Mr. k an entrepreneur started his restaurant business last year and thinks that his business is doing well. He plans to expand his operations this year by opening other branches in Metro Manila. However, he does not maintain proper financial records of his company. He does not believe in the benefits of accounting and proper record keeping. Provide a short narrative explaining to Mr. the importance of accounting in his business
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Mr. k an entrepreneur started his restaurant business last year and thinks that his business is doing well. He plans to expand his operations this year by opening other branches in Metro Manila. However, he does not maintain proper financial records of his company. He does not believe in the benefits of accounting and proper record keeping. Provide a short narrative explaining to Mr. the importance of accounting in his business
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- What Would You Say? A friend of yours wants to start her own pet-sitting business. She already has a business license that is required in her city. She has had a personal checking account for years. You have told her that she also needs to open a separate account for her business needs, but she does not understand why she needs to have two separate accounts. Explain to her why she should have a business account separate from her personal account. Use some of the language of business you have learned in your texts Introduction and in this chapter.Mr. k an entrepreneur started business and thinks that his business is doing well. He plans to expand his operations this year by opening other branches in metro manila. However, he does not believe in the benefits of accounting and proper record keeping. Provide a short narrative explaining to mr.k the importance of accounting in his businessI. Why is accounting called the language of business? II. Mr. K an entrepreneur started his restaurant business last year and thinks that his business is doing well. He plans to expand his operations this year by opening other branches in Metro Manila. However, he does not maintain proper financial records of his company. He does not believe in the benefits of accounting and proper record keeping. Provide a short narrative explaining to Mr. K the importance of accounting in his business. III. Provide 3 examples of the financial information needed by the following stakeholders: a. Management b. Investors/Stakeholders c. Lenders d. Suppliers e. Customers f. Employees g. Government
- Your friend Rakib started a new business in Dhaka. He has been running the business for the last 3 years now and in the current year, he had to bear a huge loss in his business. Rakib is very confused about the financial position of his business because his business is doing very well in terms of attracting more customers. He is now doubting that may be he has made some errors in culculating the figures and accounting the transactions. You are his close friend and he wants your advice on the following issues: • He started his business in the middle of the yeur but he charged expenses for the entire year. * He estimated doubtful debts to be (8% to 15%) but later went on to charge 5% as a provision for bad debt expense. * He has recorded most of the assets at the market values in his books. * He had purchased some personal fumiture which he has expensed in the company accounts. • He has depreciated items such as dustbins and stationaries. Reguirement Using your knowledge of Conceptual…One year ago, Tyler Stasney founded Swift Classified Ads. Stasney remembers that you took an accounting course while in college and comes to you for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist of the T-accounts from his ledger, which were prepared by an accountant who moved to another city. The ledger at December 31 follows. The accounts have not been adjusted. Stasney indicates that at year-end, customers owe the business $1,600 for accrued service revenue. These revenues have not been recorded. During the year, Swift Classified Ads collected $4,000 service revenue in advance from customers, but the business earned only $900 of that amount. Rent expense for the year was $2,400, and the business used up $1,700 of the supplies. Swift determines that depreciation on its equipment was $5,000 for the year. At December 31, the business owes an employee $1,200…Roy Akins was the accounting manager at Zelco, a tire manufacturer, and he played golf with Hugh Stallings, the CEO who was something of a celebrity in the community. The CEO stood to earn a substantial bonus if Zelco increased net income by year-end. Roy was eager to get into Hugh’s elite social circle. He boasted to Hugh he knew of some accounting tricks to increase the company’s income by simply revising a few journal entries for rental payments on storage units. At the end of the year, Roy changed the debits form “rent expense” to “prepaid rent” on several entries. Later Hugh got his bonus, and the deviations were never discovered. How did the change in the journal entries affect the net income of the company at year-end? Who gained and who lost as a result of these actions?
- Assume that you are the controller of a business that provides legal services to clients. Suppose that the company has had a tough year, so the revenues have been lagging behind, based on previous years’ standards. What would you do if your boss (the chief executive officer [CEO] of the company) asked to reclassify a transaction to report loan proceeds of $150,000 as if the cash came from service fee revenue from clients instead. Would following the CEO’s advice impact the company’s accounting equation? How would reclassifying this one transaction change the outcome of the balance sheet, the income statement, and the statement of retained earnings? Would making this reclassification change the perception that users of the financial statements would have of the company’s current year success and future year potential? Write a memo, detailing your willingness (or not) to embrace this suggestion, giving reasons behind your decision. Remember to exercise diplomacy, even if you must dissent…Mr. Samir initiated a business by obtaining a loan from the bank. He did not calculate the required amount to start a business correctly and soon run short of cash. His expectations of monthly sales were also not met. As a result, he faced problems in paying employees' salaries, and utility bills. Due to this situation, he had to close the business after few months. What is the reason for the failure of his business? a. Poor cash management b. Poor customer service c. Poor business idea d. Poor salesMr. Anmol started a retail outlet of food corner named Anmol Foods in his locality and doing well in his food business. His friend Atul asks him to record the transactions and assess his financial position. Mr. Anmol is not convinced on accounting of the information as he is not sure about the need of accounting when he is earning good money. You as Mr. Atul, help Mr. Anmol to get an understanding about the term accounting, uses of accounting information - so that he can record the financial information and assess his financial position. Also, discuss any five accounting terms relevant to recording the financial information.
- Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners; Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of $6,000. The business completed the following transactions during June: McChesney deposited $10,000 cash in a business bank account to start the company. The company issued common stock to McChesney. Paid $300 cash for office supplies. Incurred advertising expense on account, $700. Paid the following cash expenses: administrative assistant’s salary, $1,400; office rent, $1,000. Earned service revenue on account, $8,800. Collected cash from customers on account, $1,200. Requirements Open the following T-accounts: Cash; Accounts Receivable; Office Supplies; Accounts Payable; Common Stock; Service Revenue; Salaries Expense; Rent…A few years ago, Miguel Thorpe founded Mig T Accounting Services. Mig T is aware that you and your group members are pursuing an accounting course while in college and therefore has approached the team for advice. He wishes to know how much net income his business earned during the past year in order to decide whether to keep the company going. His accounting records consist of a trial balance and some additional notes required to make adjustments to the financial statements. The company unadjusted trial balance for the year ended December 31st, 2021, was shown as follows: Mig T Accounting ServicesTrial BalanceDecember 31st, 2021 DRCRCash 120,000 Accounts receivable 65,000 Supplies 25,000 Lease Hold Improvement 100,000 Accumulated depreciation - Leasehold Improvement 40,000Furniture and Fixtures 500,000 Accumulated depreciation - Furniture and Fittings 300,000Accounts payable 25,000Salary Payable Unearned service revenue…Roy Akins was the accounting manager at Zelco, a tire manufacturer, and he played golf with Hugh Stallings, the CEO, who was something of a celebrity in the community. The CEO stood to earn a substantial bonus if Zelco increased net income by year-end. Roy was eager to get into Hugh’s elite social circle; he boasted to Hugh that he knew some accounting tricks that could increase company income by simply revising a few journal entries for rental payments on storage units. At the end of the year, Roy changed the debits from “rent expense” to “prepaid rent” on several entries. Later, Hugh got his bonus, and the deviations were never discovered. Requirements How did the change in the journal entries affect the net income of the company at year-end? How did the change in the journal entries affect the net income of the company at year-end?