Brockton carpet cleaning prepares a bank reconciliation

ACCT 304 Intermediate Accounting I Complete Course & Final Exam Devry

Generally Accepted Accounting Principles (GAAP) are guidelines for companies to follow as they prepare and issue financial statements. Let’s start by getting an understanding of why the guidelines were developed in the first place? Who relies on the financial statements (external users)? What happens if an External User relies on financial statements that are inaccurate? What negative consequences can arise from relying on inaccurate financial statements?

ACCT 304 Week 1 DQ 2 Accounting Conceptual Framework :

A sound foundation is necessary for success in any task from building a house to putting on make-up. In terms of U.S. Accounting Standards, it is also necessary to have a sound foundation, referred to as the conceptual framework. Let’s discuss it step by step starting with the objective. What is the objective of accounting standards?

ACCT 304 Week 1 Homework Assignments:

Chapter 1: E 1-7 , Research Case 1-4

Chapter 2: E 2-4, E 2-8, E 2-12

ACCT 304 Week 1 Quiz includes:

(TCO 1) Which of the following was the first private sector entity that set accounting standards in the United States?

(TCO 2) The enhancing qualitative characteristic of understandability means that information should be understood by

(TCO 3) XYZ Corporation receives $100,000 from investors for issuing them shares of its stock. XYZ’s journal entry to record this transaction would include a

(TCO 3) Cal Farms reported a supplies expense of $2,000,000 this year. The supplies account decreased by $200,000 during the year to an ending balance of $400,000. What was the cost of supplies Cal Farms purchased during the year?

(TCO 3) Temporary accounts would not include

Week 2

ACCT 304 Week 2 DQ 1 Balance Sheet- Purpose and Uses :

The balance sheet is one of the first financial statements I turn to when reviewing a company. You can learn a lot about a company by looking at its balance sheet. The balance sheet is also called the statement of financial position. Why is this? What is the purpose of the balance sheet?

ACCT 304 Week 2 DQ 2 Disclosure Notes :

Disclosures are required to elaborate on certain items that are presented in summarized form in the financial statements. There are specific disclosure notes that are required to be present in all financial statements, while others may be unique to the disclosure needs of a particular company.

Let’s start by discussing the three required disclosures. Please pick one and explain what information is to be included in the note:

Summary of Significant Accounting Policies

Subsequent Events

Third Party Transactions

ACCT 304 Week 2 Homework Assignments:

Exercise 3-2, 3-3, 3-4

ACCT 304 Week 2 Quiz :

(TCO 4) Current assets include cash and all other assets expected to become cash or be consumed

(TCO 4) Rent collected in advance is

(TCO 4) Janson Corporation Co.’s trial balance included the following account balances at December 31, 2011:

What amount should be included in the current liability section of Janson’s December 31, 2011 balance sheet?

(TCO 4) Which of the following would be disclosed in the summary of significant accounting policies disclosure note?

(TCO 4) Below is the partial balance sheet ($ in thousands) for Paisano Seafood Inc.

Week 3

ACCT 304 Week 3 DQ 1 Income Statement:

Students often refer to an income statement as the statement that shows how much money a company has made. Money, by definition, is something that is generally accepted as a medium of exchange or means or payment. Keeping that definition in mind, an income statement is not a measure of money, but rather it is a measure of net income (or loss) also known as profit (or loss). Select a publicly held company like Apple, Microsoft, IBM, Hewlett Packard, Home Depot (Note: do not select a company already chosen by your classmate). Go to their website and select Investor Relations and there you will find the company’s annual report. Provide the link to that annual report and based on what you have read about income statements in this chapter and in the Becker materials, tell us what you have learned about the company from reviewing its income statement.

ACCT 304 Week 3 DQ 2 Cash-Flow Statement:

The Statement of Cash Flows has historically given students a lot of heartburn, but it really isn’t that scary. A cash-flow statement, simply stated, reports the uses (where the cash was spent) and the sources (where the cash came from) of cash during a period. Let’s start with a very simplistic set of facts. I run a CPA firm, and I billed my clients $50K during the month of February. To earn that $50K, I incurred $20K of wage expense and another $10K of overhead (rent, utilities, insurance, etc.). So I made $20K profit, right? So I am sitting pretty? Not necessarily. What if I now tell you that $40K of my billings have yet to be collected? And my E&O insurance carrier increased my premium and I had to pre-pay $10K of premiums this month. How does my cash flow differ from my profit? Will these transactions appear on my income statement? My cash-flow statement?

ACCT 304 Week 3 Homework Assignments:

Exercise 4-1, Exercise 4-3, Exercise 4-14, Exercise 4-15, Exercise 4-16

ACCT 304 Week 3 Quiz :

(TCO 5) Popson Inc. incurred a material loss that was not unusual in character, but was clearly an infrequent occurrence. This loss should be reported as
(TCO 5) Provincial Inc. reported the following before-tax income statement items:
Operations income: $600,000Extraordinary loss: $ 100,000

Extraordinary gain: $60,000

Provincial has a 30% income tax rate.

Provincial would report the following amount of income tax expense as a separate item in the income statement

(TCO 5) The financial statement presentation of a change in depreciation method is most similar to that of reporting
(TCO 5) Cash flows from financing activities include
(TCO 5) Review Rowdy’s Restaurants cash flow (in millions):
Week 4

ACCT 304 Week 4 DQ 1 Revenue Recognition:

When a company sells a product for cash, it generally recognizes the revenue. However, there are situations when it is not always clear when a company should recognize the revenue. How do you handle a car dealership that sells a warranty contract to its customers for $650 that will cover the next 5 years?

ACCT 304 Week 4 DQ 2 Time Value of Money Concepts:

You might think of the “time value of money” to be a topic for Finance class, but accountants need an understanding of this topic as well. Let’s discuss where/why an accountant may need to use these skills/calculations.

ACCT 304 Week 4 Homework Assignments:

Exercise 5-8, 6-1, 6-3

ACCT 304 Week 4 Midterm Set 1 :
(TCO 1) Which of the following has the authority to set accounting standards in the United States?
(TCO 2) The conceptual framework’s qualitative characteristic of faithful representation includes:
(TCO 3) A sale on account would be recorded by:
(TCO 3) When a tenant makes an end-of-period adjusting entry credit to the “Prepaid rent” account:
(TCO 3) Permanent accounts would not include:
(TCO 4) Noncurrent assets include:
(TCO 4) The acid-test ratio is also known as the:
(TCO 5) Popson Inc. incurred a material loss which was not unusual in character, but was clearly an infrequent occurrence. This loss should be reported as:
(TCO 5) On June 1, 2013, Romano Inc. changed the estimated useful life of its office equipment from 20 to 12 years. This change would be accounted for:
(TCO 5) In the operating activities section of the statement of cash flows, we start with net income:
(TCO 5) The Maytag Corporation’s income statement includes income from continuing operations, a loss from discontinued operations, and extraordinary items. Earnings per share information would be provided for:
(TCO 5) Expenses in an income statement prepared under International Financial Reporting Standards:
(TCO 4) The balance sheet reports:
(TCO 4) Which of the following groups is not among the external users for whom financial statements are prepared?
(TCO 5) What would be Misty’s net income for the current year?
(TCO 4) Listed below are account balances (in $millions) taken from the records of Symphony Stores. All of these are permanent accounts, except the last two that have yet to be closed. The installment receivables are current. Symphony uses
(TCO 4) Briefly explain the purpose of the disclosure note on significant accounting policies. Provide two examples of what might be found in this note.
(TCO 2) What is the SEC and how is it involved with accounting standard setting?
(TCO 5) Give an example of a non-cash financing and investing activity and explain when and how it would be reported in the financial statements
(TCO 3) Describe what is meant by unearned revenues and give two examples
ACCT 304 Week 4 Midterm Set 2:
(TCO 1) One of the implications of technology in HRM is
(TCO 1) All of these are workforce diversity characteristics, except
(TCO 2) A small distribution organization uses a payroll company to provide employee compensation services and keep timesheet records and employee attendance history. This situation is an example of
(TCO 2) A large manufacturing organization with 20 geographically dispersed production facilities recently cut its HRM staff by 60%. Each site has a few generalists, but specialist needs in recruiting and selection planning, employment law, training, and benefits administration have been consolidated into one location. This situation is an example of
(TCO 3) A company used a personality test to select job candidates for customer service positions. There were 40 male candidates and 20 female candidates. It appeared that 30 men passed the personality test, and five women passed the personality test. Was there evidence of disparate impact against female candidates with this personality test?
(TCO 3) Under Title VII, the first measure of determining potentially discriminatory practices is
(TCO 3) Which of the following laws extended leave for family matters?
(TCO 4) Sharon, vice president of human resources for a large textile firm, is in a strategic restructuring meeting. The discussion topics include which one of the three production facilities to close. There are 40 employees at each of the facilities. When asked, “What should we tell the employees?” Sharon responds
(TCO 5) Leona has gathered job analysis data with a structured questionnaire for managerial jobs in remote locations of her firm. Exit interviews have produced comments such as, “You should have told me what was really expected.” She wants to use an additional collection technique to avoid misrepresentation in job descriptions. Leona’s boss told her, “Be thorough. Job analysis time and cost are nothing compared to the cost of replacing these managers.” Which method should she use?
(TCO 4) Which of the following is not one of the guidelines for administering discipline?
(TCO 5) This job analysis method requires job incumbents to record their daily activities.
(TCO 5) Where does job analysis occur in the strategic planning process?
(TCO 6) Jane is the director of recruiting for a large corporation. Which of the following is a warning signal that her efforts are not effective?
(TCO 6) A benefit of a good recruiting program is indicated by which of the following?
(TCO 6) What is the difference between a conditional job offer and a permanent job offer?
(TCO 6) Which of the following is an individual who is recruited as an alternative to do specific work at a location on or off the company’s premises?
(TCO 7) In the selection process, the employment testing should occur after
(TCO 7) Why are performance simulation tests used more often today instead of written tests in the selection process?
(TCO 7) Application forms typically include all of the following except
(TCO 8) Which is not an on-the-job training method?
(TCO 8) What is an employee development method that involves exercises such as case studies, decision games, and role plays?
(TCO 8) Shannon is in line for a senior vice president position at a large hotel conglomerate. She has just received a letter appointing her to the national environmental task force for water and electricity conservation
(TCO 9) Hector is a research scientist in a large company. He refuses to go to staff meetings but volunteers to attend conventions where he receives recognition for his accomplishments. He holds 17 patents (more than two for each year he has been with his company, and they are proudly displayed on his office wall), but will not work with his manager on quarterly goals. What is Hector’s Holland vocational preferences type?
(TCO 9) Career stages are important to employee development. The traditional stages are
(TCO 9) Melissa prefers solitary work to large groups, asking questions rather than answering them, and making her own rules instead of following others. What Holland vocational preference model best
(TCO 3) Explain the role of EEOC

(TCO 7) You are trying to get a job as a recruiter for an HR department for a large, multinational company. One of the questions you are asked in your interview is to describe the following types of recruiting methods, explain when you would most likely use each of them (i.e., what kind of jobs), and why (at least one reason each.) What would you say if the methods were online recruiting, career fairs, and employment agencies?

(TCO 8) You have just been promoted at the BBB Company and now have the responsibility of the employee orientation program. What components should be covered in the program? Explain what would be covered in your employee orientation program.

Week 5
ACCT 304 Week 5 DQ 1 Cash:

Cash is listed first on the balance sheet because it is the asset most readily available to pay off debt or use in operations. Cash is also one of the assets that most often “grows legs” and walks away. Therefore, it is important that any business protect its cash; it does so through Internal Control Procedures. Please start by defining Internal Control, then discuss specific procedures related to cash.

ACCT 304 Week 5 DQ 2 Receivables:

When a business extends credit to its customers, we call this Accounts Receivable. Often a business will grant its customers a discount. What are the two types of discounts, and how does the journal entry to record the sale change when there is a discount granted?

ACCT 304 Week 5 Homework Assignments:

Exercise 7-1, 7-5, 7-8, 7-28, 7-29

ACCT 304 Week 5 Quiz :

(TCO 7) Cash may not include
(TCO 7) On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. Flores uses the gross method of accounting for cash discounts. What is the correct entry for Flores on November 10?
(TCO 7) Which of the following does not change the balance in accounts receivable?
(TCO 7) Brockton Carpet Cleaning prepares a bank reconciliation at the end of every month. At the end of July, the balance in the general ledger checking account was $2,750, and the bank balance on the bank statement was $2,980. Outstanding checks totaled $680, and deposits in transit were $400. The bank statement revealed that a check written for $120 was incorrectly recorded by Brockton as a $220 disbursement. The bank statement listed service charges and NSF check charges totaling $150. The corrected cash balance is
(TCO 7) At January 1, 2011, Farley Co. had a credit balance of $520,000 in its allowance for uncollectible accounts. Based on past experience, 2% of Farley’s credit sales have been uncollectible. During 2011, Farley wrote off $650,000 to accounts receivable. Credit sales for 2011 were $18,000,000. In its December 31, 2011 balance sheet, what amount should Farley report as allowance for uncollectible accounts?
Week 6

ACCT 304 Week 6 DQ 1 Inventory Classification and Systems :

Merchandise Inventory is assets held for sale in the ordinary course of business of wholesale and retail companies. Manufacturing inventories are raw materials or WIP that will be used or consumed in the production of finished goods to be sold. Review the Annual Report that you chose for the Week 3 Discussion topic #1 and based on what you’ve read in the text and in the Becker materials, explain how inventory is presented on the balance sheet and what further information you found in the footnote disclosures about the inventory method and “Impairment of Inventory”, if any.

ACCT 304 Week 6 DQ 2 Inventoriable Costs Cost-Flow :

We read about the Perpetual and the Periodic Inventory System. Regardless of which system is used, under both, we need to assign dollar amounts to the Ending Inventory and Cost of Goods Sold so that we can trace how costs flow through the system. Start by identifying what is included in inventory and then discuss how each item might be treated differently in the Perpetual vs. the Periodic Inventory System.

ACCT 304 Week 6 Homework Assignments :

Exercise E 8-1, 8-9, 8-13

Week 7

ACCT 304 Week 7 Homework :

Exercises 9-1, 9-8, 9-13, 9-26

ACCT 304 Week 8 Final Exam:

Income from continuing operations sometimes includes gains from nonoperating activities.

Income from continuing operations is an after-tax number consisting of revenues, expenses, gains, and losses.

Income from continuing operations equals net income only in the absence of separately reported items.

Intraperiod tax allocation is the process of associating income tax effects with the income statement components that create those effects.

If the effective tax rate is 40%, a $200,000 before-tax extraordinary gain would increase net income by $120,000.

If General Motors ceased production of the Corvette, it would report any material gains or losses that would result under discontinued operations.

Discontinued operations require reclassification of prior years’ income statements but no change in prior years’ net income.

Operating income or loss from discontinued operations up to the disposal date is separately reported.

The measurement and disposal dates of discontinued operations must fall within the same fiscal year.

If an overall loss from discontinued operations is expected, then the loss is reported in the year in which the measurement date falls.

Estimated gains from discontinued operations can be reported in the measurement year only to the extent of estimated losses.

An item must meet the subjective criteria of being both unusual and infrequent to be reported as extraordinary.

The definition of what constitutes an extraordinary item should be independent of the operating environment.