Assignment 2: Course Project - AU ACC202

The main source of operating revenue for A-Plus Accounting Services Company will be from tax and bookkeeping accounting services to small businesses and individuals. The company will have the ability to offer accounting services to small businesses and individuals will less than $3 million in annual revenues. The main target market will be companies in the service and manufacturing industry and some farmers.

Anticipated expenses for A-Plus Accounting Services Company are utilities, salaries and wages, utilities and rent. The company will also have accounts payables for office computers and another for office furniture. A-Plus Accounting Services Company does not require an inventory to deliver services; therefore, direct costs of labor will be accounted for as the cost of services or cost of revenue (Kieso & Weygandt, 2015). The company will have no direct material costs but it will have labor costs from salaries paid to professional delivering the company’s services and cost of delivering the services, for example, travel time and gasoline. The direct and indirect costs can be reported as expenses on the income statement because the company will not need to carry an inventory. The costs of sales account will be separate from the expenses account in the income statement.

Reference Kieso, D. E., & Weygandt, J. J. (2015). Financial & managerial accounting. John Wiley & Sons.