Acc 201 Final Project Part 1 Accounting Cycle

In order to fully understand the accounting cycle and complete all eight steps, an accountant must understand the adjusting and closing process and be able to prepare trial balances. The unadjusted, adjusted, and post-closing trial balances are all prepared during the eight step accounting cycle. In order to maintain the most accurate financial statements, accrual accounting should be used. Accrual accounting is an “accounting method that records revenues when earned and expenses when incurred without regard to when cash is exchanged” (Kemp & Waybright, 2013, p. 126). In order to master the eight step process of the accounting cycle, an accountant should use accrual accounting, understand the adjusting and closing process, and be able to

I decided to do my research on Sony due to the advancement in technology and the competition between companies such as Microsoft, Apple, and Sony. I have been around long enough to know about Sony’s products but the real reason that attracted me to them for this essay is because I actually believe that they are having a negative trend. I am starting to see less Sony items in stores and I haven’t really heard much about them. Whereas companies such as Apple are constantly being talked about and you often see people walking around with some type of apple product in their hands. Today we are going to research Sony through a horizontal analysis and through different ratio analyses. Let’s see what we find!

As a creditor or lender it is of utmost importance that they have all the information necessary to make a sound decision as to whether or not they will lend money to a company. The retained earnings statement, balance sheet, and statement of cash flows will paint that picture for a creditor due to the fact that they will see where the company’s money is being earned and spent through the statement of cash flows, they will see how they are either paying out dividends to investors or reinvesting the money into the business through the retained earning statements, and how solvent the business is by looking at the balance sheet.

According to Financial and Managerial Accounting, the accounting cycle is the approach companies use to create their financial statements

When you’re looking at the income statement, you can get information about profitability for a particular period. This is also called the profit and loss statement. The income statement is composed of both income and expenses. This statement can be used to deduct expenses from income and report either a net profit or net loss for that period. This statement will deduct all expenses from income and then report your net profit or net loss for that period. This will allow the business owner to determine if the business is bringing in a good amount of revenue to make a profit. The cash flow statement shows the movement in cash and balance over period. The cash flow can vary depending on the operating activities, investing and financing activities. This statement provides one business owner with insight to the company’s liquidity which is vital to the growth of the business. Reinvesting in business is very important, looking at the statement of retained earnings will tell a business owner how much were reinvested in the company. After profitable period, every big business has to give some of its profits to stockholders, and keep the rest amount as retained earnings. Out of all statements, retaining statement is important to companies that sells stocks to the public. This statement can also provide you with assets and liabilities information. These informations can be used to assess the financial health of your business. The results of a balance sheet will help the business owners to show the risk of liquidity and credit. Looking at these information you can measure trends and relationships to show where in the areas you can improve. These can also be compared to similar companies to show how the business measures up to leading competitors (Ali, 2010). In summary, the financial statements can provide a business owner

An adjusting journal entry or an adjusting entry, involves an income statement account (revenue or expense) along with a balance sheet account (asset or liability) and typically relates to the accounts for accrued expenses, accrued revenue, prepaid expenses and unearned revenue. (Investopedia.com, n.d.) When accounts are not updated to show the correct transactions or a mistake has been made, adjusting entry will provide insight in order to ensure all entries are appropriately recorded. This action will then reflect the accurate amounts of expenses and revenues. Once this is done, a business may close accounts for the ending period.

You may omit explanations of the transactions. Skip a line between eah set of journal entries.

| Part I:  Write a 1,400- to 1,750-word paper explaining the following:          Revenue recognition principle          Expense recognition principle Describe the four situations that require adjusting journal entries and provide one example for each:          Prepaid expenses          Unearned revenues          Accrued expenses          Accrued revenues Format the paper consistent with APA guidelines. Part II Complete problem set P4-2A Page 209 in Ch. 4 of Financial Accounting.

The purpose and goal behind researching the income statements and balance sheets then calculating the ratios is mainly to help creditors and investors make their decisions easier and faster. The way we are presenting our research results helps the investors and creditors make the decision which of the companies is more worthy to invest in or loan money too without taking a risk, and lowering the chances that they will be disappointed by the results of their investment, or in the creditors case they can be almost certain the company they are loaning the money to would be worthy enough of paying the money back without a hassle.

Users are likely interested in information that will assess the company's liquidity, solvency, risk and return, etc. Therefore, they can know more about how is the company financed and the availability of cash to pay debt from the balance sheet. They can know exactly about allocation of the use of cash for different activities from the statement of cash flows. Income statement will provide the information about the revenues and expenses of the company. They can also access information associated with dividend paid and retained earnings.

The four primary financial statements found in annual reports include the income statement, balance sheet, statement of retained earnings and statement of cash flows. The data in each statement includes results from the most recent fiscal year-end, as well as historic data that stakeholders use in identifying trends from year to year. The financial statements include data required for stakeholders to calculate a variety of ratios and analysis which are critical in determining corporate levels of efficiency, profitability, liquidity, debt and sustainability. Since financial statements of public corporations are audited by independent firms, the financial data is typically accurate and generally reflects a standardized format following Generally Accepted Accounting Principles

Accounting transactions are professional occasion that has either a positive or negative budgetary impact on the financial statements. One impact of transactions in a financial statement will increase or decrease the accounts contingent on the transaction that has taken place. The history of revenue that has come or gone from the business will be shown on both financial statements and accounting transactions. Many businesses make several transactions daily. Errors can have a negative impact on financial statements, because the facts come from the accounting transactions

The result of accrual accounting is an income statement that better measures the profitability of a company during a specific time period.

with a new partner, Harry Fowl. Harry has had some existing business and you are