accounting assignment

Anonymous
timer Asked: Jan 2nd, 2019
account_balance_wallet $10

Question description

NO PLAGIARISM

ORIGINAL THOUGHTS ONLY

FOLLOW THE INSTRUCTIONS BELOW:

Purpose of Assignment

This week's activity illustrates the role a company's accounting method plays in financial statement reporting. In this assignment, students evaluate the events occuring in a business setting and determine how to properly analyze those events to identify the impact on both cash and accrual accounting methods.

Assignment Steps

Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Commission (SEC)

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Scenario: BizCon, a consulting firm, has just completed its first year of operations. The company's sales growth was explosive. To encourage clients to hire its services, BizCon offered 180-day financing - meaning its largest customers do not pay for nearly 6 months. Because BizCon is a new company, its equipment suppliers insist on being paid cash on delivery. Also, it had to pay up front for 2 years of insurance. At the end of the year, BizCon owed employees for one full month of salaries, but due to a cash shortfall, it promised to pay them the first week of next year.

As the senior accountant, the Chief Financial Officer has asked you to prepare a memo to be sent to management notifying them of the delayed wage payments.

Prepare the memo in a maximum 700 words including the following information to better outline the situation:

  • Explain how cash and accrual accounting differs for each of the events listed in the above scenario and describe the proper accrual accounting.
  • Assess how at the end of the year, BizCon reported a favorable net income, yet the company's management is concerned because the company is very short of cash. Explain to management how BizCon could have positive net income and yet run out of cash.

Format your assignment consistent with APA guidelines.

Click the Assignment Files tab to submit your assignment.

Materials

Tutor Answer

Tutorlamb
School: Duke University

find the attached

Running head: ACCOUNTING METHODS

1

Accounting Methods
Name
Institution

ACCOUNTING METHODS

2
Accounting Methods

The company is known as BizCon and is using to accounting methods namely accrual
basis and cash methods. The usage of cash basis is usually on personal finances as well as small
business. Given that it is a new company it falls under the small company category. When the
money is received then cash method turns out to be profit and when used for expenses or been
paid out. On the other hand, the accrual basis refers to the revenue that is produced and when
there is services incurred (Tiron Tudor, & Mutiu, 2012). According to the scenario given the
companies that BizCon get products from prefers being paid on cash on delivery given that it is a
new company and they do not know what would happen in future. Therefore, the company pays
through checks despite recording ...

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Review

Anonymous
Good stuff. Would use again.

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