Discussion board Accounting

Small Business Analysis

 

Don't use plagiarized sources. Get Your Custom Essay on
Discussion board Accounting
Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT!
Order Essay

Purpose: To help you understand the importance of cash flows in the operation of a small business. It’s the end of the month, and cash flow has been a little slow, as it usually is during this time of the accounting period. It just seems to be a little slower this month. You know that Wednesday the 31st is payday, which always requires a large cash outlay. However, you also know that your bank is looking for a set of financial statements as of the end of the month because the loan on your building is coming up for renewal soon. Based on some of the previous meetings with your bankers, they are always concerned with the cash balance, so you want to have your cash balance as high as possible. You come up with a tentative plan you believe will not only preserve some of your cash balance at the end of the month but also will help your bottom line, your net income. That’s the other thing that the bankers are always concerned about. You don’t want to make any mistakes with your financial statements at this crucial point, so you decide to contact your CPA to run the idea by her. The conversation goes something like this:

 

“Good morning, Sherry. This is Bill Conan from Conan Consultants, Inc. Our financial statements have to look really good this month because the bank is going to be scrutinizing them pretty closely for our pending loan renewal. I know that the two things they concentrate on are the cash balance and the net income. So, I’ve got a plan to help in both of those areas. I’m going to hold off paying my employees until after the first of the month. Plus, last month, I made a big insurance payment to cover me for the next six months, so I won’t need to show any insurance expense this month. Both of those will help my net income because I won’t be showing those expenses on my income statement. Plus, by not writing the paychecks until the first of the month, I’ll be helping to show a higher cash balance. It’s really only one day, but the bank won’t know that my cash balance should be lower. These certainly sound like some good ideas that would help with my situation, but just in case, I wanted to check with you to see what you thought. Any comments?” The first words out of the CPA’s mouth are “Bill, you know that your financial statements are prepared using the accrual basis of accounting.”

 

 

Requirement 1. Complete the thought process of the CPA concerning Bill’s plan. What does she mean by the accrual basis of accounting? What effect will that have on the net income? Is Bill correct in his assessment of the big insurance payment he made last month covering the next six months? What effect will that have on the net income? And in regard to the last item, what about Bill’s plan to keep the cash balance as high as possible and his statement “the bank won’t know that my cash balance should be lower”?

 

Excerpt From:

Kemp, Robert, Jeffrey Waybright. Financial Accounting, 4th Edition. Pearson, 2017. [p. 156-157].

 

[Remember to include at least one scholarly source in your post or comments. Source must be cited in-text and full reference listed at the end of the post, both in APA format]

Homework Market
Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Since all our papers are written from scratch, the papers we submit are plagiarism free and we strictly adhere to lecturer’s instructions. Our writers are highly qualified from all over the world and include graduates and professors from most of the largest and known universities in the world. Once you have assigned us your assignment, we select the most qualified and reliable writer to handle your assignment.

Money-back guarantee

Unlike other writing companies, we encourage clients to draw back their money at any stage of the writing process if they experience any uncertainties with the quality of generated content. However, you will hardly have to make this decision because of our business approach that suits your needs.

Zero-plagiarism guarantee

We have an advanced plagiarism-detection system that flags any work that fails to meet the required academic expectations. Our company thrives in honesty, and as such, you will be guaranteed to achieve a paper that meets your expectations.

Timely delivery of urgent papers

At homeworkpaper.org we have online agents that you can chat with to have your assignment taken care of with the little remaining time. Also, we have professional academic writers who will work on your assignment providing you with a high-quality paper at the same time. We can take care of your urgent assignments in less than 5 hours.

Privacy policy

We uphold confidentiality and privacy through our interactions with clients, an aspect that has enhanced our relationship with prospective customers seeking for assignment help. We do not disclose your information with third-parties; neither do we share your work with any other person apart from you.

We do not offer pre-written essays

We do not resell previously-done tasks delivered to other clients. When we deliver orders to our clients, we safeguard their privacy and confidentiality by ensuring the third party does not access the work. By writing the papers from scratch, we have managed to maintain a certain level of originality, which defines our business model. Our qualified editors proofread all submitted work to eliminate mistakes that can interfere with the credibility of the assignment.

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency