...Checkpoint Accounting Assumptions Principles, And Constraints Diana Michalak XACC/280 Sara Carpenter August 5, 2011 The basic assumptions of accounting consist of four assumptions. Monetary Unit Assumption, which states that “only transaction data that can be expressed in terms of money be included in the accounting records(Ch 7.).” Economic Entity Assumption, which states that “the activities of the entity be kept separate and distinct from the activities of the owner and of all other economic entities. (Ch 7)” The Time Period Assumption which is an assumption that “the economic life of a business can be divided into artificial time periods (Ch 7).” The Going Concern Assumption which states that “the company will continue in operation long enough to carry out it’s existing objectives (Ch 7.).” The Principles of accounting consist of 4 principles. The first principal is The Revenue Recognitions Principle. This principle “dedicates that companies should recognize revenue in the accounting period which it is earned (Ch 7).” The second one is The Matching Principle which dedicates “that companies match expenses with revenues in the period in which efforts are made to generate revenues (Ch 7).” The third is the Full Discloser Principle which requires that companies disclose certain circumstances and events that make a difference to financial statement users (Ch 7).” The fourth one is the Cost Principle which “dedicates that companies record assets at their cost...
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...Accounting Assumptions, Principles & Constraints Greg Young XACC/280 03/10/2013 Salena Ford Accounting assumptions provide a foundation for the accounting process. There are three major assumptions; the monetary unit, economic entity, and time period assumptions. The fourth assumption is the going concern assumption. The Monetary Unit Assumption makes it mandatory that only transaction data that can be expressed in terms of money be included in the accounting records. The reason for this is so that a company does not put a dollar value on something that cannot be expressed easily, such as the president of a company. The Economic Entity Assumption states that the activities of an entity be kept separate and distinct from the activities of the owner and of all other economic entities. An example of this would be the assumption that the activities of Budweiser are different from other breweries such as Coors or Guinness. The Time Period Assumption states that the economic life of a business can be divided into artificial time periods. This assumption is stating that companies are able to divide their activities in months or quarters for financial reporting purposes. The Going Concern Assumption assumes that a company will continue to operate long enough to complete their existing objectives. Accounting principles area basically a guideline on how to properly record and report economic events. The revenue recognition principle dictates that companies should...
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...Accounting Assumptions, Principles, and Constraints Hcemac XACC/280 · There are three major guidelines that are used in the conceptual framework of accounting also known as assumptions, principles, and constraints. Assumptions provide a foundation for the accounting process (Weygandt, Kimmel & Kieso, 2008, p. 297).These include monetary unit assumption which states that only monetary data can be reported, economic entity assumption which states that entities such as the owner’s personal finances and the business must be reported separately and the same rule applies to more than one enterprise, the time period assumption states that a businesses economic life can be divided into time periods such as monthly, quarterly, or annually, and going concern assumption works on the basis that a company will operate long enough to complete its given objectives (Weygandt, Kimmel & Kieso, 2008) . The basic principles of accounting include revenue recognition which states that organizations should recognize revenue with-in the time period that it is earned. The matching principle state that expenses should be match to revenue in the time frame in which effort were made to generate the revenue. The full disclosure principle requires organizations to disclose pertinent information from financial statements to users (including investors) and the cost principle states the organizations must record assts at...
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...Information Systems Department Week One Checkpoint Name XACC/280 Date Information Systems Department There is Information system with in every business organization. Be it a computer based or hardship bases. There are some types if not both types of information systems. Information systems are where the technology is used between both operations. This technology helps everyone stay on top of what is going on. It helps to keep everyone posted and up to date. There are several types of systems to the Information System to be made up. You will need all of them to get a great business or a large business to run properly. Two of these examples are The Wal-Mart check out person, and the Credit Card application analysis. The Wal-Mart check out person will be in the Transaction processing system type. Their job description would to process transaction and their data for the business to see what and how much they are exactly selling. They need this person to finalize everything for the corporation to see what they have sold. The Credit Card approval analysis is in the Expert System type, and make the decision on whether to give the person a credit card or not. But this is based on a credit score that the person has so they basically are just telling the person what the computer says. They need this person in business to make sure people with good credit scores can keep up with their good credit by buying things from this card; and people with bad credit cannot hurt themselves...
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...Financial Analysis of Coca Cola versus PepsiCo, Inc. Axia College of University of Phoenix Financial Analysis of Coca Cola versus PepsiCo, Inc. There are two major competing companies that manufacture beverages. They compete for the number one manufacturer and distributor spot for beverages worldwide. Both companies are immediately identifiable almost anywhere. They are PepsiCo and Coca-Cola. They have so thoroughly saturated the markets around the world that they enjoy universal recognition for their company and for their products. Historically, these are the major competitors in the “Cola wars”. They both produce flavored water, regular water, and soft soda drinks. Coca-Cola (Coke) and PepsiCo, Inc. (Pepsi) target all income brackets across the globe due to their ability to produce products which they have convinced millions of people are attractive and reasonably priced. This makes people buy them regardless of their income level. We will review these companies’ income statements and balance sheets to reveal the financial condition of the companies in relation to one another. After an introductory discussion of the companies, we will perform vertical and horizontal analyses from their annual report financial data and then will provide recommendations on each company. There are a wide variety of distributors in these markets, but Coke and Pepsi have stayed number one and two for decades. They have reached far beyond their...
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...Internal Controls XACC/280 Internal Controls are an integral part of an organization’s financial and business policies and procedures. They consist of all various measures take to protect resources, ensuring accuracy and reliable data in accounting as well as operations, securing compliance with policies, and evaluating performance within the organization. Every bit of an organization’s recourses are directed, measured and monitored by Internal Controls. Internal Controls safeguard all of a company’s (or organization’s) assets from fraud, theft or any type of robbery. They also enhance accuracy within its accounting records by reducing errors and regularities (unintentional or intentional). It is good business practice for all organizations to have Internal Controls that focus on safeguarding assets and manage all resources. It is checks and balances type of protection and provides assurance of reliable operational and financial data, effective and efficient operations, and compliance with state and federal laws as well as internal policies. In July 2002, the Sarbanes-Oxley Act (SOX) was signed into law. Composed by Senator Paul Sarbanes and Representative Michael Oxley, this act, compiled of eleven titles, set a number of non-negotiable deadlines for compliance by corporations. This act was due to outbreak of corporate scandals and bankruptcies in 2000, such as Enron, Tyco International, World Com, and Adelphia. With the collapse of these corporations and the loss of...
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...Brandon Watkins /Exam #1 Improvement Question 10. Univeo, Inc. had revenues of $245,000, expenses of $180,000, and dividends of $45,000 during 2015. Which of the following statements is correct? a. Net income for 2015 totaled $20,000. I Selected b. Net income for 2015 totaled $65,000. Correct answer c. Total retained earnings decreased by $20,000 during 2015. d. Total retained earnings increased by $65,000 during 2015. I originally chose this answer because I subtracted everything so there was nothing outstanding. I found out that the dividends are in a separate category so they are not included in the calculation. Question 21. Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in: a. the cash flows from financing activities section. b. a separate schedule. c. the cash flows from operating activities section. Correct d. the cash flows from investing activities section. I selected I selected my answer because I was thinking that they had not paid off the equipment so I was thinking investments I found out that the equipment is what makes the factory run so it has considered operational Question 25 A&M Co. provided services of $1,000,000 to clients on account. How does this transaction affect A&M's accounts? a. Increase cash and decrease accounts receivable by $1,000,000 each b. Increase accounts receivable and revenues by $1,000,000 each Correct c. Increase accounts receivable and cash...
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...Internal Control XACC/280 08/14/2011 In this world, companies and businesses need a way of monitoring themselves, particularly in the accounting department. This is an act of preventative maintenance, ensuring that the financial reporting is reliable. Any successful business has a strong internal control model, without it, operations won’t run efficiently. A type of feedback, internal controls look at the quality and functionality of different aspects of a business ( eHow Money, n.d.). Its similar to the computer of an automobile, the computer receives feedback from all the different sensors and parts from the engine and the engine makes small adjustments to fuel and air ratio as well as tells the driver of any serious problems via check engine light and other dash indicator lights. A strong internal control model will ensure your company has the most reliable financial records along with having a greater unity between departments and great moral all together. The Sarbanes-Oxley Act of 2002 is a federal law which protects investors against fraudulent accounting activities. The main goal to lower and prevent accounting fraud, the Sarbanes-Oxley Act (SOX) introduced major changes in regulating in financial practices and corporate governance all together. The SOX was implemented after many major accounting scandals came to light, including Enron and WorldCom. The new rules and regulations of the SOX act either amend or supplement the existing rules and regulations. The...
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...Week 1 Check point 2 There are three basic elements to an accounting equation and they are Assets, Liabilities, and Owners Equity. You simply need to remember A=L+OE (ALOE) for short. The first element is Assets and they are all the things that basically make up the business. The text reads that assets may include the following cash, property, plant, and equipment. The next element is Liabilities and liabilities are when you borrow money (loan), when you get something financed for example the purchase of a car. The last and final element is called the Owners (Shareholders) Equity. The Owners Equity is basically the money that is left after paying all of that companies bills, for example the employees’ wages, their electric bill, and mortgage/lease for their building etc. If the company is incorporated they can sell stock to people and that person would own small part of the business. If the company is private then that is when you would call this category Owners Equity. Financial Accounting Accounts Payable, this is a liability, because this is a financial obligation of the business. Cash, is an asset, this is the thing that makes up a business. Cleaning equipment, is an asset, this is what’s in the building. Cleaning supplies, is an asset, this is what’s in the building. Accounts receivable, Stockholders, this is money/assets left after owners pay their financial obligations. Notes Payable. Is a liability, this is the financial obligation of the business. Salaries...
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...CheckPoint Impacts of Unethical Behavior XACC/280 March 11, 2014 The company that I chose to research is Tyco International. Tyco International was involved in an unethical behavior many years ago. Suspicions came up about there being some wrongdoings being done in the accounting department, and there was. At this point an investigation began; after a few years of investigation, in 2002 it was announced that Dennis Kozlowski (Tyco’s former CEO) , Mark Swartz (Tyco’s former CFO), and Mark Belnick (Tyco’s chief legal officer )had taken a total of over $170 million in unauthorized loans from Tyco for their personal uses. These unauthorized loans were all noted as bonuses which the three men seemed to think that no one would ever notice this suspicious activity. If I had been an accountant for this company, I would have reported to whomever I would have had to about my suspicions as soon as I noticed that something indeed was not right about the numbers, because when it comes to business and in life in general I am all about being ethical and doing the right thing. I believe that the criminals in this scandal got the charges that they deserved overall. I am not sure if anything could have really been done to prevent this tragic scandal, but I would just give the company the advice to keep tabs on all of their employees including CEOs and the men and women who may be higher up in the company. I’m sure that this was done on computers so; I would say that keeping tabs on company...
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...Internal Controls <Name> XACC/280 <Date> <Instructor> Internal Controls (a) Indicate the weaknesses in internal accounting control over the handling of collections. There are many weaknesses in the current process in which the church collects, documents, and secures the weekly collections. The first problem is that the finance committee, who prepares the annual budget and approves major disbursements, are not involved with the collection and record keeping process. How can a group which has that much power not be involved in the collection and security of such an important asset of the church which is the cash? Next, no internal audit of the finances has been done in 15 years because they trust the financial secretary who has been in the position for 15 years. Regardless of how long a person has been in charge of the collections, bad things happen to good people all of the time. And if this trusted person did mishandle the church funds, the church has no fidelity insurance to protect them from any losses. There are also problems with the collection process itself. Once collected, the ushers take it to the basement of the church where it is left with one person, the head usher, who counts the money alone, documents the amount, and places the collection in the safe. The head usher position is a three month volunteer position. The church is putting too much trust in these individuals. They are counting the money alone and they access to the safe. This...
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...Running Head: Reversing Entries CheckPoint: Reversing Entries XACC280 Week 5 Writer’s Name Course Name, Semester No, Class Level Supervisor Name February 10, 2010 ANSWER KEY BE4-12 At October 31, Nathan Company made an accrued expense adjusting entry of $1,400 for salaries. Prepare the reversing entry on November 1, and indicate the balances in Salaries Payable and Salaries Expense after posting the reversing entry. Nov. 1 Salaries Payable .......................................................... 1,400 Salaries Expense ................................................. 1,400 The balances after posting the reversing entry are Salaries Expense (Cr.) $1,400 and Salaries Payable $0. What do you consider might happen if: 1. Revenue accounts are not closed? Explain why. At the end of the accounting period, closing entries are made to prepare the accounts for the next accounting period. During this step, Temporary Accounts (All Income Statement Accounts as well as the Dividend Account) are closed. Therefore if the Revenue account is not closed, the company’s net income will be overstated for the next accounting period which would give an incorrect picture of the company’s operations in the period under examination. 2. Expense accounts are not closed? Explain why. The same logic applies as in number 1 above; only in this case expenses for the next accounting period would be overstated and net income would be...
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...3 Adjusting the Accounts Chapter STUDY OBJECTIVES After studying this chapter, you should be able to: 1 Explain the time period assumption. 2 Explain the accrual basis of accounting. 3 Explain the reasons for adjusting entries. 4 Identify the major types of adjusting entries. 5 Prepare adjusting entries for deferrals. 6 Prepare adjusting entries for accruals. 7 Describe the nature and purpose of an adjusted trial balance. The Navigator ✓ The Navigator Scan Study Objectives Read Feature Story Read Preview Work Demonstration Problem Review Summary of Study Objectives Answer Self-Study Questions Complete Assignments ■ ■ ■ Read text and answer Before You Go On p. 97 ■ p. 104 ■ p. 109 ■ p. 114 ■ ■ ■ ■ ■ ✓ Feature Story WHAT WAS YOUR PROFIT? The accuracy of the financial reporting system depends on answers to a few fundamental questions: At what point has revenue been earned? At what point is the earnings process complete? When have expenses really been incurred? During the 1990s’ boom in the stock prices of dot-com companies, many dot-coms earned most of their revenue from selling advertising space on their websites. To boost reported revenue, some dot-coms began swapping website ad space. Company A would put an ad for its website on company B’s website, and company B would put an ad for its website on company A’s website. No money changed hands, but each company recorded revenue (for the value of the space that it gave the other company on its site). This practice...
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...Internal Controls XACC/280 m m Internal controls are an integral part of a business operation because of the extreme importance of assets. Assets are basically an economically valued item owned by an individual or corporation, which most often has a direct conversion rate to cash. Examples are cash, securities, accounts receivable, in-stock product, business equipment, real-estate, cars, and other valuable property. Assets are business resources which could lead to being able to generate future services and benefits. Operational goals of profitability are achieved through a company’s assets. These are the resources and possessions which allow businesses and corporations to provide goods and services to generate profits. Assets can be current assets like cash, accounts receivable, inventory, and prepaid expenses that generate profits or gains within the current accounting period. They also can be long-term items such as property and business equipment. Since these assets are a businesses’ or corporations’ most valuable resources, they must be protected from theft and unauthorized use by creating, and implementing, a company “internal controls system.” Internal controls are procedures and protocols by which a company conducts internal monitoring. Through taking it upon itself to audit its own business dealings, a company increases the chance of success. Also, these controls systems ensure the liable parties invested in companies that their business are running...
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...INTERNAL CONTROLS JANINE LEWIS XACC/280 DECEMBER 8, 2013 JOSE RODRIGUEZ INTERNAL CONTROLS Internal controls are methods that companies put in place to protect themselves from errors, internal fraud or corruption. The methods consist of review, checks and balances, and procedures that make sure a company’s business is being conducted orderly and efficiently. They also ensure that the policies and procedures that are put in place are being adhered to. Internal controls are necessary for many reasons; however there are two primary goals. One is to protect the company and prevent theft, errors, fraud, and unauthorized use of resources and assets. The other is to detect and quickly reconcile any errors that may occur, and ensure that accounting and financial data is accurate and reliable. The Sarbanes-Oxley Act of 2002 was put in place as a result of the many corporate scandals that has happened. Under this act, companies are required to have an internal control system in place. If a random or scheduled audit discovers a company does not, they are subject to fines and possible jail time. SOX have affected internal controls in several different ways. In one way, it keeps a continuous watch over a company’s internal control system to ensure that the current methods continue to be reliable and effective. For example, over time, a company may change its computer system, its reporting method, or other ways pertaining to their finances...
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