accounting-3 discussions

Module 1 Discussion

Discussion Topic

 

In this week’s discussion, we will introduce the basic accounting equation. Understanding the relationship between the equation’s key components is essential in learning accounting. Those components are assets, liabilities, and equity. We will also introduce basic transactions within a company that can occur, and how those transactions are recorded. Finally, we look at the 4 basic financial statements and their particular importance.

1).  Define and discuss the accounting equation and each of its components. 

2).  Give an example of a typical business transaction and discuss its impact on the accounting equation (Your explanation should describe which account(s) are increasing/decreasing and whether those accounts were "debited or credited").

3).  Finally, list and discuss the importance of each of the 4 basic financial statements. 

Be sure you cite references appropriately (APA). Also, please review my grading policies related to 1st Posts for full credit.

Module 2 Discussion

Discussion Topic

 

In this module, the discussion focuses on the differences between accrual and cash-basis accounting. We will also look at the deferral and accrual adjusting journal entries. Students will be asked to prepare an example of each adjusting journal entry type (deferral and accrual). Students will also be expected to understand the difference between an Unadjusted Trial Balance and an Adjusted Trial Balance, and the purpose of the Adjusted Trial Balance.

1).  Define the accrual basis of accounting, and why it is generally preferred over the cash basis?

2).  Describe the two main types of adjusting entries (deferrals and accruals), and give at least 1 example of EACH of the 2 types. (ie, You should have 2 complete journal entries – 1 deferral entry, and 1 accrual entry – Be sure to have a debit account and a credit account with amounts in your entry)

3).  Explain what an Unadjusted Trial Balance is, and the relationship between the Unadjusted Trial Balance, adjusting journal entries, and the Adjusted Trial Balance. 

4).  Finally, what do we do with the Trial Balance, and what statements is it used to produce?

Module 3 Discussion

Discussion Topic

 

This week, we will be reviewing Chapter 5 on Merchandising Operations. Companies like Wal-Mart, Target, and Amazon are all examples of companies that purchase inventory from suppliers, and then sell those products to consumers.

1).  Describe the 2 formats for the income statement of a merchandising company, and list the respective sub-totals found in each income statement format. (You should describe some of the accounts found on each type of income statement).

2).  a) Describe purchase discounts and purchase returns & allowances.

      b) Describe the 2 shipping terms methods companies use when delivering products, and how freight costs are accounted for. 

3).  Sales on Account - Many sales are made on account (on credit) instead of with cash or a credit card. Assume that your new company purchases products for resell to customers, and your plan is to sell those products at a profit. Make the appropriate journal entries to record the sale (on account - ie., on credit) assuming your company sells 4 of those products to a single customer. (You should select any price you wish to pay to your vendor for the purchase).  Hint -  There will be 2 entries... Be sure to include both the sale to the customer, as well as the impact of the reduction of inventory through cost of goods sold.