...Assignment 1: Application of Financial Statement Students will prepare a ten (10) page response to the following: * Select either the balance sheet , income statement,or statement of cash flow and explain how the use of it may be applied to your everyday life. * Using the same concept selected above, discuss how a business manager may benefit from an understanding of this statement. * Discuss how your understanding of the balance sheet and income statement may be applied to your current or future position. The format of the report is to be as follows: * Typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format. * Type the question followed by your answer to the question. * In addition to the ten (10) pages required, a title page is to be included. The title page is to contain the title of the assignment, your name, the instructor’s name, the course title, and the date.Note: You will be graded on the quality of your answers, the logic/organization of the report, your language skills, and your writing skills. | The assignment will be graded using the following rubric: Outcomes Assessed | * Prepare and analyze financial statements including the balance sheet, income statement, and statement of cash flow. * Use technology and information resources to research issues in financial accounting management. | Grading Rubric for Written Assignment: Application of Financial Statement | Criteria | 0Unacceptable | 20Developing...
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...Application of Financial Statement Tasha L. Hodge Professor Doshi Acct 557: Financial Accounting. December 5, 2011 Abstract The purpose of this paper is to explain my reasoning on the importance of financial statements in a personal and professional environment. The balance sheet and the income sheet are the two most important factors that all business needs in order to attract and keep investors. The balance sheet reports assets, liabilities and equity while Income statement lists total income and total expenses. Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. According to the principles of accounting website, “ Accounting is a set of concepts and techniques that are used to measure and report financial information about an economic unit. The economic unit is generally considered to be a separate enterprise. The information is reported to a variety of different types of interested parties ( principles of accounting, 2011). To greatly explain, these interested parties use either a balance sheet or income statement. The balance sheet, “reports the assets, liabilities, and stockholders equity of a company at a specific date”, (Weygandt, 2011). The income statement “ presents the revenues and expenses and resulting net income or net loss of a company...
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...Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. A balance sheet is a snapshot of a business financial condition at a specific moment in time, usually at the close of an accounting period. A balance sheet is comprised of assets, liabilities, and owners’ or stockholders’ equity. Assets and liabilities are divided into short- and long-term obligations including cash accounts such as checking, money market, or government securities. A balance sheet can be applied to everyday life through an interesting look called your lifetime balance sheet. Equity is computed by subtracting the value of your liabilities from the total of your personal assets. The summary is as follows: Assets Financial Assets – houses, automobiles, bank accounts, investments, retirement accounts, businesses owned, along with personal items of value, including clothing, furniture, art, antiques, and any items worth noting. Human Capital -- the ability to work and earn income. Liabilities Pre-Retirement Consumption Spending -- a mortgage, loan, education and credit card balances as of the date on the balance sheet. Retirement Spending -- what you'll need to live on. Given these list of assets and liability, the process over a lifetime goes as follows: You have little, if any, financial assets when you start working. You begin to work and earn an income. Much of this income...
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...#1. Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. One of the major financial statements used in accounting is the income statement. The income statement is beneficial to accountants and business owners. Many will also refer to this statement as the “profit and loss statement,” “statement of operations,” or “statement of income.” Regardless of its name, it serves the same purpose and that is to show profitability of a company during a specific period of time. The period of time covered is usually chosen by the business or organization and can vary. Within the statement, revenues, expenses, gains and losses are distinctively displayed. Income statements are imperative to everyday life whether it applies to personal activities or business transactions. The income statement can be applied to my everyday life in many ways. It allows me to see the revenue stream coming in and allows me to budget more affectively. Understanding my personal income statement also builds a safety net of security or savings. Expenses involved in daily activities allow me to analyze whether money is being saved or lost. #2. Using the same concept selected above, discuss how a business manager may benefit from an understanding of this statement. Businesses use standard formats or financial statements to record their performance. The income statement communicates the inflow of revenue and the outflow of...
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...Accounting Question1: Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. Answer: For the sake of this assignment, I will choose the income statement. First of all, an income statement measures a company’s revenue and expenses as it relates to net income or net loss (Kieso et all, 2010). The income statement relates more to my everyday life than the balance sheet even though I would have preferred a statement of cash flow but because this was not an option, I chose the income statement. For example; I have to make sure that I meet my daily or monthly bill payments; I need to make sure that my expenses are equal or less than my income. The reason for this is to avoid spending more money than I make. If I spend more money than I make, this results into unpaid bills or insufficient fund fees from my bank. Just in the same way a company will report net loss for the period, my creditors will report a negative credit rating on my credit report for past due payment. Therefore, I have to monitor and budget expenses according to my monthly income. In order to maintain a positive statement, I have to make more money or spend less money. Question 2: Using the same concept selected above, discuss how a business manager may benefit from an understanding of this statement. Answer: A business manager can benefit from an understanding of the income statement by analyzing the statement in how the company is doing....
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...Application of Financial Statement Peter Johnson Strayer University ACC 557 Abstract This paper talks about how a balance sheet is an important financial statement. The balance sheet can be applied to every day life. The balance sheet can be used to help somebody see they ways that they have made financial decisions in their lives. The balance sheet also helps businesses function. A business manger uses the balance sheet to make important decisions. These decisions help the business run functionally. With out a balance sheet the business manager’s decisions become harder. Companies need to understand what the financial documents are telling them. Application of Financial Statement Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. A balance sheet is a financial statement that summarizes a company’s assets, liabilities and shareholder’s equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well ad the amount invested by the shareholders. A balance sheet can be applied to everyday life by allowing a person to get a quick handle on the financial strength and capabilities of their life. If a person keeps a balance sheet they are able see what steps they need to take in their personal lives. The balance sheet will allow the person see if they are overspending on credit compared to paying cash to...
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...Application of Financial Statement Angela Lance Professor Kim Dillman Financial Accounting-ACC557 Assignment # 1 Due Date: February 26, 2012 Application of Financial Statement Today’s working environment displays different cultures throughout an organization. Companies need to be aware of their financial obligations and responsibilities. The opening of a business has many different perspectives that need to be addressed. Once you open a business you want to stay in business and a way you can do this is by maintaining your financial records and not overspending your earnings. Companies have to be aware and accurate of maintaining their records in accordance with Generally Accepted Accounting Principles (GAAP) and or Financial Accounting Standards Board (FASB). Financial accounting provides economics and financial information for investors, creditors, and other external users.1 Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. Businesses record their performance in standard formats called financial statements. The most common is the Balance Sheet, the Income Statement, and the Cash Flow Statement. The balance sheet contains information at a moment in time about resources (assets) that are owned or controlled by the firm. Assets have probable future economic value usually through use or sale, are controlled by the firm and are related to a prior transaction...
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...Q1. Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life? I have selected balance sheet to examine in this assignment. Balance sheet consists of the assets, liabilities and equity held by a firm. Both assets and liabilities are classified into short term and long term depending on the time period. Liabilities are what company owes to its creditors, customers and suppliers whereas assets are what company own. The shareholders equity is mainly the investments of investors and owners in the firm. The balance sheet can be applied to our day to day life in the following ways – a) Balance sheet gives a clear picture of our financial strength in terms of cash availability or liquidity. The liquidity helps us to plan better in short term as well as long term. b) Balance sheet tells us how much our debtors owe to us in terms of the accounts payable. This would help us to calculate the turnover rate and plan the forecasting. c) Balance sheet also gives the amount of debt we have from external borrowings. The debt to asset ratios help us the understand the health of the firm and future borrowing power d) The key ratios like inventory turnover ratios, accounts receivable ratios, accounts payable rations, debt to equity ratios, liquidity and quick ratios help us to understand how leveraged the firm is and indicates the financial strength. Q2. Using the same concept selected above, discuss how a business manager may benefit...
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...Financial Statement Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. According to Weygandt, Kimmel, and Kieso (2010), “an income statement presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time” (p. 21). Using an income statement in one’s personal everyday life allows you to document and track monthly or annual income and expenditures for personal budgets. Income statements can be used to gauge your incoming funds and match them to the amount of funds that you’ve limited yourself to use for a determined amount of time. There are many beneficial incentives to using personal income statements. Using income statements is a great way to monitor both monthly and annual expenses. Just as income statements contain the list of expenses for a business (e.g. salaries expense, rent expense, and utilities); income statements can also be used on a personal basis to list one’s car payments, rent/mortgage, groceries, auto fuel and even entertainment. Monitoring monthly expenses, as well as income, income statements permits oversight of one’s financial health. You are able to see where you are spending in excess and where you can cut back on unnecessary expenditures. A well-structured and managed monthly or annual income statement will allow one to budget better and save more for those unexpected emergencies. Utilizing income statements to document...
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...Abstract This paper is about the importance of financial statements and their application in everyday life. Financial statements help determine the financial status of any individual or business. For example, a business manager uses financial statements to make important decisions regarding their business. Individuals on the other hand use financial statements as a way to budget their finances and allowing them to make major decisions such as buying a house or purchasing a new car. The main purpose of this paper is to show how a balance sheet is important for an individual and a business. * Select either the balance sheet or income statement and explain how the use of it may be applied to you everyday life. One of the financial statements is the balance sheet. This summarizes a company’s or individual’s assets, liabilities and equity at a specific time. On a given date, I use a personal balance sheet. This statement lists my assets, my debts, and my wealth or equity. Assets are the things that I own. My assets are my checking account, saving accounts, my 401K, the value of my house and car. Now, the debts or liabilities are what I owe to others and creditors. My debts are my mortgage payments, utility bills, etc. Wealth is the abundance of valuable resources or material possessions. By using this financial statement, I can spend within my income limits and choose whether or not to purchase an item. Also, I can get an outline of my finances and determine if I am spending...
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...Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. A balance sheet will give me the opportunity to take a closer look at my personal assets and liabilities like a snap shot; evaluate whether I should loan money to family and friends and view my net worth while I still living and when I die. When I prepare a balance sheet listing my assets, I will list the following: ~ Cash I have on hand ~ How many different bank accounts I currently have opened ~ How much to I owe to debtors ~ How many retirement accounts and with whom ~My investments (ex. Rental properties, stocks and bonds) ~Net worth of my life insurances policy(s) ~How many vehicles I own and their net worth My liabilities would include the following: ~Loans that I have from financial institutions ~Any unpaid taxes (IRS) ~Number of credit cards that have balances or currently opened to use. A balance sheet will assist me in my everyday financial planning by actually seeing what I actually have and what I owe to others. Before taking this class, I never sat down to create a balance sheet for myself, but I did create one in excel. After preparing this sheet, I was really surprised of what assets I owe that would go to my family in the case of my death, and the biggest eye opener; what I owe in debit. Reviewing my debit income opened my eyes to know that in the next five years, I want to be DEBIT FREE! I would like for my...
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...Abstract This paper explores the uses of financial statements, specifically the balance sheet and income statement. It explores them from a personal point of view and how the balance sheet is used in an everyday life of an individual using his own assets and liabilities and determining his net worth. As it also discusses how a manager can benefit his company by understanding the concept of a balance sheet and using it to determine how well the company is doing and its ability to pay its debts and continue in the business. This paper also discusses my understanding of the balance sheet and income statement and how they may be applied to my future position of planning to start a small business. Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. The accounting balance sheet is one of the major financial statements used by accountants and business owners. The balance sheet is also referred to as the statement of financial position. The balance sheet presents a company's financial position at the end of a specified date. Some describe the balance sheet as a "snapshot" of the company's financial position at a point in time. For example, the amounts reported on a balance sheet dated December 31, 2011 reflect that instant when all the transactions through December 31 have been recorded. (2012, Averkamp) Because the balance sheet informs the reader of a company's financial position as of one moment in time, it...
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...Assignment #1 – Application of Financial Statement Stormy Night Richard Winsmith ACC557 – Accounting I June 22, 2012 Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. In order for an individual to be in control of their personal financial future, it is imperative for that individual to understand their current financial health. They need to be able to assess their financial strengths and weaknesses. One way to achieve this is to create a personal balance sheet. A personal balance sheet is a snapshot of their financial situation at any given time. It is best to prepare a personal balance sheet at the end of a financial period, such as the end of a quarter or the year. A goal of most people is to eventually be able to retire from work and enjoy their golden years. In order to be able to achieve this goal, one must set interim goals associated with saving towards retirement. The only way to know if progress is being made toward achieving these goals is to take periodic measurements along the way. A personal balance sheet is very similar to that of a major corporation; it is comprised of assets, liabilities and owner’s equity. The assets would consist of cash, investments, any monies owed by a third party and personal possessions. The liabilities would represent monies owed to other parties such as a home mortgage, automobile or student loans and other debts...
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...Understanding Financial Statements and Cash Flow 2 LO 1 LO 2 LO 3 LO 4 Financial Statements, Taxes, and Cash Flow W hen a company announces a “write-off,” it frequently means that the value of the company’s assets has declined. AFTER STUDYING THIS CHAPTER, YOU SHOULD BE ABLE TO: Differentiate between accounting value (or “book” value) and market value. Distinguish accounting income from cash flow. Explain the difference between average and marginal tax rates. Determine a firm’s cash flow from its financial statements. For example, in the first quarter of 2009, luxury homebuilder Toll Brothers said it was writing down $157 million in assets, much of which was a reflection of the reduced value of land the company owned. Of course, Toll Brothers was not the only homebuilder suffering. Hovnanian Enterprises announced it would take a $132 million write-off, and Centex Corp. announced a $590 million writeoff. At the same time, D. R. Horton, the largest homebuilder by volume, had a much smaller write-off of only $56 million. However, D. R. Horton had already written off $1.15 billion in the fourth quarter of 2008. So did stockholders in these homebuilders lose hundreds of millions of dollars (or more) because of the write-offs? The answer is probably not. Understanding why ultimately leads us to the main subject of this chapter: that all important substance known as cash flow. Visit us at www.mhhe.com/rwj I 22 n this chapter, we examine financial statements, taxes, and cash...
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...All rights reserved. Writers Suchitra Govindarajan, Merrin Hughes, Claire Mahoney, Rachael Mullins, Kylie Nicholson, Steven Rao, Ron Tierney, John Wilson. Disclaimer Information supplied by the member companies of the MYOB group (whether in user documentation and other literature, video or audio material, training courses, websites, advice given by staff, or provided by other means) is intended only to illustrate general principles, and may not be complete, accurate or free of error. As accounting standards, taxation requirements, legislation and the circumstances of individual businesses vary widely, this information cannot be considered authoritative and may not apply to your specific situation. You should obtain competent advice from a qualified accounting, taxation, information‐technology or legal professional before acting on such information. To the extent permitted by law, member companies of the MYOB group are not liable for any special, consequential, direct or indirect damages arising from loss of function, profits or data resulting from your application of such information. In the event that any of the above limitations are found to be unenforceable, the MYOB member company's liability is limited to the return of any fees or monies paid for the purchase of the product or service. Decisions, Inc. in the United States or other countries. FlexNet Connect® is a registered trademark of Flexera Software™ Inc. Google Maps™ card links included with permission. Master...
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