...The need for an organization to keep accurate financial records is essential for the effective running of the business and as an indicator of performance and the economic health of the company. This can be achieved in one of two ways; the cash basis method or the accrual basis method. The former captures expenses at the time they are paid and revenues when payment for goods or services is received. This is perhaps more familiar to those without knowledge of generally accepted accounting principles, because it more closely resembles personal financial management. Although credit and other fiscal instruments are used in some cases by individuals in their personal matters, most people generally manage personal financial statements on a cash basis. This method is effective for an individual, or perhaps a very small business with a small number of accounts and minimal transactions to record. There are, however, a number of disadvantages with this method; chiefly among these is the difficulty it causes businesses in associating operating expenses to revenues. Cash flows alone do not accurately reflect the operating activities of the organizations, and “The accrual basis of accounting overcomes the chief limitation of the cash basis – a possible mismatch of revenue and expenses.” (Ristea, Doros, Ioanas, & Morega, 2010, p. 208). When employing the accrual basis of accounting, financial events are recorded at the time they occur. For example; when a service is rendered to a customer...
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...Week Three Accrual and Cash Basis Bi-Le’ DeRouen ACC/290 November 1, 2012 Dana Babin Week Three Accrual and Cash Basis Both cash basis of accounting and accrual basis of accounting can be the best of both worlds when using software. However to prefer one over the other to ensure the most advantage way can be a bit of a trick. Determining the differences between the two bases will be established. In the event an accountant decides accrual basis over cash basis he or she understand transactions that charge an organization’s financial statements are recorded in the time period in which the events occur, even if currency was not received. Receivables are recorded if payment is not received at the point of sale, revenues and expenses will be recorded in full, payables are recorded whether payment is made or not at the purchase time, and it is important to know that organizations and companies recognize expenses when incurred. Compared to cash basis accounting, companies and organizations record revenue only when currency is received, and also recording expense when cash is salaried. When using cash basis the accountant is not to record expense when incurred nor is he or she to record revenue when earned. The cash basis is prohibited under (GAAP) generally accepted accounting principles (“Understanding Cash and Accrual Basis Accounting “, 2012). Cash basis can be quicker and easier to use versus accrual. It is very simple, when funds are available to pay bills checks...
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...Week 1 Financial Statements Paper John Dow ACC/290 2/24/2014 Week 1 Financial Statement Paper. In the accounting realm there are many terms that get tossed around and it can become quite baffling. The great thing I have learned thus far is that there are four basic financial statements that we operate on today. These statements are very important to the vitality of a company/corporation to continue business in a progressive fashion. In the following text I will articulate the needs and importance of the four basic financial statements, and why they are necessary. The four basic financial statements are: * Balance sheet. * Income statement. * Retained earnings statement. * Statement of cash flows These four statements are essential to the successful operating of a company. With these four statements you can feel prepared when you head to a bank and request a loan for your business, or decide to invest into the stock of a company. These four statements also hold the required information to properly lead a company to higher growth potential and sustainability. The balance sheet is a term that most have heard of, this statement tells the internal or external user of the total assets owned compared to the liabilities or debt at a certain time. This statement is crucial for internal use so that managers can decipher whether they have cash on hand, or if there are going to be layoffs. Lending companies require companies to hand over their balance sheet to...
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...Allstate Insurance Financial Statement, Part II Amanda Crombach, Tami Reischmann, Jessica Roth, Shane Vogt ACC/290 April 8, 2013 Allstate Insurance Financial Statement, Part II This paper will breifly discuss some different financial aspects of Allstate including, what some of Allstate’s assets include, how the assets are classified, what cash equivalents are, the company’s total liabilities at the end of the most recent annual reporting period as well as at the end of the provious reporting period, what information gathered in this paper that might be important to creditors, investors, and employees. The Allstate Corporation is the largest publicly held personal lines property and casualty insurer in America. Allstate was founded in 1931 and became a publicly traded company in 1993. As of 2012, Allstate is number 93 on the Fortune 500 list of largest companies in America. Allstate is primarily engaged in the personal property and casualty insurance business and the life insurance, retirement and investment products business. Allstate conducts its business primarily in the United States. Customers can access Allstate products and services such as auto insurance and homeowners insurance through nearly 12,000 exclusive Allstate agencies and financial representatives in the United States and Canada. Allstate is the 2nd largest personal property and casualty insurer in the United States on the basis of 2010 statutory direct premiums earned...
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...Week Five Financial Reporting Paper Name Team A ACC/ 290 Date Financial Reporting Problem Verizon Communications Incorporated is a multi-billion dollar company. In 2010, the net income for Verizon Communications Inc. and its subsidiaries was over $10 billion (Verizon, 2011). Verizon Communications Inc., like many reputable businesses, makes their financial statements publically available. Although the order of the information is stated as only a suggestion, many companies choose to list their assets in the order listed in the FASAB handbook to keep consistency and to ensure they report all required information. It is the case with Verizon Communications Inc. Verizon Communications Inc. lists its assets in many categories. According to the balance sheet listed on the Verizon Communications Inc. 2010 Annual Report (Verizon, 2011), the assets for Verizon Communications Inc. are classified in the following categories: Current Assets, Plant, property and equipment, Investments in unconsolidated businesses, Wireless licenses, Goodwill, Other intangible assets (net), and Other assets. The order listed by Verizon Communication Inc. is consistent with the Federal accounting Standards Advisory Board Cash Equivalents Verizon registers its assets in the proper order under their current assets. First, on the list are its cash and cash equivalents, which is anything that can immediately turn into cash. Some examples of cash and cash equivalents are...
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...Week Five Financial Reporting Paper Name Team A ACC/ 290 Date Financial Reporting Problem Verizon Communications Incorporated is a multi-billion dollar company. In 2010, the net income for Verizon Communications Inc. and its subsidiaries was over $10 billion (Verizon, 2011). Verizon Communications Inc., like many reputable businesses, makes their financial statements publically available. Although the order of the information is stated as only a suggestion, many companies choose to list their assets in the order listed in the FASAB handbook to keep consistency and to ensure they report all required information. It is the case with Verizon Communications Inc. Verizon Communications Inc. lists its assets in many categories. According to the balance sheet listed on the Verizon Communications Inc. 2010 Annual Report (Verizon, 2011), the assets for Verizon Communications Inc. are classified in the following categories: Current Assets, Plant, property and equipment, Investments in unconsolidated businesses, Wireless licenses, Goodwill, Other intangible assets (net), and Other assets. The order listed by Verizon Communication Inc. is consistent with the Federal accounting Standards Advisory Board Cash Equivalents Verizon registers its assets in the proper order under their current assets. First, on the list are its cash and cash equivalents, which is anything that can immediately turn into cash. Some examples of cash and cash equivalents...
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...Financial Statements ACC/290 October 8, 2013 Financial Statements Financial Statements are formal reports or records generated from accounting information such as assets, expenses, liabilities or revenues that provide a view of an entity’s financial activities. According to Weygandt, Kimmel, and Kieso (2010), the four basic financial statements are a balance sheet, an income statement, a retained earnings statement and a statement of cash flows. All of the financial statements complement each other and work together. The balance sheet describes what a company owns and what it owes at a specific time. In this statement assets or what is owned by the company must balance with the claims to the assets. Internal users like managers and employees use a balance sheet to see the stockholders’ equity. The stockholders’ equity is a combination of the common stock and retained earnings. Common stock is when new shares of stock are sold and retained earnings is the net income held within the company. External users such as investors and creditor will review and analyze this balance sheet to decide whether or not they will be repaid by the company. By reviewing the assets, liabilities and the relationship between debt and stockholders’ equity the investors or creditors can determine whether or not the company is a healthy and safe risk or a dangerous risk. The income statement shows the success of a company during a specific time by reporting on the revenues and...
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...Performance Review Form Name: Job Title: Months in this Position: Date of Evaluation: Department: Review Period: PART I – Introduction Employee Commitment: Our Company recognizes that it’s employees are a crucial ingredient to the quality and success of it’s products and services. It is our commitment to support the development of our staff both professionally and personally and in doing so create an organization with the ability to exceed the expectations of the company, the individual and our clients. Purposes of Performance Reviews: The primary purpose of a performance review is to encourage staff development and strengthen the departments overall effectiveness by: 1. identify specific indicators of achievement 2. pin‐point areas of greatest/least effectiveness 3. stimulate improved performance 4. aid in promotion, retention and salary decisions 5. clearly define the goals and objectives of the organization 6. develop mutually established employee focused goals and objectives 7. increase employer‐employee communications 8. evaluate effectiveness of management Review Expectations: Each employee is entitled to a thoughtful and careful review. Performance review success depends on both the supervisor’s willingness to complete a constructive and objective assessment, and on the employee’s willingness to respond to constructive suggestions for improvement and work with the supervisor to identify, overcome...
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...ACC 290 Week 2 Individual Wiley Answers E3-4 (b,c), E3-9, P3-5A, P3-6A University of Phoenix Do not copy directly. Please use as a guide. Come back for more. Buy the entire course collection and save! http://www.scribd.com/collections/4123612/ACC-290-UOP E3-4 (b,c) A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operations is shown below. Each increase and decrease in stockholders' equity is explained. E3-4 (b,c) SOLUTION E3-9 This information relates to Pickert Real Estate Agency. Post the transactions to T-accounts and complete the following trial balance. (If answer is zero, please enter 0, do not leave any fields blank.) E3-9 SOLUTION P3-5A | | Sunflower Architects incorporated as licensed architects on April 1, 2010. During the first month of the operation of the business, these events and transactions occurred: Journalize the transactions. (If no entry is required type No entry for the account and 0 for the amount.) Complete the following trial balance. (Hint: Post the above transactions to the ledger T-accounts and use the balances to complete the trial balance.) (If answer is zero please enter 0, do not leave any fields blank.) P3-6A | | This is the trial balance of Slocombe Company on September 30. P3-6A Answer Journalize the transactions. Post to ledger accounts and then complete the following trial balance. (If answer is zero please enter 0, do...
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...Behavior and Communication Paper BCOM/230 October 6, 2011 IBM (International Business Machines Corporation) has been a fixture in American and the international field of information handling since the 1880’s. The original company name was Computing-Tabulating-Recording Company (C-T-R). More recently, IBM employees determined that their values include, “dedication to every client’s success”. (Palmisano, 2011). “Also espoused in the values statement is trust and personal responsibility in all relationships”. (Palmisano, 2011). IBM has taken the route that their values must permeate all dealings whether in the United States or not. This company has tried to take on a culture of trust and responsibility worldwide. Previously, IBM conducted an intranet convention of sorts to try and get input from all 319,000 employees world wide and the result was the previous mentioned values. So obviously, IBM uses electronic communications very heavily in their operations. Also, “In 1997, IBM actively recommended that its employees use the Internet when many companies were seeking to restrict their employees' Internet access” (IBM, n.d.). IBM insists its employees follow their business conduct guidelines when conducting business on the internet. In the case of IBM, their levels of communication have to be directly related to their values because they are committed to the success of every customer. This, in this writer’s...
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...The four basic financial statements are income statement, retained earnings statement, balance sheet, and statement of cash flow. Each of these statements has specific value for internal and external users to use them for. These statements can help a company determine how well they are doing in the market. By evaluating the information given in these statements there may even show potential for a company to grow. The income statement shows a company’s revenues, income, and expenses. With this statement the company can determine what their net worth is and determine if they are earning income or if they are losing money. The retained earnings statement uses the net income found from the income statement, and shows what portions of that income the company will retain for its expansion and what portion of that income it will distribute to shareholders. A balance sheet covers assets and liabilities such as creditor loans. In the balance sheet assets must balance with liabilities. Finally, the statement of cash flow covers a company’s income and expenses and shows where cash was obtained, either through general revenue from sales or loans from creditors, and it also covers how the cash was used during a period of time. These statements may be useful to managers and employees in several ways. If managers hold stock within the company they would be interested in maintaining a higher profit margin in order to keep their stock up. They can use the information to help determine...
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...Week Five Problems and Exercises ACC/290 Principles of Accounting I BE-5-1 Presented here are the components in Korinek Company’s income statement. Determine the missing amounts. |Sales Revenue | |Cost of Goods | | | | |Sold | | |Dec. 15 |Accounts Receivable |900 | | | | Sales Revenue | |900 | | |(To record credit sale to Pocras Company) | | | | | | | | |15 |Cost of Goods Sold |590 | | | | Inventory | |590 | | | (To record cost of goods sold on account) | | | Pocras Company General Ledger |Date |Account Title |Debit |Credit | |Dec. 15 |Inventory...
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...Financial Reporting Problem Part II ACC290 September 16,2013 Financial Reporting Problem Part II Financial Reporting Problem, Part II The PepsiCo is a beverage distributor is known for their soda and other merchandise. The cola company started in the 1800s in a drugstore, and it was named “Brad’s Drink.” In 1898, cola introduced “Brad’s Drink” to the market. After a few years, the name changed to Pepsi. The currents assets are very important to companies like PepsiCo. In the balance sheet, “current assets are assets that a company expects to convert to cash or use up within one year or its operating cycle, whichever is longer. For most businesses, the cut off for classification as current assets is one year from the balance sheet date” (Kimmel, Weygandt, & Kieso, 2011, p. 49). The company can use these assets to support its routine operations. For example, the company can use the assets to pay their current expenses. The common types of current assets consist of cash, marketable securities, inventory, accounts receivable, prepaid expenses, and additional liquid assets that the company can turn in to cash. However, according to Kimmel, Weygandt, and Kieso, 2011, companies normally arrange their current assets in the order in which they anticipate to convert them into cash. Therefore, the proper order for a company to have its assets listed under the current assets is as follows cash, (2) short-term investments (such as short-term U.S. government securities)...
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...Accrual vs. Cash Basis Accounting XXXXXXXXXX ACC290 XXXXX, XX, XXXX XXXXXX XXXXXX Introduction In business, there are many different forms and standards to accounting. These standards are governed by rules, laws, regulations and accurate accountability of a particular business account. There are some general differences between general and commercial basis accounting principles, also differences between accrual and cash basis accounting. Those differences will be looked at here. General and Commercial Basis Accounting Principles According to Wikipedia.com, generally accepted accounting principles (GAAP) refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards or standard accounting practice. These include the standards, conventions, and rules that accountants follow in recording and summarizing and in the preparation of financial statements. Hubpages.com discusses commercial accounting, also known as profit accounting, defining that it performs primarily by profit and loss. The reporting for a profit organization is directed to the investors. ("The Principles Of Commercial Accounting And Fund Accounting", 2011). Accrual vs. Cash Basis Accounting According to the readings, accrual basis accounting is defined as in which companies record, in the periods in which the events occur, transactions that change a company's financial statements, even if cash was not exchanged. In other words...
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...Sarbanes-Oxley Act (SOX) ACC290 March 29, 2012 Sarbanes-Oxley Act (SOX) The Sarbanes-Oxley Act (SOX) was created on July 2002 after numerous financial scandals involving companies such as Enron and WorldCom. The main section of the act which is section 404(a) requires management to provide the financial reporting accurately and effectively. This is called Internal Control over Financial Reporting (“ICFR”). There are several sections that have been created to assure the accuracy of the financial reports provided by any given company. The accountant has to be approved by the board and cannot falsify or make any incorrect entries on the financial reports. The accountants have to be accurate and efficient in order to avoid fines or penalties which are very high and can end up in incarceration. Under SOX, a company needs to keep track of employees’ degrees and certifications to ensure that employees continue to meet the specified requirements of a job. An independent auditor will assess the reports and investigate any discrepancies if needed. (2010, Kimmel) There are some companies that designate their own internal control department to assure the public and shareholders of periodic reviews. The internal control department is solely dedicated to follow SOX requirements and is not to deviate from the main categories. After the creation of the Sarbanes-Oxley Act, companies change the way they report the financial statements to the shareholders and made them realize that by...
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