Balance Sheet and Accounting

A line of credit is an informal agreement that permits a company to borrow up to a prearranged limit

S., & Hassan, M. K. (2012). The domination of financial accounting on managerial Commerce & Management, 22(4), 306-327. doi:10.1108/10569211211284502

I suspect that most of us can view and appreciate most sports such as baseball, football, and basketball. What if you were to view a Cricket World Cup game? If you didn’t know the rules you probably would not have much fun. The same happens in business if you don’t understand its language – Accounting. What rules impact a business’ Accounting Information System? What types of compliance is required?

| |Write a 700- to 1,050-word paper analyzing the disclosures contained within the notes to the | | |

The financial crisis of the early 2000s left many investors and stockholders nervous about the accuracy of financial statements issued by public companies. The financial crisis resulted after many previously successful companies suddenly tanked due to restatement of their financials. These companies include Enron, Tyco, Sunbeam, Rite-Aid, Xerox and WorldCom amongst others (Kieso, 2014, p. 17). How could many previously successful companies suddenly go belly-up? The evidence was to be seen, these companies had used malicious accounting techniques to hide massive amounts of debts and increase their assets without having to show them accurately in a fair and honest way on their financial statements.

Baruch Lev and Feng Gu authors of “The End of Accounting and The Path Forward for Investors and Managers” indicate that over the past 110 years, the structure and content of financial reports has not changed, and that the role that these reports play in influencing the decisions of investors has greatly diminished. Lev and Gu make a case that non-transaction events that are not captured by the financial reports such as those disclosed through 8-k filings with the Securities and Exchange Commission (“SEC”) have a greater impact on stock prices, and thus more useful to investors. In addition, they suggest that one of reasons for the decline in usefulness of financial reports stems from the increase of estimates that has made its way into these reports (Lev and Gu 2016).

The United States has become increasingly concerned with the quality of earnings reported from companies. Although the quality of earnings should be able to be used as a predictor to the future of the company, management policies have been able to find a way that makes the company seem as if incoming income is steady, even if it is not. Ways like over and understating stating expenses can make a company seem better than they are. While the use of non-GAAP earnings can have benefits, many individuals are worried that using non-GAAP earning will lead to giving out false financial reports. No matter the accounting method used, all managers must act ethically on behalf of the law, and the company.

Balance sheets and income statements are a snapshot of a company’s stability and financial situation. Combined the statements show the income, expenses, and stockholder’s equity in the company. These statements are often analyzed by financial institutions when a company comes to them needing a loan. Stockholders and other investors also look at these statements to make sure their investment will return a profit for them. This paper will look at four different companies and their balance sheets and income statements. The companies are Eastman Chemical Company, Covenant Transportation

The balance sheet and Income statement are the most important financial statements of the company that help conduct current analysis of company and evaluate its trends overtime. The balance sheet represents the company snapshots of its financial position on the last days of accounting period. Apple balance sheets, which represent a snapshot of its ending balances in asset, liability and equity account as of the date stated on the report, are changes each year from 2003 to 2014. On the other hand, the income statement shows its financial performance over 2003 to 2014. Apple basically ends its accounting period in September. Most of the long-term debts are in the form of the bonds. According to appleinsider.com, Apple recently issues a new euro bond worth about $2.26 billion with a maturity date on January 17, 2024 and coupon rate of 1.375% payable annually. The first payment will occur on January 17, 2016. Moody’s recently assigned a rating of Aa to Apple Inc. 's senior unsecured note issuance. Thus, Apple recent capital expenditure amount to 11,488 million according to morningstar.com. The analysis of financial statements is conduct to compare Apple with one of its closest rival Hewlett-Packard and twelve ratio were calculated. From table1 and chart1, the current ratio that determine the company ability to meet its short term obligation shows Apple’s current ratio is higher than that of Hewlett-Package from 2003 to 2014. That is, Apple is solvent than Hewlett Packard. Table

Financial results and conditions vary among companies for a number of reasons. One reason for the variation can be traced to the characteristics of the industries in which companies operate. For example, some industries require large investments in property, plant, and equipment (PP&E), while others require very little. In some industries, the competitive productpricing structure permits companies to earn significant profits per sales dollar, while in other industries the product-pricing structure imposes a much lower profit margin. In most low-margin industries, however, companies often experience a relatively high rate of product throughput. A second reason for some of the

This requirement for neutral financial reporting is so important to investors that the SEC maintains and enforces financial accounting standards specifically designed to achieve neutrality. Yet, bias in financial reporting occurs, whether it is deliberately or unintentionally introduced. Various accounting and economic theories have been introduced to explain and predict the occurrence of biased accounting practices.

2. At the end of its first year of operations, Matlocke Company has total assets of $2,000,000 and total liabilities of $1,200,000. The owner originally invested $200,000 in the business, but has not made any further investments or taken any withdrawals. What is the first year 's net income for Matlocke Company?

positive accounting hypothesis (PAT) estimates that, in flawed markets, accounting decision may be controlled by directors looking to impact reported income and capital structure (Watts and Zimmerman, 1978). Specifically, the positive accounting hypothesis (PAT) contends that accounting decisions are liable to be spurred by components, for example, supervisors ' extra arranges, the company 's obligation/value proportions and the more extensive political impact of outsiders (Watts and Zimmerman, 1978; 1986).

An important function of the accounting field is to provide external users of financial statements with assurance that the financial information being presented is both reliable and accurate. This basic function of accounting is so important that there is an entire field of experts, called auditors, dedicated to assuring its proper performance. Throughout history there have been many instances in which the basic equilibrium between an institution and current/potential investor has been threatened due to a lack of accountability and trust between the two parties. This issue has been the catalyst for many discussions regarding the proper procedures a firm should follow in order to provide

The Burns and Scapens framework for analyzing managerial accounting change was built on the study of old institutional economics, which sees "economics as a process of social provision, subject to multiple and cumulative causation." This view culminates in a model that argues that the managerial accounting practices at institutions are subject to a process of constant change, influenced by routines and rules. The institutions contribute to these routines and rules, but so do actions on the part of managers within the institutions. By combining multiple influences over time, we arrive at modern managerial accounting practice. In other words, Burns and Scapens tells us that managerial accounting practice changes over time, influenced by a number of factors including rules, routines and actions.