if cash flow statement of the organization is analyzed it

can easily be viewed that the cash flow from operating activities
have always increased from the last three years. The cash flow
from operating activities stood at $20.6 billion in the year
ending 2008 has increased to $23.1 billion for the year ending
2009 and too further increased to $26.2 billion for the year
ending 2010. But the cash flow from investing and financing
activities has seen positive and negative fluctuations both. Here
where net cash outflow from investing activities has decreased
first and increased later again. For the year ending 2008, it
stood at $15.6 billion which decreased to $10.7 billion but
again increased to $11.6 billion. Again the net cash outflow
from financing activities increased constantly since at the end of
year 2008, it stood at $7.4 billion which further for the year
ending 2009 increased to $9.9 billion and further increased to
$14.1 billion for the year ending 2010 (Wal-Mart Stores Inc:
Financial Statement, 2010).
Wal-Marts return on equity has improved in the last three years,

which is a good sign for the shareholders of the company. It was
19.9% in January 2008, which increased to 20.3 % in 2009 and
then again marginally increased to 20.4 % in 2010. The return
on asset has also shown the same trends in the last three years.
In 2008 the return on asset was 7.9 %. It increased to 8.1 % in
2009 and then further increased to 8.4 % in 2010. It shows the
increase in the efficiency in the utilization of the assets of the
company. The net profit margins have been almost the same in
the last three years in the company. It was 3.4 % in 2008, 3.3 %
in 2009 and 3.5 % in 2010 (Wal-Mart Stores Inc: Financial
Statement, 2010).
The price to sales ratio and price to book value ratio have
shown negative trends in the last three years, which shows that
the stock of the company is available at cheap price as compare
to the price it was carrying three years back. The price to sales
ratio, which was 0.55 in 2008, was decreased to 0.46 in 2009
and then improved to 0.51 in 2010. Similarly, price to book
value ratio reduced from 3.12 in 2008 to 2.83 in 2009 and then
improved marginally to 2.86 in 2010. This represents the better
opportunity available for the shareholders to invest in to the
stock of the company. The book value per share of the company
has also increased in the last three years. It was 16.26 dollars
per share in 2008, which increased to 16.63 dollars per share in
2009 and further improved to 18.69 dollars per share in 2010.
This represents the increase in the retained earnings of the
shareholders in the company (Shim & Siegel, 2007).
Wal-Marts current assets level has shown stability in the last
three years for the company, which shows the lesser investment
in current assets for the company even with the increased sales.
In 2008 the cash and marketable securities available with the
company was 48020 million dollars, which increased to 48949
million dollars in 2009 and then decreased to 48331 million
dollars in 2010.
Quantitative Analysis holds huge significance while evaluating

the financial health of the organization. Three types of
techniques are used for quantitative analysis. The three
techniques are trend analysis, common-size analysis and ratio
analysis. Trend analysis is one of the significant quantitative
analysis tools that assist in analyzing the financial health of the
company as compared to its previous years. The year on year
trends in the financial statements are studied to analyze whether
organization is improving upon its past performance or it is
further going down (Brigham & Houston, 2007).
Common-Size analysis is another quantitive analysis tool again

one of another tool that helps in making evaluation of the
financial health of the company as against its competitors. The
financial statements of the company and its industry competitors
are compared by taking a common base and then performance
is analyzed as against the competitors. It helps in knowing
whether the organization is performing better than its
competitors or not. Ratio analysis is also used to evaluate the
financial statements of an organization. This analysis is used to
interpret the performance shown in the financial statements of
the organization. The ratio analysis helps the organization
compare performance over the years or in the same year
(Brigham & Houston, 2007).
Quantitative Analysis is used by the company and its

stakeholders to analyze the financial performance of the
organization. Trend analysis is used by the company, the
shareholders and the investors to analyze the performance of
the company over the years. Common-Size analysis is used by
the competitors, management, and investors to evaluate the
organization that is performing better whereas ratio analysis is
used specifically by all the stakeholders to interpret clear and
well defined results shown in the financial statements of the
company (Brigham & Houston, 2007).
These techniques help to evaluate the liquidity or short-term

solvency. By using current ratio, one can analyze the
effectiveness of the liquidity position of the organization.
Profitability of the organization is also analyzed through
profitability ratios, common-size analysis, as it helps to know
the organizations profits earned by the company as compared
to others. Trend analysis and ratio analysis with the help of
different asset turnover ratios and trends could easily analyze
that assets are effectively used or not (Brigham & Houston,
2007).
Wal-Marts current stock price is 50.56 dollars. The stock has

gone up as high as 56.27 dollars, and as low as 47.35 dollars in
the last year. The earnings per share of the company which was
3.16 dollars per share in 2008, was increased to 3.35 dollars in
2009. Earnings per share further increased to 3.76 dollars in
2010. The analysis shows the improvement in the earnings of
the company in the last three year. The current price earnings
ratio of the company is 13.2 which is less than the industry
average of P/E ratio of 15 times (Wal-Mart Stores Inc (WMT),
2010).
Analyzing the stock of the company from the investment point of

view, we can estimates that the fundamentals of the company are
very strong. The stock has return on equity, return on assets
better than the industry average of 22.9 % and 9.1 %
respectively. The company has given a better annual average
return on asset and return on equity in the last five years as
compared to the industry. The company has a debt equity ratio
and net profit margin, which is less than the industry. However,
Wal-Mart is improving on the efficiency front. As a result, Wal-
Mart stock is recommended for investment.
References
Brigham, E.F. & Houston, J.F. (2007). Fundamentals of

Financial Management. (11th ed.). Cengage Learning.
Fishman, C. (2006). The Wal-Mart Effect: How the World Most

Powerful Company Really Works-- and How it's Transforming
the American Economy. Penguin Group
Shim, J.K. & Siegel, J.G. (2007). Schaum's Outline of Financial

Management. (3rd ed.). McGraw-Hill Professional.
Wal-Mart Corporate. (2010). History. Retrieved July 25, 2010

from http://walmartstores.com/AboutUs/297.aspx
Wal-Mart Stores Inc: Financial Statement (2010). Retrieved

May 31, 2010, from
http://moneycentral.msn.com/investor/invsub/results/statemnt.as
px?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 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.

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 Individual WileyPLUSAssignment

we have another New set of week 5 Willyplus assignment
which could be found on this link
Based on what you know about accounting, what role do you

see it playing in business operations? How dependent do you
think a business is on its accounting department? Why?
Accounting plays many important roles especially when it
comes to business operations. Accounting is mainly responsible
for almost all of the financial needs of the business. It keeps
track of all spending, profit and loss that the company inquires.
The business is very dependent on it accounting department.
Accounting department is responsible for monitoring more than
the cash flow, it also works closely with IRS, government to
make sure that everything is being done correctly (payroll,
taxes, etc). The accounting side of the business can be
considered to be the lungs of the company next to the heart.
Why are ethics so important in the field of accounting?

Wow where should I start? First of all the when dealing with
accounting there must be consistent clear
communication between the business and the accounting
department. Honesty is always the best policy. Good
ethnics keeps the business running at its top level. The
company's personal information, employee information could be
given to the wrong hands and it can destroy the company. A
good accounting department has way too much to lose and they
will not want to risk a horrible reputation in the field.
Another response
People bring all their financial information to an accountant
who in turn looks through all of it with a fine tooth comb.
People need to know that they can trust this person with all of
their personal information. Most licensed professionals swear to
a code of ethics, whether they follow them or not is up to that
professional. Unfortunately there are many out there that do
not and they ruin the trust for other professionals. Accountants
really need to have the trust of their clients being that they work
with peoples taxes and finances and need much information
from their clients.
Another response
Ethics are important in the field of accounting for several
reasons. Ethics mean different things to differnt depending on
the role of the accountant. If an accountant is hired by an
individual or a business, that accountant is trusted with the
finances of the person or business. The accountant is trusted to
give an honest account of finances and not to defraud or
jeopardize that individuals or companies relationship with the
government, creditors of financiers. Individuals and businesses
also trust the ethics of accountants insofar that they do not
disclose their information to those that do not have a right to it.
Finally, In the accounting profession, much like many other
professional service professions, an accountants reputation is
the continuing source of employment. If they are knows to have
a bad or even flexible ethical code then they can develop a bad
reputation and experience a loss of business.
--------------------------------------------
ACC 291 Week 5 Learning Team Ratio Analysis Memo

Resource:Virtual Organizations
Click the Virtual Organization link on the
student website to access the Virtual
Organizations.
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
--------------------------------------------

Discuss the objectives for Week Five. Your
discussion should include the topics you feel
comfortable with, any topics you Compare and
contrast sole proprietorships, partnerships, and
corporations.
Sole proprietorships means that a business that
owned by one person. That includes and not
limited to all profits and losses, debts and
unlimited liability, all will come from the solely one
owner and not a group or in this case a partner or
co-owner etc. Partnerships are seen much
differently than sole proprietorships. Partnerships
is a business that owned by more that one
person/s. This is the number one difference from
being a sole proprietorship or sole owner. Basically,
two or more people come together and split the
cost, debts, and liability. Corporations is an
business that has separate entity owned by
stockholders. The huge difference between
corporations and the other two is that they are
owned by stockholders. Stockholders make
decisions that is first best for their company,
secondly the company that they have together.
Why would a entrepreneur want to choose one
over the other?
An Entrepreneur is a person that wants to start a
business with their vision and have more power of
the decision making. The best choice for an
entrepreneur is to choose sole proprietorship out
of all the three choices. The first and most
important reason is because it is much easier to
start a business as sole proprietorships. Sole
proprietorship takes all the profit that and doesn't
have to split it between any other owners or
corporations.
If I was to start a new business which one would I
choose?
In this case it depends on the type of business. My
case I will be opening a hair salon and I would
prefer sole partnerships. i choose that because I
want to be in control and I don't want to split the
profit.

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