Business Accounting P1,P2

Firstly the role of accounting is to record business transactions in a systematic way, for instance recording the amount of sales made to customers by John Lewis. This is done by the business to keep the records accurate and updated as well. If bookkeeping is done incorrectly, this will result in the business processing wrong payments or billings. For instance, if John Lewis does not do bookkeeping, the business will end up making payment to wrong suppliers.

An accounting cycle is a process, or a series of activities, that consists of collecting an organization’s transactions at the end of a reporting period to prepare essential financial statements of a business (Fleury, 2015). The accounting cycle is a strict, methodical set of rules used to ensure the accuracy and conformity of financial statements (Investopedia, 2017). The steps involved with an accounting cycle, the roles each of the step facilitate, the impact of omission, and what financial statements are assembled from the accounting cycle data.

When you’re looking at the income statement, you can get information about profitability for a particular period. This is also called the profit and loss statement. The income statement is composed of both income and expenses. This statement can be used to deduct expenses from income and report either a net profit or net loss for that period. This statement will deduct all expenses from income and then report your net profit or net loss for that period. This will allow the business owner to determine if the business is bringing in a good amount of revenue to make a profit. The cash flow statement shows the movement in cash and balance over period. The cash flow can vary depending on the operating activities, investing and financing activities. This statement provides one business owner with insight to the company’s liquidity which is vital to the growth of the business. Reinvesting in business is very important, looking at the statement of retained earnings will tell a business owner how much were reinvested in the company. After profitable period, every big business has to give some of its profits to stockholders, and keep the rest amount as retained earnings. Out of all statements, retaining statement is important to companies that sells stocks to the public. This statement can also provide you with assets and liabilities information. These informations can be used to assess the financial health of your business. The results of a balance sheet will help the business owners to show the risk of liquidity and credit. Looking at these information you can measure trends and relationships to show where in the areas you can improve. These can also be compared to similar companies to show how the business measures up to leading competitors (Ali, 2010). In summary, the financial statements can provide a business owner

Agenda – Submit term projects to TURNITIN ASAP – Assignment #2 due April 1st 1159pm • List the coauthor’s name in the subject line. • Teaching Evaluation • Transfer pricing (cont.) – Stanco Inc. • Review chapters 11 and 12 & the practice final – Practice Q1 and Q2 • Review chapters 8 and 9 and the practice final – Practice Q3 and Q4 ACTG 2020

The source of revenue comes from net income, which comes from a sale of goods or services in

a service department’s costs have been allocated, costs are not reallocated back to it under

Allowable operating expenses. Enter the smaller of line 15 or line 25 . . . . . . . . .

According to the fact of this case, Parent Co. (Parent) wholly owns Poor Son Co. (Poor Son) as a legal subsidiary, and both of them all nonpublic companies. However, in January 2007 Poor Son filed a voluntary bankruptcy under Chapter 11 of the U.S. bankruptcy code because of its inability of meet obligations as they became due. Then, Parent claimed the loss of control of Poor Son and deconsolidated Poor Son from its financial statement. Through the bidding process in May 2009, Poor Son and OtherCo, the winning sponsor, filed a joint plan of reorganization to the bankruptcy court, but the plan was rescinded by OtherCo later due to significant market value shrink of Poor Son. After that, the

Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if

The purpose and goal behind researching the income statements and balance sheets then calculating the ratios is mainly to help creditors and investors make their decisions easier and faster. The way we are presenting our research results helps the investors and creditors make the decision which of the companies is more worthy to invest in or loan money too without taking a risk, and lowering the chances that they will be disappointed by the results of their investment, or in the creditors case they can be almost certain the company they are loaning the money to would be worthy enough of paying the money back without a hassle.

uses budgeted fleet hours to allocate variable manufacturing overhead. The following information pertains to the company 's manufacturing overhead data:

Rent Expense | 680 | | Miscellaneous Office Expense | 515 | | Office Salaries Expense | 1,800 | | Supplies Expense | 330 | |

Frank Wood’s Business Accounting 1 (Twelfth Edition) defines capital expenditure as being “incurred when a business spends money either to buy non-current assets or add to the value of an existing non-current asset” (Frank Wood & Alan Sangster, 2012, p. 275). Revenue expenditure is defined in the same textbook as being “incurred in running the business on a day-to-day basis” (Frank Wood & Alan Sangster, 2012, p. 276). Wood and Sangster (2012) also state how the

books and depreciated, and the lessee recognizes lease payments in the income statement in the period in which it is paid.

By: Charn Gek Cheng, Chiang Soo Ling, Kummar Sokali Muthu Mogan, Lee Siew Fen Samantha