ACC205: Principles of Accounting

Week 1

Discussions
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  1. Accounting Equation

    As you have learned in this week s readings the Accounting Equation is Assets = Liabilities + Owners Equity. Is the accounting equation true in all instances Provide sample transactions from your own experiences to demonstrate the validity of the Accounting Equation.

    Guided Response:
    Review several of your peers posts and identify some core components that you feel should be included in every transaction. Respond to at least two of your peers and provide recommendations to extend their thinking. Challenge your peers by asking a question that may cause them to reevaluate or add components to their transactions.

  2. Accounts

    What does the term account mean What are the different classifications of accounts How do the rules for debits and credits impact accounts Please provide an example of how debits and credits impact accounts.

    Guided Response:
    Analyze several of your peers posts. Let at least two of your peers know if this knowledge could be used in their everyday lives. Is so, how If not, why not?


Exercise Assignment
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Basic Accounting Equations

Please complete each of the exercises below in a word document. Save the document, and submit to in week using the Assignment Submission button.

Discussions
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  1. Accounting Cycle

    Financial statements are a product of the accounting cycle. Think about two different companies: a manufacturing company, and a retail company. Why would different companies have different accounting cycles Would you expect the steps of the accounting cycle to be the same for each company Why or why not?

    Guided Response:
    Review several of your peers posts and identify what steps of the accounting cycle that you feel are the most critical. Respond to at least two of your peers and provide recommendations to extend their thinking. Challenge your peers by asking a question that may cause them to reevaluate their position on the accounting cycle.

  2. Bank Reconciliation

    What is the purpose of a bank reconciliation What are the reasons for differences between the cash reported in the accounting records and the cash balance in the bank statements?

    Analyze several of your peers posts. Let at least two of your peers know what happens to the discrepancies between the book balance and the bank balance. Could these differences just be written off?

    Guided Response:
    A bank reconciliation reconciles the bank account balance per the books to the actual bank balance. Outstanding checks, deposits in transit, and bank errors are reasons there are differences between the cash reported in the accounting records and the cash balance in the bank statements.


Exercise Assignment
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Revenue and Expenses

Please complete each of the exercises below in a word document. Save the document, and submit to in week using the Assignment Submission button.

Week 3

Discussions
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  1. LIFO vs. FIFO

    The controller of Sagehen Enterprises believes that the company should switch from the LIFO method to the FIFO method. The controller s bonus is based on the next income. It is the controller s belief that the switch in inventory methods would increase the net income of the company. What are the differences between the LIFO and FIFO methods

    Guided Response:
    Analyze several of your peers posts. Let at least two of your peers know if a company is better off it switches from a LIFO method to a FIFO method Explain your reasoning.

  2. Depreciation

    A variety of depreciation methods are used to allocate the cost of an asset to all of the accounting periods benefited by the use of the asset. Your client has just purchased a piece of equipment for $100,000. Explain the concept of depreciation. Which of the following depreciation methods would you recommend: straight-line depreciation, double declining balance method, or an alternative method?

    Guided Response:
    Let at least two of your peers know if a company would use an accelerated depreciation method for their financial statements or their tax returns. Why do you believe this would be the case?


Exercise Assignment
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Inventory

Please complete each of the exercises below in a word document. Save the document, and submit to in week using the Assignment Submission button.

Ashford 5: – Week 4

Discussions
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  1. Current Liability

    What is a current liability From the perspective of a user of financial statements, why do you believe current liabilities are separated from long-term liabilities Based on your current experience as well as and any additional research you may have done provide two examples of situations where businesses collect monies from customers and employees and report these amounts as a current liability.

    Guided Response:
    Review several of your peers posts and identify the core components of a current liability. Respond to at least two of your peers and provide recommendations to extend their thinking. Challenge your peers by asking a question that may cause them to reevaluate if their example is a current liability.

  2. Client Recommendations

    A client comes to you thinking about starting a consulting business. Your client is specifically interested in what type of entity should be created for this new business. Based on your readings or any additional research you may have done, discuss the advantages and disadvantages of the following: sole proprietorship, partnership, and corporation. Based on these advantages and disadvantages provide a clear recommendation to your client.

    Let at least two of your peers posts know if an alternative choice of entity would be possible. What would be the benefits of this new entity choice Would there be any disadvantages associated with this new entity selection.

    Guided Response:
    Let at least two of your peers know if an alternative choice of entity would be possible What would be the benefits of this new entity choice Would there be any disadvantages associated with this new entity selection?


Exercise Assignment
To complete the following assignment, go to this week’s Assignment link in the left navigation.

Liability

Please complete each of the exercises below in a word document. Save the document, and submit to in week using the Assignment Submission button.

Ashford 6: – Week 5

Discussions
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  1. Ratios

    Ratios provide the users of financial statements with a great deal of information about the entity. Do ratios tell the whole story How could liquidity ratios be used by investors to determine whether or not to invest in a company

    Guided Response:
    Let at least two of your peers know how debt service ratios can be used by a lender in determining whether or not to lend money to a company.

  2. Profit Margin

Year Ending December 2012

Year Ending December 2011

Year Ending December 2010

Revenues

40,000

35,000

33,000

Operating Expenses

Salaries

15,000

10,000

9,000

Maintenance and Repairs

6,000

9,000

10,000

Rental Expense

2,500

2,500

2,500

Depreciation

2,000

2,000

2,000

Fuel

4,000

3,500

2,500

Total Operating Expenses

29,500

27,000

26,000

Operating Income

10,500

8,000

7,000

Sales and Administrative Expenses

6,000

4,000

3,000

Interest Expense

2,500

2,000

1,000

Net Income

2,000

2,000

3,000

Above is a comparative income statement for Cecil, Inc. for the years 2010, 2011, and 2012. Calculate the profit margin for each of these years. Comment on the profit margin trend.

Guided Response:
Let at least two of your peers posts know what you changes you would recommend to improve the net margin of the company.


Exercise Assignment
To complete the following assignment, go to this week’s Assignment link in the left navigation.

Financial Ratios

Please complete each of the exercises below in a word document. Save the document, and submit to in week using the Assignment Submission button.

Week Five Exercise Assignment

Carefully review the Grading Rubric for the criteria that will be used to evaluate your assignment.


Final Paper
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Final Paper

Focus of the Final Paper

Write a five-to seven-page financial statement analysis of a public company, and formatted according to APA style as outlined in the Ashford Writing Center. In this analysis you will discuss the financial health of this company with the ultimate goal of making a recommendation to other investors. Your paper should consist of the following sections: introduction, company overview, horizontal analysis, ratio analysis, final recommendation, and conclusions. Your paper needs to include a minimum of two scholarly resources in addition to the textbook as references.

Here is a breakdown of the sections within the body of the assignment:

Company Overview
Provide a brief overview of your company (one to two paragraphs at most). What industry is it in What are its main products or services Who are its competitors?

Horizontal Analysis of Income Statement and Balance Sheet
Prepare a three-year horizontal analysis of the income statement and balance sheet of your selected company. Discuss the importance and meaning of horizontal analysis. Discuss both the positive and negative trends presented in your company.

Ratio Analysis
Calculate the current ratio, quick ratio, cash to current liabilities ratio, over a two-year period. Discuss and interpret the ratios that you calculated. Discuss potential liquidity issues based on your calculations of the current and quick ratios. Are there any factors that could be erroneously influencing the results of the ratios Discuss liquidity issues of competitive companies within the same industry.

Recommendation
Based on your analysis would you recommend an individual invest in this company What strengths do you see What risks do you see It is perfectly acceptable to state that you would recommend avoiding this company as long as you provide support for your position.

Writing the Final Paper

1. Must be five to seven double-spaced pages in length, and formatted according to APA style as outlined in the Ashford Writing Center.
2. Must include a title page with the following:

a. Title of paper
b. Student s name
c. Course name and number
d. Instructor s name
e. Date submitted

3. Must begin with an introductory paragraph that has a succinct thesis statement.
4. Must address the topic of the paper with critical thought.
5. Must end with a conclusion that reaffirms your thesis.
6. Must document all sources in APA style, as outlined in the Ashford Writing Center.
7. Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center.