...Submitted To: Khandakar Mahfuzul Alam Assistant professor, Department of Accounting Govt. Azizul Haque College, Bogra Submitted by: Sumita Akter University roll: 9795 Registration no: 1755608 Academic Session: 2010-11 Class Roll: 136 BBA (2nd year) Department of Accounting National University Govt. Azizul Haque College, Bogra Letter of Transmittal Date: Khandakar Mahfuzul Alam Assistant professor, Department of Accounting Govt. Azizul Haque College, Bogra Subject: Submission of Internal Term Paper Dear sir, I have the honour to state that I would like convey to your knowledge that as per our BBA program, I have prepared my Term paper under the topic of “Capital Structure Decision of a Firm” .Under your kind supervision. Now I like to submit my Term paper to you. I have tried my level best to prepare. The paper is consistence with the optional standard under your valuable. I request you modesty to accept my paper considering the limitations in papering with only the theoretical knowledge. Sincerely Yours Sumita Akter University roll: 9795 Registration no: 1755608 Academic Session: 2010-11 Class Roll: 136 BBA (2nd year) Department of Accounting National University Govt. Azizul Haque College, Bogra Preface All praised to the Almighty Allah who has given me the capability to write the Term Paper Than I would like to express my special thanks of...
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...REQUIRED [1] Three conditions are often present when fraud exists. First, management or employees have an incentive or are under pressure, which provides them a reason to commit the fraud act. Second, circumstances exist - for example, absent or ineffective internal controls or the ability for management to override controls - that provide an opportunity for the fraud to be perpetrated. Third, those involved are able to rationalize the fraud as being consistent with their personal code of ethics. Some individuals possess an attitude, character, or set of ethical values that allows them to knowingly commit a fraudulent act. Using hindsight, identify factors present at Waste Management that are indicative of each of the three fraud conditions: incentives, opportunities, and attitudes. Answer: Fraudulent financial reporting is an intentional misstatement or omission of amounts or disclosures with the intent to deceive users. Misappropriation of assets is fraud that involves theft of an entity’s assets. The following are example of risk factors for fraudulent financial reporting for each of the three fraud conditions regarding to waste Management Company. Incentives/Pressures - The Company is under pressure to meet debt covenants or obtain additional financing. 1996 financial statements revealed that the company was feeling pressures from the effects of changes that were occurring in its markets and in the environmental industry. Although consolidated revenues were increasing...
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...financial accounting concept of accounting for receivables. Types of receivables, notes receivable, and statement presentation and analysis are covered. The assigned readings clarify the difference between tangible and intangible assets along with distinguishing between revenue and capital expenditures, and the entries associated with each. This week, you gain insight into how companies recognize notes receivable and how the methods are used to value accounts receivable. This week, you also discuss the value of indicating how plant assets, natural resources, and intangible assets are reported. Principle Assets OBJECTIVE: Prepare journal entries to account for transactions related to accounts receivable and bad debt using both percentage of sales and percentage of receivables methods. Resource: Ch. 8 of Financial Accounting Content • Ch. 8: “Accounting for Receivables” o Types of Receivables o Accounts Receivable • Recognizing Accounts Receivable • Valuing Accounts Receivable • Disposing of Accounts Receivable o Notes Receivable • Determining the Maturity Date • Computing Interest • Recognizing Notes Receivable • Valuing Notes Receivable • Disposing of Notes Receivable o Statement Presentation and Analysis • Presentation • Analysis OBJECTIVE: Distinguish between tangible and intangible assets. Resource: Ch. 9 of Financial Accounting Content ...
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...preclude sales accounting. Alternative 1 — Fail sale accounting criteria because of Transfer Provision 1. ASC 860-10-40-5(b) requires that the bank have the right to pledge or exchange the accounts receivable it received and that no condition both “constrains [the bank] from taking advantage of its right to pledge or exchange [the receivables and] provides more than a trivial benefit” to UpBeat Inc. Transfer Provision 1 (outlined in the case document) indicates that the bank is constrained because it has to obtain permission from UpBeat if it decides to sell or pledge the receivables. This constraint would preclude achievement of the sale criteria under ASC 860-10-40-5(b). Alternative 2 — Fail sale accounting criteria because of Transfer Provision 2. ASC 860-10-40-5(b) requires that the bank have the right to pledge or exchange the accounts receivable it receives and that no condition both constrains the bank “from taking advantage of its right to pledge or exchange [the receivables and] provides more than a trivial benefit” to UpBeat. Because similar accounts receivable are not readily available in the marketplace, the transferee is constrained. The transferee cannot sell the accounts receivable because they would not be available for delivery to the transferor if the transferor were to exercise its call. ASC 860-10-40-5(c) requires as a condition for sale accounting that UpBeat not maintain effective control over the transferred accounts receivable through (1) “[a]n...
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...Chapter 10 1. Receivables Chapter Opening Vignette Critical Thinking Challenge Questions* How are Sun-Rype’s customers different from CIBC’s? - Sun-Rype’s customers are mainly companies (grocery stores/chains/distribution centres) who buy Sun-Rype’s food and beverage products. CIBC’s customers are individuals as well as companies who purchase CIBC’s financial services/products. - There may be less risk associated with Sun-Rype’s credit customers than with CIBC’s customers since the dollar amount of CIBC’s transactions are significantly larger than Sun-Rype’s 2. Why would CIBC experience a higher rate of uncollectible accounts than SunRype does? - Sun-Rype’s primary customers would likely be in the habit of making regular purchases; they would have to pay their accounts to ensure that subsequent purchases are delivered. CIBC’s customers may include individuals or companies of a higher risk category such as car loans for individuals or companies borrowing funds for a major expansion. *The Chapter 10 Critical Thinking Challenge questions are asked on page 496 of the text. Students are reminded at the conclusion of Chapter 10, page 515 of the text, to refer to the Critical Thinking Challenge questions at the beginning of the chapter. The solutions to the Critical Thinking Challenge questions are available here in the Solutions Manual and accessible to students on the Online Learning Centre. Copyright © 2010 by McGraw-Hill Ryerson Limited. All rights reserved. 809 Fundamental...
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...Financial Accounting Chapters 1,2,3 Double Entry Accounting- each business transaction has dual effects. As a result, every transaction affects at least two accounts. One Debit and One Credit ACCOUNT | Debit | Credit | Assets | + | - | Expenses | + | - | Dividends or Withdrawals | + | - | Revenue | - | + | Liabilities | - | + | Capital | - | + | Retained Earnings | - | + | Normal Balance- side the account increases Contra Account- has a normal balance opposite of its companion account balance. Few examples of contra account – Allowance for doubt full account (ADA) for A/R - Sales Discount for Sales Revenue - Sales Return for Sales Revenue - Accumulated Depreciation for Capital Assets - etc. Accounting Equation- Assets = Liabilities + Owners Equity Assets | Liabilities | Equity | | | | -Cash- Accounts Receivable- Notes Receivable- Prepaid Expenses-Land- Building- Equipment- Furniture & Fixtures | -Accounts Payable- Notes Payable- Accrued Liabilities- Mortgage Payable | - Capital- Withdrawals- Revenue - Expense | 4 Financial Statements- Order Of Preparation 1) Income Statement – presents a summary of the revenues and expenses of a company for a specific period of time (ex: month or year). Net Income/ Net Loss = Revenue – Expense. I/S is for the month ended December 31,20XX 2) Statement of Owner’s Equity- presents a summary of the changes that occurred in the entity’s owner’s equity during a specific period of time...
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...are warranty costs? 3. What are bad debts expenses? 4. What are the methods of accounting for bad debts expenses? 5. What are the methods to estimate bad debt expenses? 6. What are the significance of the estimation of bad debt expense and warranty cost to the financial statements? Introduction A sales promotion is an activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, and telemarketing. Price promotions are also commonly known as “price discounting”. These offer either (1) a discount to the normal selling price of a product, or (2) more of the product at the normal price. Increased sales gained from price promotions are at the expense of a loss in profit – so these promotions must be used with care. For TechnoMaju Sdn Bhd, the company is offering a one-year warranty and credit sales to promote sales. A credit sale is a sales transaction by which the buyer is allowed to take immediate possession of the purchased goods and pay for them at a later date. The revenues generated from credit sales to be collected are recorded in Accounts Receivable in the balance sheet. However, not all of the accounts receivable can be fully recovered as some of the...
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...NOTES RECEIVABLE HANDLED BY A COMPANY Notes receivable is a bookkeeping account used to track debt and payments from borrowers. When a small business lends money, goods or merchandise to an individual, it expects repayment. For many types of loans, the business will record the transaction under accounts receivable. In specific situations, however, in which the company receives a signed promissory note guaranteeing repayment, the transaction is recorded under notes receivable. Companies that use notes receivable in their bookkeeping follow the accrual method of accounting. Promissory Notes and Notes Receivable In order to use the notes receivable account, the company must have a signed promissory note to back each borrower account. A promissory note stipulates the amount of debt owed by the borrower, the interest rate, if any, and the terms of payment. The note can be formal or it can be handwritten, dated and signed by the borrower. As long as there is a promissory note, the company should record the amount owed in the notes receivable account in the general journal. Any company, a sole proprietorship, a partnership or a large corporation can issue promissory notes and record the transaction in a notes receivable account. Companies that make Employee Advances If a company makes it a practice to advance wages to an employee, that company might ask for a signed promissory note that details how the employee will repay the advance. The amount of money the employee now owes qualifies...
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...Oracle Account Payable Interview Guide What are the mandatory steps for Payable module before entering transactions? Create application user sign–ons and passwords. Define your chart of accounts. Define your accounting period types and accounting calendar periods. Define a set of books. Specify a set of books name and assign it a calendar, functional currency, and a chart of accounts structure. After choosing your set of books, use the Application Developer responsibility to set the GL Set of Books ID profile option to Updateable. After choosing your set of books, use the System Administrator responsibility to set the GL Set of books Name profile option. If you are not using multiple organizations feature, set the option for the Oracle Payables application. If you are using multiple organizations feature, set the option for each unique combination of organization and responsibility. Define Payables Lookups. Define Purchasing Lookups. Enter locations. Enter employees. If you have Oracle Human Resources installed, use the People window. See: Entering a New Person (Managing People Using Oracle HRMS). If you do not have Oracle Human Resources installed, use the Enter Person window. If Oracle Inventory or Oracle Purchasing is installed, you must define at least one Inventory Organization before defining Financials Options. Define payment programs. Install or upgrade Payables. Select your primary set of books. Use the System Administrator...
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... I have performed a Performance Analysis for both the 2010 and 2011 fiscal periods (Colorado Technical University Online, 2012). The Managerial Accounting information collected helps the internal users to use strategic planning, and operate efficiently while evaluating the performance of all areas within the company (Atkinson, Kaplan, Matsumura, & Young, 2012). This allows them to have a better handle on the operations. Thus, allowing for a more informed decision making process (Atkinson, Kaplan, Matsumura, & Young, 2012). Previously, the managerial accounting financial information was just expressed in monetary denomination (Accounting for Management, 2012). Now it has led to include any information that is considered valuable operational or physical information (Colorado Technical University Online, 2012). The performance of a new product, and how well-trained an employee is or how satisfied a customer are all good examples of the nonfinancial information needed to make better decisions (Colorado Technical University Online, 2012). The amounts of processing time or the quality of the product or service are also good examples of this information (Horngren, Datar, & Rajan, 2012). The information that is the financial type is usually collected and summarized in reports, such as the income statements, balance sheets, etc. (Accounting for Management, 2012). The Consolidated Financial Statements for the 2010 and 2011 fiscal periods have...
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...7 Cash and Receivables CHAPTER LEARNING OBJECTIVES 1. Identify items considered cash. 2. Indicate how to report cash and related items. 3. Define receivables and identify the different types of receivables. 4. Explain accounting issues related to recognition of accounts receivable. 5. Explain accounting issues related to valuation of accounts receivable. 6. Explain accounting issues related to recognition and valuation of notes receivable. 7. Explain the fair value option. 8. Explain accounting issues related to disposition of accounts and notes receivable. 9. Describe how to report and analyze receivables. *10. Explain common techniques employed to control cash. *11. Describe the accounting for a loan impairment. *12. Compare the accounting procedures for cash and receivables under GAAP and IFRS. CHAPTER REVIEW 1. (L.O. 1) Chapter 7 presents a detailed discussion of two of the primary liquid assets of a business enterprise, cash and receivables. Cash is the most liquid asset held by a business enterprise and possesses unique problems in its management and control. Receivables are composed of both accounts and notes receivables. Chapter coverage of accounts receivable places emphasis on trade receivables. In covering notes receivables, the chapter includes both short-term and long-term notes. Nature of Cash 2. Cash consists of coin, currency, bank deposits, and negotiable instruments such as money ...
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...Bank Accounting (FI-BL) Release 4.6C HELP.FIBL Bank Accounting (FI-BL) SAP AG Copyright © Copyright 2001 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft , WINDOWS , NT , EXCEL , Word , PowerPoint and SQL Server are registered trademarks of Microsoft Corporation. IBM , DB2 , OS/2 , DB2/6000 , Parallel Sysplex , MVS/ESA , RS/6000 , AIX , S/390 , ® ® ® AS/400 , OS/390 , and OS/400 are registered trademarks of IBM Corporation. ORACLE is a registered trademark of ORACLE Corporation. INFORMIX -OnLine for SAP and Informix Dynamic Server Informix Software Incorporated. ® ® ® ® ® ® TM ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® are registered trademarks of UNIX , X/Open , OSF/1 , and Motif are registered trademarks of the Open Group. HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C , World Wide Web Consortium, Massachusetts Institute of Technology. JAVA is a registered trademark of Sun Microsystems, Inc. JAVASCRIPT is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, SAP Logo, R/2, RIVA, R/3, ABAP, SAP ArchiveLink, SAP Business Workflow, WebFlow, SAP EarlyWatch...
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...In the accounting policy manual of Atlantic Ltd, the provision of doubtful debts is set to 1% of the sales in the financial year. However, in 2012 - 2013 financial year, the provision for doubtful debts ($570,000) was set to 10% of the sales ($5,700,000), which was 10 times higher than the company accounting policy. There were a large number of debtors that exceeded 60 days where the company’s policy of credit terms is 30 days. In addition, there was 163% increase in total sales in 2012 - 2013 financial year ($5,700,000) than 2011 – 2012 financial year ($3,500,000). However, the audit might not be able to comment on the reasonableness of profit before tax in 2012 – 2013 ($1,500,000), because there was no information about profit before tax in previous year 2011 – 2012. The auditor needed to perform substantive procedures in account receivable to determine whether there was fraud or material misstatement in sales, account receivable and provision of doubtful debts. The substantive procedures included initial procedure, analytical procedure, test of details of transaction and tests of details of balance, as well as presentation and disclosure (Leung et al. 2011, pp.602 - 613). In the initial procedure, the auditor verified the account receivable and the related allowance by tracing the opening balances to the closing audited balance in the working papers of previous year. He reviewed the account receivable in the general ledger accounts and related allowance for unusual entries...
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...ACCOUNTING 101 MIDTERM EXAMINATION 1. Which of the following is the correct accounting equation? A) Assets + Liabilities = Owner’s equity B) Assets = Liabilities + Owner’s equity C) Assets + Revenue = Owner’s equity D) Assets + Revenue = Liabilities + Expenses 2. Which of the following financial statements shows the changes in capital during a period of time? A) Income statement B) Statement of owner’s equity C) Statement of cash flows D) Balance sheet 3. Which of the following financial statements lists the entity's assets, liabilities, and capital as of a specific date? A) Balance sheet B) Statement of owner’s equity C) Income statement D) Statement of cash flows 4. Accounting is the information system that measures business activity, processes the data into reports, and communicates the results to decisions makers. TRUE OR FALSE 5. Accounting is "the language of business." TRUE OR FALSE 6. An obligation that a proprietorship owes to an outside person or agency is called a(n): A) asset. B) liability. C) owner’s equity. D) revenue. 7. An asset account is increased by a debit. TRUE OR FALSE 8. An owner’s equity account is increased by a debit. TRUE OR FALSE 9. Expenses are increases in owner’s equity, caused by providing goods or services for customers. TRUE OR FALSE 10. Accountants...
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...Ethics in Accounting Student’s Name Institutional Affiliation In this case without reclassification of accounts receivable, net cash that is utilized in operation is given as; |Net Income |$60000 | |Decrease or (Increase) in accounts receivable |($80000) | |Net amount provided in operation |($20000) | If there is reclassification as anticipated, the net cash used in operation is; |Net Income |$60000 | |Net income provided in operation |$60000 | Through reclassification of $80000 of accounts receivables to long term, the cash inflow from operation will also increase by the same $80000 since it basically looks as if the company collected $80000. It is however understandable that there will be no net effect on the cash flows, this is so because the $80000 will be recorded as cash receivables outflow in long term. The rise in the accounts receivable will instead be reported as a rise in the long term receivables under...
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