Accounting is the process of recording, classifying, and summarizing financial transactions to provide helpful information for business decisions. To write a good paper on the subject, a student must have a strong understanding of accounting fundamentals.
It is also essential to be familiar with how to approach different transactions and processes. For example, revenue recognition, inventory valuation, and depreciation methods significantly impact financial statements. Fortunately, there are multiple free samples on EssayBizLab that can be used as study resources. Taking the time to understand the key concepts helps you write a good paper.
The theory refers to an asset pricing model based on the idea that t is possible to project the returns of a particular asset by establishing the relationship existing between the asset and the existing risk factors. Arbitrage Pricing Theory (hereafter referred to as APT) is based on the assumption...
It is important for the accountant to understand risk and conduct risk assessments since the accounting field is often dynamic and multifaceted. Specifically, it is essential to understand the risk in order to have a clear knowledge of the effective evaluation of the internal and external control systems to prevent...
A flexible budget refers to a summary of intended expenditures along with proposals for meeting them. It allows room for changes to be made depending on the amount of work done. Flexible budgets are very effective compared to static budgets, which maintain the same monetary allocation regardless of whether the...
Manufacturing overheads are the indirect cost of production. Examples of these costs are depreciation of plant and machinery, electricity bills, and purchase of factory equipment, among others. It is difficult to trace the production overheads to the units of output produced. However, it is important that they be allocated to...
It is vital for the company’s management to come up with uniform and clear standards of accounting and operating procedures, as this enhances consistency and allows all the staff members to follow similar organized standards. By sticking to the appropriate financial accounting practices, the management is able to manage earnings...
Revenue Financial statement users would need assurance that revenue recorded actually exists because it enables shareholders in the firm to ascertain the profits and the dividends that would be apportioned to them. Revenue has to be recorded in the period within which it was earned and then be matched with...
Normally accounts receivable are recovered over the credit period allowed extended to recover. But certain receivables are not recoverable due to a variety of reasons that differ from business to business and individual and other circumstances of the debtors. A business, on the basis of its experience over a period,...
Fraud refers to illegal acts such as policy violations and financial misstatements that are committed by or on an organization. Fraud affects organizations in a number of ways, such as loss of company reputation, values, and finances. The fraud triangle enables organizations to assess fraud risk. Fraud theory asserts three...
Revenue Financial statement users would need assurance that revenue recorded actually exists because it enables shareholders in the firm to ascertain the profits and the dividends that would be apportioned to them. Revenue has to be recorded in the period within which it was earned and then be matched with...
Responsibility accounting is a key component of accounting systems for companies when the measurement process for performance gets more intricate; the process requires the allocation of the responsibility of accounting to a specific person or group for particular segments of the company. These segments are usually organized as responsibility centers...
The depreciation charge is calculated on the estimated useful economic life of the assets at the time of acquisition. If there is a change in the estimated economic life during a period when the asset is under use by the businesses, then there is a need to amend the depreciation...
Management accountants play a pivotal role within an organization in terms of influencing prolonged success. They have numerous ethical responsibilities with regard to helping their organizations achieve various objectives. First, management accountants have the ethical responsibility of ensuring the confidentiality of financial information within a business. For example, they should...
Management accounting refers to the process of identifying costs within an organization with regard to processes that influence inventions, operations, savings, and decision-making. Management accounting plays a pivotal role in influencing the ability of an organization to develop effective budgets, identify sources of its various costs, and facilitate the effective...
Accepting IFRS will offer comparability, improved audit effectiveness, minimized information misconstruction, and expenditure savings as increasing financial transactions become universal. The adoption of IFRS as well provides a remarkable chance in the accounting field. Shifting to a totally new reporting framework eventually may facilitate corporations to rationalize accounting practices and...
The extent to which the state government should influence the policies of corporations has been the subject of numerous debates for quite a while. While seemingly providing a short relief to the company leaders in their efforts to guide the organization in a particular direction, state corporate governance, in fact,...
Absorption costing assigns a proportion of the fixed cost of production to the units produced. This share is added together with the direct cost of production for each individual product to obtain the total or the full cost of producing a unit of output. The fixed costs are assigned using...
Different stakeholders utilize government financial reports, and the three main categories of users include investors and creditors, oversight and legislative officials, and the citizenry. Moreover, government financial reports are used for various reasons, such as in the process of making social, political, and economic decisions. Considering the variations with regard...
Absorption costing This costing system is also known as full costing, and it refers to a costing methodology whereby all the costs that are incurred in the production process are incorporated into the respective product costs. Therefore, “the direct labor cost, direct material costs, fixed and variable overhead costs incurred...
Inherent risk refers to the propensity of asserting a material misstatement. The misstatement can occur either individually or as an aggregate. Inherent risk varies depending on the classes of transactions, account balances, and disclosure. Therefore, the risk can be greater in some assertions compared to others. For example, “the degree...
Accounting methods refer to rules and principles that are adopted during the preparation of income reports, evaluation of expenses in books, and treatment of income tax returns. The accounting method adopted by a business has a great influence on the taxes payable as well as the ability of a firm...
Materiality is important to auditors when preparing financial statements. It is a vital consideration when persecuting professional misconduct. Materiality entails both specialized and official definitions to increase financial consideration by auditors. This can be grouped in three proportions. These proportions include principal markets collision, the level of ambiguity implicated, and...
The government-wide financial statements are the statements that focus on the whole government. In the preparation of these statements, there is no consolidation since there is always a need for intra- entity transactions that should be eliminated. In the preparation of the government-wide statements, the most commonly used basis is...
Accounting methods used by an entity determine how the transactions are recorded in the books of accounts of that company. Jan says the most common methods of accounting are the cash and accrual basis of accounting. One basis of the difference is the recording of cash in and out in...
Governmental fund financial statements demand the accrual basis of accounting as well as the focus on financial resources at the time. In addition, governmental funds such as general funds and special revenue funds are financed with aids, taxes, and other sources. In this case, there is no possibility of matching...
Dating back to the 13th century, the invention of double-entry bookkeeping opens a plethora of opportunities for a present-day accountant. By adopting the principles of double-entry bookkeeping, an accountant is capable of improving the accounting standards by raising the accuracy of calculations a few notches and making the communication process...
There are a number of pros and cons regarding both the cash method and the accrual type of accounting, yet a noticeable tendency for most major companies to opt for the latter, while less influential SMEs prefer the former for managing their financial transactions persists in the global market. The...
No, when a mass manufacturer becomes leaner, the traditional accounting framework must also become leaner. Conventional accounting methods aim to maximize worker and machinery performance to achieve the minimum available cost per unit. Nevertheless, the facility’s lean accounting strategy is focused on delivering customer-driven significance (Nguyen, 2018). In a typical...
Materiality is important to auditors when preparing financial statements. It is a vital consideration when persecuting professional misconduct. Materiality entails both specialized and official definitions to increase financial consideration by auditors. This can be grouped in three proportions. These proportions include principal markets collision, the level of ambiguity implicated, and...
Palmart, Enron, and WorldCom are considered the greatest corporate disasters in the accounting circles. These companies were all brought to bankruptcy by the use of creative accounting. The result was massive losses to shareholders, creditors, and other institutional investors. The question remains whether stringent guidelines in accounting could have prevented...
A company can report a net loss, yet there is an increase in cash for this entity. This is well explained by the fact of the existence of different components in the cash flows statements. The key components of the cash flow statement include financing, investing, and operating activities. A...
Merchandise inventory is the total cost of goods on hand available for sale at any specific point in time. Keeping close track of merchandise inventory is essential for running an effective business operation since it allows the management to calculate the costs of goods sold in a given period for...
From an ethical point of view, accounting is a common area of improper business conduct. When business people have some financial issues, they can turn to an accountant who can help forge some documents. For accountants, this is a problem since they were hired and received money for their work,...
In case Steinway Piano is not implementing the activity-based costing in their organization, it will result in persisting with the value-less activities in their production process. The actual cost of each of the processes cannot be identified and assessed separately, and thus total cost control cannot be implemented in the...
I think that Steinway Piano is a good candidate for Activity Based Costing. The unique manufacturing process adopted by Steinway involves complex and diversified processes for ensuring maximum standardization for the finished products. As it involves varied steps for processing, the actual cost incurred for each step of the process...
The Sarbanes-Oxley Act is a very detailed description of the government’s decision to ensure that each corporate operating within the United States is transparent and accountable. The Act specifies sanctions that are meant to enhance compliance. To achieve this, the Act orders that all companies disclose all new changes as...
Balance of payment (BoP) involves an accounting system that endeavors to explore how two or more countries conduct their international transactions within a given duration of time. An international transaction between two countries can be recorded as a debit or a credit transaction. In a credit transaction, money tends to...
As noted by Mudel, there are six major factors that can motivate the use of creative accounting by managers. First of all, this can be desirable in order to meet certain targets that were established for the period. Some examples of such targets can be the expected values of sales,...
Cost accounting refers to the branch of accounting that is concerned with costs incurred in the production of units of an organization, while financial accounting refers to the branch of accounting that deals with recording financial data of a company to show the business’s exact position. Cost accounting develops information...
Tax reform is a change in the taxing system of a country. Changes in the tax system have different implications, both negative and negative depending on the diversion of its effect and impact; for instance, income tax, value-added tax, and land taxes often happen to be subjects of change in...
The Sarbanes–Oxley Act, also known as SOX, is, perhaps, one of the most famous statewide standards for public organizations in general and public accounting companies in particular. Presupposing that the accounting process should be supervised more closely, the law presupposes that closer supervision of the accounting processes within a company...
Background Financial Accounting Standard Board (FASB) was established in 1973. The main role of the board is to develop standards. The operations of the board are independent of businesses or other organizations in the business environment. The standards set up by the board guide in the preparation of the financial...
Activity-based costing is a method that assigns costs to products or services depending on the amount of wherewithal that they consume. Managers can use this costing method for internal reporting on costs and decision-making (Freedman 2012). Even though the ABC system is only suitable for internal financial reporting, organisations can...
Introduction Cost systems are methods of accounting that companies use in an effort to determine the value of developing a product in relation to the revenue it generates for the company. Without the cost system, it would be difficult for a company to ascertain whether it is making profits or...
Astract Activity-based costing is a modern method of allocating overhead costs to activity cost centers where cost drivers are used as the basis of allocation. This paper focuses on the difference between activity-based costing in large and small firms. The comparison is broken down into several parts such as; sophistication...
Competency 1 of ACCCB/543 comments on the fact of why investors decide to invest in a particular business or why a company chooses to improve its operations. According to the module materials, it is necessary to rely on financial statements and two economic indicators, Net Present Value and Internal Rate...
Introduction Establishing efficient working processes is crucially essential for ensuring the achievement of the desired outputs. The company executives must keep in mind that the management practices performed in the working environment should adhere to the needs of the employees and provide them with an opportunity to develop their professional...
Introduction At the beginning of the 21st century, accounting requires changes and improvements in its standards and principles. The cost of applying standards for financial reporting has long been a concern of the corporate preparers of financial information, a concern that traditionally has been expressed in demands that those who...
When it comes to journal entries in the accounting sphere, there are four adjustments. They have accrued income, accrued expense, deferred income, and deferred expense. Firstly, accrued income denotes that individuals and businesses “make a sale and collect payment at a later date” (Keythman, 2019, para. 2). Secondly, the accrued...
In most cases, companies’ financial statements are subject to mandatory audits, but an inspection cannot guarantee that the reporting data is not falsified. As a rule, investors, potential partners, and external users of reporting primarily pay attention to the three leading indicators of the company’s performance in the reports: revenue,...
Accounting can be described as methodical recording, reporting, and examination of financial transactions of a business or an organization (Duska, 2011). Accounting mechanisms provide investors with appropriate and detailed information aimed at aiding their decision before and after investing in a particular organization. Globalization has resulted in the fraternization of...
The differences and similarities between United States’ Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) have dominated discussions. Most of these discussions focus on the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) with the need to globalize the application of accounting rules. To...
Risk-based there are Requirements of UK versions of ISA 700/705/706 in the auditing of Home Retail Group plc financial statements (The Auditing Practices Board, 2011). The final report on financial statements should have a clear explanation of opinion and must be based on evaluation and conclusion should be drawn from...
There are several factors which show that the company will be in business in the next financial year. The factors show the main successes recorded by the company in the previous years and might contribute to the continued operation of the company (Wright & Noe, 1996). The number of active...
Moma Monaz’s primary source of revenue is the sale of food and beverages to customers. It will constitute nearly the entirety of the restaurant’s earnings, though there may be some minor miscellaneous income. With regard to inventory, the restaurant will maintain a steady supply of non-perishables, particularly alcohol, and source...
According to Home Retail Group plc (2011), the half-year results reflected a six percent drop in sales compared to the previous year. Fall in sales is not a serious problem but when there is a continuous trend, the company’s management should be concerned (Wright & Noe, 1996). According to Home...
The audit approach which will be used in Auditing Home Retail Group plc is risk-based. Some of the risks in this particular case will be accepted after quantifying its risk level. The audit risk will be derived from three main assessments. Inherent risks would be derived from characteristics of Home...
Relevant Facts One of the relevant facts of this essay is that Kathy Ryan is a trade credit officer with Diversified Consolidated Corporation where she is responsible for credits to North Manufacturing of approximately $ one million. Another relevant fact is that North Manufacturing, whose treasurer is Scott Bradley, has...
Relevant Facts One of the relevant facts of this essay is that Chris is a management trainee at Commerce Trust Bank, where he has been working for almost two years and he desires promotion from his traineeship so badly. Secondly, the bank is staffed by inexperienced employees, and the occurrence...
Introduction Auditing standards refer to principles that are set by either a government or an independent body in order to govern the practice of auditing. In the United States, the US Public Company Accounting Oversight Board (PCAOB) is the body that is mandated to set standards for auditing and assurance...
Super Bakery Inc. was founded in 1990 by Franco Harris, a football player. It constitutes the typical example of a virtual corporation, an entity that has outsourced its non-core business functions to other players (Warren, 2011). Having been in the business of supplying baked doughnuts to school systems and public...
Introduction Break even analysis is an important tool in economics and business used for cost accounting. It explains a point where the total revenue and total cost are the same. That is, although there is no profit or loss, the opportunity cost takes care of and is expecting a profit...
Introduction Audit quality refers to a wide range of concepts of interrelated factors including; the ethical standards that apply to all the accounting bodies, legal framework related to audit regulation, the auditors’ independence, the auditing and accounting standards as well as ASIC’s role in the process of audit review. There...
Internal Memo Friedman Jewelers To: Chief Executive Officer From: Independent auditor 27th October 2014 Subject: Understatement of bad debts Facts Upon review of the information that relates to accounts receivable, I have noticed that the write-offs have been surpassing the reserves that have been made at year-end. The documents show...
Financial statement analysis is a powerful tool used by many users to learn about the prevailing circumstance of the firm. It helps investors to make sound investment decisions. This paper seeks to carry out financial statement analysis of Lockheed Martin and General Dynamics to establish the most profitable company where...
The net present value is an evaluation technique that measures the difference between the present value of inflow and outflow. The outflow is the initial cost of the project (Correia, 2012, p. 17). This method is used to calculate the expected returns from investment. Investors make their decisions by looking...
Introduction Every organisation should have a good control system so that to assist in the management of its accounts. This is a proposal that will look into the appropriate control of accounts in regard to outflows, that is, cash disbursements and pay rolls, to control the outflows of cash from...
Introduction The problem of the paper is to define how decision usefulness concept and true and fair view relate each other. Originally, these two concepts symbolize absolutely different approaches in the sphere of accounting management? The fact is that the true and fair view concept is regarded as the heart...
The ethical issue in this situation is an academic dishonesty involving unauthorized collaboration. The unauthorized collaboration in this situation involves receiving a copy of an old examination containing questions of class notes without permission from the professor facilitating the course. The rules and regulations of the course plainly state that...
Nay, an American national of Hungarian origin, once had a chance to settle in Chicago. Due to the economic instabilities in the 1930s, he lost several jobs but finally settled in a brokerage firm. After working two years for Ryan-Nicholas & Company, he became the organization’s president. This earned him...
Advantages of Adoption of International Accounting Standards A good number of countries around the world have already assumed the international accounting standards and others have well-stipulated plans aimed at aiding the concerned countries in adopting these standards. Many advantages are accrued by adopting these standards. For instance, the country’s multinational...
Introduction IFRS (International Financial Reporting Standards) is a set of commands and instructions, developed by IASB (International Accounting Standards Board), to govern and offer guidelines to the accounting profession. Though different countries have their own set of accounting rules and standards, an increasing number are adopting International Financial Reporting Standards...
Introduction Transaction risk in internet banking is a common feature of electronic banking (e banking). Though there is no universal record of all transaction risks that have occurred in banks, it is estimated that, transaction risks increase by the year. For instance, in the years 2009 and 2010, transaction risks...
Introduction US Congress enacted the Sarbanes – Oxley Act of 2002 (SOX) on July 30, 2002, to ensure proper financial reporting and disclosure. The objective of passing this legislation was to rebuild the public trust in corporate business reporting, which was lost due to accounting and other frauds that happened...
Paper Name Executive equity compensation and incentives: A survey Author(s) Core, J.E., W. Guay and D.F. Larcker Source Economic Policy Review, pp 27-50 (2003) Research Question / Objectives Objective is to bring together the literature on equity compensation and executive incentives. In addition, this is to bring down the unsupported...
Introduction The value of auditing rests on two crucial requirements. First, the attestation needs to be competent. It needs to be undertaken by those with appropriate expertise and may involve the necessity of having a competent audit structure, technologies, and processes to undertake the audit. Second, it must be undertaken...
Introduction In contemporary business environments, there is an increased business combination through mergers and acquisitions; the combinations are necessitated by the hard economic environment experienced in the world or as effort to improve business. When a certain company is acquiring another, there is some consideration for the acquisition which must...
Introduction Introduction and Background of the Study Accounting is considered as a very important tool in operation of business in the current society. According to Mourra (2008, p. 82), a business unit cannot run without proper accounting documents in the current society. The need for accounting in organization (both for...
Introduction The history of construction in the United Arab Emirates (UAE) reveals that contractors and design teams put a significant emphasis on the establishment of buildings at the lowest initial capital costs. However, designers, contractors, and policymakers have gradually realised that it is highly unfavourable to determine the project choices...
Aunt Connie’s Cookies can use cost accounting in various ways. Costs are applied to each product based on the extent to which that product causes cost to be incurred. In their production process costs is applied to product using a single predetermined rate based on a single activity measure. Multiple...
Literature Review Companies have started opting for project finance rather than the corporate finance since the past few years. According to Inadomi (2010), project financing is an excellent mean of financing when it comes to avoidance of the record for the project debt on the balance sheet. Furthermore, it is,...
Introduction Although an accounting career can be very stressful, it is still interesting. This means that as much as it might be demanding (to an extent), it can still allow you to enjoy your job and career as an accountant. In this case, just like any other career, there are...
Abstract Convergence to the international accounting standards has been driven by the changes in the ways businesses are formed and the way they carry out their activities. Increased complexities in corporate frameworks, the flow of information, sharing of responsibilities all coupled with undue lust for profits by managers and higher...
Executive Summary This study aims to explore the connection between quality accounting education and high standards of accounting practice in Saudi Arabia. The goal is to find out whether accounting education plays any role in strengthening Saudi Arabia’s economy in line with the country’s Vision 2030. In 2012, Saudi Arabia...
Introduction Background Auditing offers an independent method to assess the effectiveness of a firm’s internal controls. Auditors generally evaluate financial statements and records of a firm and provide their qualified opinions on whether the records and financial information provided by management reflects the true and fair state of affairs of...
Background of the Toyota Motor Company Toyota Motor Company is one of the largest manufacturers of the automobile in the world. The main competitors of Toyota include the Ford Company, General Motors Company and the Honda Motor Company Ltd.he company has its headquarters in Toyota City, Japan (Hino, 2006, 271)....
Introduction Corporate fraud has become more sophisticated than compared to a decade ago and IRS investigation team has the analytical capability of ward through numerous computerized financial records and through complex paper filing. Now, IRS special investigation agents have investigative skills on computer data that facilitate them to recover financial...
The presence of information technology (IT) in accounting arena especially spread out due to the rapid organisational changes across business houses throughout the world. These organisations are rapidly shifting their value chain by incorporating IT. Accounting information system (AIS) is a part of the IT incorporation of the accounting world....
Introduction This memorandum gives guidelines on the accounting for costs that are associated with the production of frames for the Winnebago home. The technique that will be used to estimate the cost of the product is job order costing. Direct materials In this case, Freightliner needs to use job-order costing...
Introduction The analysis of financial documents, such as income statements or balance sheets, allows companies to measure performance. In addition, analysis can be useful in budgeting and strategic planning activities. Certain values represented in financial documents can be used to compare the company’s performance to some of its key competitors’,...
Financial ratios Profitability ratios Gross margin Gross Loss/net sales =(2059)/1362= 1.5117 Operating margin Operating income/ net sales = 306/1362= 0.2247 Profit margin Net profit/net sales = 1923/ 1362 = 1.4119 Return on equity (ROE) Net income/average shareholder equity = 719/39.79 = 18.07 Return on investment Net income /average total assets...
GAAP and IFRS Convergence Generally accepted accounting standards (GAAP) is a set of strict accounting rules that are applied in financial reporting. These standards define specific concepts, making such processes more transparent and stable (“About GAAP,” n.d.). Another set of accounting regulations is the International Financial Reporting Standards (IFRS). These...
Introduction to IAS The International Accounting Standards Board (IASB) is an international accounting standard defining body, which works independently for International Financial Reporting Standards (IFRS). It sets the International Accounting Standards (IAS), which provide a global, standard method of accounting and reporting in many countries. Since 2000 when globalization became...
Introduction Managerial and financial accounting are vital components of modern business but they both contribute to overall operations in different ways. Accounting serves the purpose of determining the operations of a business in regards to future projections, past performances, and current requirements. Managerial accounting has its links in cost management,...
The direct and indirect approach A cash flow statement is important in the organization because it shows the movement of cash. It outlines where a company receives money from and how the money is used. That is cash receipts and payments. The statement is divided into three distinct parts. Each...
Overview International standards are standards which are normally developed by international standards organizations. These standards are usually available to be considered and used worldwide. The most recognized organization for developing international standards is the international organization for standardization (ISO). ISO plays a major role in facilitating international trade and cooperation...
Introduction There are many users of business information who do not work for companies but are associated with them directly or indirectly. These users are considered as external users, and they do not have access to the financial information generated by different departments of a company. Therefore, they have to...
Executive Summary The current operational audit report is prepared to observe deficiencies noted during the audit of Subway restaurant. There are problems with safety, cleanness, food handling, and parking. The recommendations are also presented in the report that could help in bringing changes and improvements in various operations of the...
Introduction Management plays a significant role in the success and running businesses. Therefore, selecting the best approach to management is critical. It is worth noting that businesses operate in dynamic environments. As such, business leaders should incorporate the changes in the environment in the running of businesses to enhance success...
Globalization has massively affected firms in the current market. Firms are increasingly finding themselves operating in regions that are beyond the borders of their home countries. When doing business in countries other than the home country, it is important to determine when to comply with the host country’s tradition and...
