Acc 291 Week 2 Summary

Accounts payable - The management of debt incurred and not yet paid. All invoices, statements and operational expenses are included.

The company position is strong enough so its better that company should use debt financing instead of equity financing.

According to an article in the CPA Journal, the auditor considers reliability of audit evidence collected and the reliability of that evidence to reduce the risk of financial statements containing undetected material errors. Compare and contrast at least two (2) types of evidence, and make a recommendation as to which you believe is the most reliable in reducing risk. Support your position.

Now one must ascertain that such regulations would only be applied under certain governance systems- a good government; a government that is liable to the people. In such cases, there should be funds available for social programs. I will classify social programs as two types, based on how they should prioritizes allocation of funds:

Although cash might only have a small dollar amount on the balance sheet, there are many reasons that an auditor might spend a lot of time auditing the cash account:

This course focuses on ways in which financial statements reflect business operations and emphasizes use of financial statements in the decision-making process. The course encompasses all business forms and various sectors such as merchandising, manufacturing and service. Students make extensive use of spreadsheet applications to analyze accounting records and financial statements. Prerequisites: COMP100 and MATH114 / 4-4

4. Total conversion cost = $128,000 + $16,000 + $9,000 + $64,000 + $41,000 + $35,000 + $46,000 = $339,000

The holding period of the partnership interest includes the partner’s holding period for the 1232 assets contributed. The

Since the majority of US thrive on the use of credit cards, the accounts receivables for a company may no longer be on a cash-to-cash basis. A company may need to sell these accounts to other companies who specialize in handling accounts receivables if they need cash more quickly or if it would be too costly to perform the necessary billing to collect on the account.

“The ACH procedure has the offsetting advantage of focusing attention on the few items of critical evidence that cause uncertainty or which, if they were available, would alleviate it.” (Heuer, 1999). Conclusions are derived from analysis of data, evidence is compared to possible hypotheses, and a hypothesis assessment is based on the reliability of the sources and validity and plausibility of the intelligence. Confidence levels are labeled as high, moderate, and low by ICD 203 standards.

Larson Inc. must consider the alternative economic futures for their industry. In any market, economic conditions will change over time. The company must be able to adapt and change with the economy to remain successful. The company needs to find solutions for the changing economy to keep increasing their revenue and decreasing their costs. The economy may go through a recession, expansion and peaks over their years in business. Larson, Inc. needs to analyze the difference scenarios and determine the best course of action for each type of economic future. Also, the company must consider the economy’s stage in the business cycle to make well-informed decisions.

The boards proposed a standard by which revenue would be recognized entirely based on the firm’s contract with the customer. Any remaining rights or obligations in the contract would give rise to net contract assets or net contract liabilities. Under the proposal, revenue would be recognized based on the changes in rights and obligations under a contract entered into with a customer. Rights (assets) arise from a customer’s promise of cash or other compensation while obligations (liabilities) arise from the firm’s promise to transfer assets to the customer. Revenue is recognized whenever there is an increase in contractual assets or a decrease in contractual liabilities or a combination of both. Remaining rights under the contract are measured, the balance of which will create a net contract asset or a net contract liability.

Accruals. This occurs when sales and expenses are recorded when they incur, not when they are paid out or the payment is received. In other words, the record should be made immediately no matter if the payment was received or not, paid out or not yet. Accruals can be called unpaid bills, sales on credit and other expenses over due.

Account receivables accounts for purchases which consumers have not yet aid for. This takes cares of any losses that the firm might incur due to allowing credit to certain clients. Bad debts are recorded in the income statement and they represent the des which the company doesn’t expect to be paid back. The account

In addition, the distinction between capital expenditure and revenue expenditure made by Frank Wood and Alan Sangster (2012) is supported by Weetman (2011). She defines capital expenditure as “spending on non-current assets” (Weetman, 2011, p. 438). This supports the definition in Wood and Sangster’s book as this implies that the value of long-term assets is being increased and this would then, in turn, be used to calculate the figures for non-current assets in the Statement of Financial Position. There is also support from Caldwell and Rod (2011, p. 17) who explain how revenue expenditure will either not provide any economic benefit in the future (i.e.: not cause the value of the business to increase or generate further income) or, if it does, it would not be affect any figures in the Statement of Financial Position for non-current assets. Additionally, they place further emphasis on how revenue expenditure has short-term effects as opposed to the long-term effects of capital expenditure. An example of this can be when money is spent on petrol for a van. This will only allow it to function for a short period before it will require more petrol, therefore making it a form of revenue expenditure. Alternatively, if money is spent on fitting the van with improved headlights then this will last for a number of years and so can be