Why Would Different Companies Have Different Accounting Cycles?
Why would different companies have different accounting cycles?
Different companies are going to have different accounting cycles because even though there are some similarities, there also some differences in activities that each company performs. A manufacturing company purchases raw material in order to manufacture their supply inventory and then sells it to a retail company. A retail company purchase supply inventory from the manufacturing company and then sells it. For example, Apple Inc. is a company that manufactures electronic inventory items and then sells it to a retail store, such as Best Buy.
Would you expect the steps of the accounting cycle to be the same for each company? Why, or why not?
The steps of the accounting cycle will be similar, but not
…show more content…
The purpose of bank reconciliation is to compare the balance on the bank statement with the accounting records. Bank reconciliation is the “process needed to identify errors, irregularities, and adjustments needed to the Cash account.” (K Wainwright, S. 2012).
What are the reasons for differences between the cash reported in the accounting records, and the cash balance in the bank statements?
Some of the reasons for differences between the cash reported in the accounting records and the cash balance in the bank statement are:
1. “Deposits in transit are receipts entered on company records but not pro¬cessed by the bank, and (2) outstanding checks are written checks that have not cleared the bank.”(K Wainwright, S. 2012). These are transactions that reflect on the accounting records but not on the bank statement.
2. “NSF (nonsufficient funds) checks are checks previously deposited but have been returned for nonpayment, (2) bank service charges and fees, (3) inter¬est earnings on the bank account(s), and (4) cash collections of notes and drafts.” (K Wainwright, S. 2012). These items might reflect on the bank statement, but not in the accounting
Eagle Outfitters Financial Ratios Paper
705 Words | 3 PagesIn the B-Form 10-K American Eagle Outfitters’ provided, it displayed two years of complete balance sheets. A balance sheet will display the basic accounting equation, which are assets equals’ liabilities plus stockholders’ equity. Economic resources that a company or corporation owns are known as assets. Liabilities are essentially moneys that a company or corporation owe. Stockholders’ equity can be classified as the amount of funds provided by business owners and the earnings that become reinvested into the company (Bethel,
Johnson And Sawyer Case Summary
447 Words | 2 Pagesthe bank has the right to clear the check to whoever he is the holder of the instrument at that time. The bank was still acting in good faith when they cleared the check because it can charge the indicated account according to the original terms of the altered item. Johnson wrote and signed the check, but didn’t specify that it was made out to Brown. Although, an alternation occurred when the check was change made to “cash” the bank is not liable to re-credit the account because it was acting in good faith when the check was
American Eagle Outfitters Income Statement
515 Words | 3 PagesThe net income amount that is shown on three statements show $80,322 in the thousands. The three statements are operation statement, income statement, and the cash flow statement. Per all three statements the net income has decreased in the thousands over the last three fiscal years (Bethel University,
American Eagle Outfitters Income Statement Analysis
499 Words | 2 PagesFor many years, does it present complete balance sheets, income statements, and cash flow statements? Balance Sheets: The balance sheet for American Eagle is recorded data that completes one fiscal year. This fiscal year runs from February 1, 2014 and runs through January 31, 2015. They will close out each fiscal year on the Saturday closest to January 31 (Bethel University, 2017).
Hcs/531 Week 4 Health Care Paper
1417 Words | 6 PagesWhen being placed in the role of a manager, it is important to understand the finances of the organization and how to read and understand the recording of finances. It is also important to understand how all the different parts of the records fit together to give us the knowledge of where the business is financially. Knowing also the different responsibility centers related to financial recording and how they function is important as a manager. Once a manager understands what and where items belong on a balance sheet, they will better understand the state that the business is in. “It provides you with a picture of the financial health of your practice or organization on a certain date.”
Canadian Cancer Society Marketing Strategy
973 Words | 4 PagesThe product in this marketing plan is the service provided by Canadian Cancer Society which is information dissemination and a call to action to all teenage smokers and those who are vulnerable to developing smoking as a habit. The awareness and call to action is the product or service that Canadian Cancer Society is promoting through this immersive media marketing campaign. 12.2 Price There is no financial cost associated with this service that Canadian Cancer Society is providing but the target market will have to utilize resources like time and the effort to create the ads, and to share them with friends and family. They will however have to spend money and give time to come to the ‘Hangout at Victoria’ and the ‘Be Kissable Again’ event.
Key Elements Of The Uniform Commercial Code (UCC)
391 Words | 2 PagesDate – when the check was written (top right) 2. Words of Negotiability – payee’s name or the word “cash” (This appears on “pay to the order of” line) 3. Numerical Amount – amount of the check in
Acc 201 Final Project Part 1 Accounting Cycle
1187 Words | 5 PagesACC 201 Final Project Part I Accounting Cycle Report Vanessa Ann Williams Southern New Hampshire University The accountant cycle has really impacted me to gain insight on the financial side of Peyton Company. In the accountant cycle, there are many particular directions involve determining the growth of the company such as steps, role, omission and financial statements. It’s important to apply every step from the accountant cycle to make a financial critical decision in the long run. This report will have a breakdown of how to apply the accountant cycle for Peyton Company to be aware of future financial decisions to keep the company holding strong.
The Pros And Cons Of Inventory Accounting Methods
979 Words | 4 PagesThe choice of inventory accounting methods, specifically for the case of FIFO and LIFO, has developed into a decision, which includes varying consequences and comes with specific implications and benefits, such as communicating private information with FIFO (Hughes, and Schwartz, 1988, p.42) or tax benefits for the choice of LIFO (Morse and Richardson, 1983, p.125). Every firm and manager has to face the decision of which accounting method to choose, and has to include several aspects into their decision making process and weigh the pros and cons in general. However, the empirical evidence (Frankel and Hsu, 2015, p.48) shows some controversies as to what inventory accounting methods firms decided to use in the past, even though the theory would
Home Depot Financial Analysis
365 Words | 2 PagesEdmonds, T. P., Tsay, B., & Olds, P. R. (2011). Fundamental managerial accounting concepts (6th ed.). New York, NY: McGraw-Hill
Essay On Pro Forma
552 Words | 3 PagesIn 2002, the SEC adopted new rules and amendments to address public companies’ disclosure or release of certain financial information that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles. The accrual accounting is more popular and be widely used in business world because it produces more accurate and faithful financial statements that constitute better representation of actual circumstances than its main competitors. The major weakness of accrual accounting is that there is some time issue such like the time of occurred and time of recorded would probably be different and it increases the risk of financial information and the risk of correctness. Also, the accrual accounting generally cost more to operate compared with cash accounting
Inventory Valuation Analysis
1594 Words | 7 Pages Historical inventory “cost” is used in applying the lower of cost or net realizable value over the entire period that the inventory is held. Write-downs are reversed as selling prices rise. Over the entire period of an enterprise, the amount of expense and profit are the same in the income statement on US GAAP and IFRS. However, the inventory and cost of goods sold balances can vary dramatically in any given period.
Tesco Accounting Report
1656 Words | 7 PagesAlso many companies reporting related to the state of the value added or environmental information, these are concentrated in industrial sectors. The financial statements reflect the financial position of company, financial performance and cash flows of the company, it is significant to note that the correct depiction of the impacts of transactions and other events and circumstances according to the explanations and criteria identification of assets, liabilities, income and expenses go in the same outline (Brealey,
The Importance Of Accounting In Personal Finance
748 Words | 3 PagesHowever, in personal finance, cash accounting is often used to define and account for events when the cash changes hands. This practically implies that in personal finance, incomes and expenses are noted when the cash is received or paid, or when the cash actually flows. In managing personal finance, the accounting process in crucial in that it records personal transactions of what flows in and what flows out. As checkbooks records most transactions with statement from bank carrying others, this accounting transaction information is summarized in financial statement and can easily be read most efficiently. Furthermore, the summary report of the income statement, cash flow statement, and balance sheet clearly show one’s personal financial status paving the way for better managing personal finance.
Importance Of Accounting Information System
925 Words | 4 PagesThe main important purpose of the accounting information system is to promote the activity of the enterprise and to form a reliable and real picture of it. In addition, the accounting information system promotes the activity of the enterprise effectively by preparing up-to-date information statements, providing as much information as possible so that the data should be understandable all users not only for the experts(bookkeepers) and tracking liquidity. Nowadays accounting software is a programme which makes accounting work processes easier and faster and which makes it possible to meet the information demand of the management. It also can support the accountants’ work, helping to compile reports by in helping to compile reports by recording and processing the events concerning the
More about Why Would Different Companies Have Different Accounting Cycles?
Eagle Outfitters Financial Ratios Paper
705 Words | 3 PagesJohnson And Sawyer Case Summary
447 Words | 2 PagesAmerican Eagle Outfitters Income Statement
515 Words | 3 PagesAmerican Eagle Outfitters Income Statement Analysis
499 Words | 2 PagesHcs/531 Week 4 Health Care Paper
1417 Words | 6 PagesCanadian Cancer Society Marketing Strategy
973 Words | 4 PagesKey Elements Of The Uniform Commercial Code (UCC)
391 Words | 2 PagesAcc 201 Final Project Part 1 Accounting Cycle
1187 Words | 5 PagesThe Pros And Cons Of Inventory Accounting Methods
979 Words | 4 PagesHome Depot Financial Analysis
365 Words | 2 PagesEssay On Pro Forma
552 Words | 3 PagesInventory Valuation Analysis
1594 Words | 7 PagesTesco Accounting Report
1656 Words | 7 PagesThe Importance Of Accounting In Personal Finance
748 Words | 3 PagesImportance Of Accounting Information System
925 Words | 4 Pages