Writers Den

Purpose of Assignment

This
week’s activity illustrates the role a company’s accounting method plays in
financial statement reporting. In this assignment, students evaluate the events
occuring in a business setting and determine how to properly analyze those
events to identify the impact on both cash and accrual accounting methods.

Assignment
Steps

Resources:Generally
Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Commission
(SEC)

Tutorial help on Excel^® and Word functions can be
found on the Microsoft^® Office website. There are also
additional tutorials via the web offering support for Office products.

Scenario:BizCon, a
consulting firm, has just completed its first year of operations. The company’s
sales growth was explosive. To encourage clients to hire its services, BizCon
offered 180-day financing – meaning its largest customers do not pay for nearly
6 months. Because BizCon is a new company, its equipment suppliers insist on
being paid cash on delivery. Also, it had to pay up front for 2 years of
insurance. At the end of the year, BizCon owed employees for one full month of
salaries, but due to a cash shortfall, it promised to pay them the first week
of next year.

As the senior accountant, the Chief Financial Officer has asked
you to prepare a memo to be sent to management notifying them of the delayed
wage payments.

Prepare the memo
in a maximum 700 words including the following information to better outline
the situation:

·
Explain how cash and accrual
accounting differs for each of the events listed in the above scenario and
describe the proper accrual accounting.

·
Assess how at the end of the
year, BizCon reported a favorable net income, yet the company’s management is
concerned because the company is very short of cash. Explain to management how
BizCon could have positive net income and yet run out of cash.

Formatyour
assignment consistent with APA guidelines.

Content	Met	Partially Met	Not Met	Comments:
Explained how cash and accrual accounting differs for each of the events listed in the scenario and describe the proper accrual accounting.
Assessed how at the end of the year, BizCon reported a favorable net income, yet the company’s management is concerned because the company is very short of cash. Explained to management how BizCon could have positive net income and yet run out of cash.
The memo is a maximum 700words in length.
		Total Available	Total Earned
		4	#/4

Writing Guidelines	Met	Partially Met	Not Met	Comments:
The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a reference page.
Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed including spelling and punctuation.
		Total Available	Total Earned
		2	#/2

Assignment Total	#	6	#/6
Additional comments: