Purpose of Assignment
This week’s activity illustrates the role a company’s accounting method plays in financial statement reporting. In this assignment students evaluate the events occuring in a business setting and determine how to properly analyze those events to identify the impact on both cash and accrual accounting methods.
Assignment Steps
Resources:Generally Accepted Accounting Principles (GAAP) U.S. Securities and Exchange Commission (SEC)
Tutorial help on Exceland Word functions can be found on the MicrosoftOffice website. There are also additional tutorials via the web offering support for Office products.
Scenario:BizCon a consulting firm has just completed its first year of operations. The company’s sales growth was explosive. To encourage clients to hire its services BizCon offered 180-day financing – meaning its largest customers do not pay for nearly 6 months. Because BizCon is a new company its equipment suppliers insist on being paid cash on delivery. Also it had to pay up front for 2 years of insurance. At the end of the year BizCon owed employees for one full month of salaries but due to a cash shortfall it promised to pay them the first week of next year.
As the senior accountant the Chief Financial Officer has asked you to prepare a memo to be sent to management notifying them of the delayed wage payments.
Preparethe memo in a maximum 700 words including the following information to better outline the situation:
Formatyour assignment consistent with APA guidelines.
Grading Guide
Content
Met
Partially Met
Not Met
Comments:
Explained how cash and accrual accounting differs for each of the events listed in the scenario and describe the proper accrual accounting.
Assessed how at the end of the year BizCon reported a favorable net income yet the companys management is concerned because the company is very short of cash. Explained to management how BizCon could have positive net income and yet run out of cash.
The memo is a maximum 700words in length.
Total Available
Total Earned
4
#/4
Writing Guidelines
Met
Partially Met
Not Met
Comments:
The paperincluding tables and graphs headings title page and reference pageis consistent with APA formatting guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a reference page.
Paragraph and sentence transitions are present logical and maintain the flow throughout the paper.
Sentences are complete clear and concise.
Rules of grammar and usage are followed including spelling and punctuation.
Total Available
Total Earned
2
#/2
Assignment Total
#
6
#/6
Additional comments: