Question;Week 1;Development of Accounting Standards;(graded);Generally Accepted;Accounting Principles (GAAP) are guidelines for companies to follow as they;prepare and issue financial statements. Let?s start by getting an understanding;of why the guidelines were developed in the first place? Who relies on the;financial statements (external users)? What happens if an External User relies;on financial statements that are inaccurate? What negative consequences can;arise from relying on inaccurate financial statements?;This;section lists options that can be used to view responses.;Q2;Accounting Conceptual Framework;(graded);A sound foundation is;necessary for success in any task from building a house to putting on make-up.;In terms of U.S. Accounting Standards, it is also necessary to have a sound;foundation, referred to as the conceptual framework. Let?s discuss it step by step;starting with the objective. What is the objective of accounting standards?;This;section lists options that can be used to view responses.;Week 2;Balance Sheet: Purpose and Uses;(graded);The;balance sheet is one of the first financial statements I turn to when reviewing;a company. You can learn a lot about a company by looking at its balance;sheet. The balance sheet is also called the statement of financial position.;Why is this? What is the purpose of the balance sheet?;Q2;Disclosure Notes (graded);Disclosures are required;to elaborate on certain items that are presented in summarized form in the;financial statements. There are specific disclosure notes that are required to;be present in all financial statements, while others may be unique to the;disclosure needs of a particular company.;Let's start by discussing the three required disclosures. Please pick one and;explain what information is to be included in the note;Summary of Significant Accounting PoliciesSubsequent EventsThird Party Transactions;Wee 3;Income Statement (graded);Students often refer to anincomestatement as the statement that shows;how much money a company has made. Money, by definition, is something that is;generally accepted as a medium of exchange or means or payment. Keeping that;definition in mind, anincome;statement is not a measure of money, but rather it is a measure ofnetincome;(or loss) also known asprofit;(or loss). Select a publicly held company like Apple, Microsoft, IBM, Hewlett;Packard, Home Depot (Note:do not;select a company already chosen by your classmate). Go to their website and;select Investor Relations and there you will find the company?s annual report.;Provide the link to that annual report and based on what you have read aboutincomestatements in this chapter and in the;Becker materials, tell us what you have learned about the company from;reviewing itsincomestatement.;This section lists options that can be used;to view responses.;Q2;Cash-Flow Statement (graded);The Statement of Cash;Flows has historically given students a lot of heartburn, but it really isn't;that scary. A cash-flow statement, simply stated, reports the uses (where the;cash was spent) and the sources (where the cash came from) of cash during a period.;Let's start with a very simplistic set of facts. I run a CPA firm, and I billed;my clients $50K during the month of February. To earn that $50K, I incurred;$20K of wage expense and another $10K of overhead (rent, utilities, insurance;etc.).So I made $20K profit;right? So I am sitting pretty? Not necessarily. What if I now tell you that;$40K of my billings have yet to be collected? And my E&O insurance carrier;increased my premium and I had to pre-pay $10K of premiums this month. How does;my cash flow differ from my profit? Will these transactions appear on my income;statement? My cash-flow statement?;Week 4;Revenue Recognition (graded);When a company sells a;product for cash, it generally recognizes the revenue. However, there are;situations when it is not always clear when a company should recognize the;revenue. How do you handle a car dealership that sells a warranty contract to;its customers for $650 that will cover the next 5 years?;This section lists options that can be used;to view responses.;Q2;Time Value of Money Concepts;(graded);You might think of the;time value of money" to be a topic for Finance class, but;accountants need an understanding of this topic as well. Let's discuss;where/why an accountant may need to use these skills/calculations.;Week 5;Cash (graded);Cash is listed first on;the balance sheet because it is the asset most readily available to pay off;debt or use in operations. Cash is also one of the assets that most often;grows legs" and walks away. Therefore, it is important that any;business protect its cash, it does so through Internal Control Procedures.;Please start by defining Internal Control, then discuss specific procedures;related to cash.;Q2;Receivables (graded);When a business extends;credit to its customers, we call this Accounts Receivable. Often a business;will grant its customers a discount. What are the two types of discounts, and;how does the journal entry to record the sale change when there is a discount granted?;Week 6;Inventory Classification and;Systems (graded);Merchandise Inventory is;assets held for sale in the ordinary course of business of wholesale and retail;companies. Manufacturing inventories are raw materials or WIP that will be used;or consumed in the production of finished goods to be sold. Review the Annual;Report that you chose for the Week 3 Discussion topic #1and based on what you've read in the;text and in the Becker materials, explain how inventory is presented on the;balance sheet and what further information you found in the footnote disclosures;about the inventory method and "Impairment of Inventory", if any.;Q2;nventoriable Costs/Cost-Flow;Assumptions (graded);We read about the;Perpetual and the Periodic Inventory System. Regardless of which system is;used, under both, we need to assign dollar amounts to the Ending Inventory and;Cost of Goods Sold so that we can trace how costs flow through the system.;Start by identifying what is included in inventory and then discuss how each;item might be treated differently in the Perpetual vs. the Periodic Inventory;System.;Week 7;Inventories?LCM (graded);The;lower-of-cost-or-market (LCM) approach was developed to avoid reporting;inventoryatan amount greater than the benefits it;can provide. The LCM approach records losses in the period the value of the;inventory drops below its cost instead of later in the period that the goods;are ultimately sold. Is this a conservative or an aggressive approach? What;does GAAP say about LCM?;Q2;Inventory Errors (graded);It is discovered in 2013 that ending inventory;from 2011 is understated. What accounts will be affected by this;understatement, and how will they be affected? This is a situation that really;happens. Start with the 2011 inventory being understated, and track the changes;through the inventory account to 2013.
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