Business Finance: Questions

Reconciling all sub-ledgers to the general ledger for accurate interpretation of the business activity. For example, Accounts Payable Aging Report will be compared to the General ledger for the Accounts Payable account. The auditor must scan future payable transactions to see if they affect the current company outcome.

d. List at least two non-discretionary expenses listed on the bank statement or check register. (1-2 sentences. 1.0

Accounting is commonly described as the language of business. It is very important for all business owners to have very good understanding of their finances. Having the knowledge of your business finance, you will know where the money is going. Every business owner should have a good understanding of finance. To have a good understanding business owners needs to understand basic accounting steeps, how does accounting play a role in their business, how to define a financial statement and how the omission of any of these steps would affect the success of a business. Once you have an understanding of accounting/finance and the how it plays

1. For the year-end December 31, 2007, financial statements, what amount should M record as a liability?

3. On the basis of the responses to Question 1 and 2, what are the units of accounting in this arrangement?

5.    Prepare any necessary adjusting entries to reflect the Inventory count at year end. These must be hand written.

How management identifies those transactions, events and conditions that may give rise to the need for accounting estimates to be recognized or disclosed in the financial statements. And the auditor shall make inquiries of management regarding changes in circumstances that may give risk or new or the need to revise existing, accounting

a. Accounts Payable and Accrued Expenses please provide a detail [sic] explanation why there is a $50,951.18 debit balance in this account?

B. It is outside the general purpose federal financial report and is optional, not required.

What correcting entry should you prepare? 54 A. Office Expense Accounts Payable 54 54 B. Accounts Payable Office Expense 54 28 C. Accounts Payable Office Expense 28 D. No entry is needed

b. Prepare the statement of cost of goods manufactured, income statement, and balance sheet for October 31.

b. Trace the line item “Balance per Bank Statement” – Accuracy and Existence (AU-C 315.A114 a-iii, b-i)

Another theory used in accounting is that of Materiality. This notion necessitates that accounting centers on material facts and not on facts that are immaterial to figuring revenues. Only transactions that have monetary

fair value of the plant to be $186 000. Due to recent developments in plant technology, the

However, there are a number of adjustments that may be required prior to the preparation of the final accounts. These include : (a) adjustments for owings and prepayments; ( b) adjustments for bad debts and provision for bad debts; and (c) adjustments for depreciation.