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General Mills, Inc. Financial Accounting Case Study Module 1: A. General Mills Consolidated Statements of Earnings: 1. The recorded sale amount of almost $8 billion is not the actual amount of cash collected. The amount of $8 billion includes cash and credit sales. 2. Sales increased each year from 2000 to 2002. The difference between the year 2000 and 2001 was a 5.35% increase (5,450-5,173/5,173 = .0535). The difference between the year 2001 and 2002 was a 45.85% increase (7,949-5,450/5,450 = .4585). 3. The largest expense for General Mills for the years 2000, 2001, and 2002 was the same; over 50% of the revenue each year went towards the cost of sales. Sales in 2002 were the largest, about 7% more than the two previous years. 2000: (2,698/5,173) = .522 = 52.2% 2001: (2,841/5,450 = .521 = 52.1% 2002: (4,767/7,949) = .599 = 59.9% 4. Net Income: 2000: $614 million 2001: $665 million 2002: $458 million When comparing the net income figures for the past three years, it is seen that between 2000 and 2001, the net income increased by $51 million, but between 2001 and 2002, the net income decreased by $207 million. 5. A company's stock price is usually influenced by the amount of net income because when finding the price of the stock, you must divide the number of stocks by the net income. So, the higher the net income, the lower the price of stocks, which is what buyers look for (means better profit). 6. Even though General Mills paid dividends in 2000, 2001 and 2002, the corresponding total dividend payments did not appear as an expense on the income statement because dividends are not an expense; they are a financing activity that is reported on the statement of stockholder's equity. They are payments that are made to only the owners of...
pages: 6 (words: 1399)
comments: 0
added: 12/14/2011
Auditing - The Risk-Based Approach Introduction Risk, plays a large part in the world of Auditing. Audit risk, represents risk to an auditor or an audit firm, as the risk of paying damages to a client may arise out of negligent work when trying to show a true and fair view of a set of company accounts. All audit work involves some level of risk; this may be because a set of company accounts have been misstated due to error or fraud, or the auditor failed to detect the errors or fraud. In addition, these problems may have occurred due to inadequate sample sizes when determining the level of risk or the auditor failed to use proper auditing policies. To evaluate the level of risk related to specific areas of the audit, three components can help. The first is Inherent risk were environmental factors, (background knowledge of the client and were past audits indicate no difficulties) are concidered against whether or not they would lead to a material error, before considering the 'function of internal controls'. Next is Control risks were the 'system of internal controls' is assessed against the possability of preventing material error, or detecting it in time using internal controls. Last is Detection risk were the auditors procedures may fail to detect a material error not picked up by the internal controls. This report explains why the risk-based approach has become popular with external auditors and how it has been linked to materiality and sampling levels. Findings Risk Based Approach The role of an external audit, no matter what type of organisation it is, is to show a true and fair view of the company accounts and to abide by the auditing standards. Recently the risk-based approach has become as valued as auditing standards and adopted by most. The reason for...
pages: 6 (words: 1504)
comments: 0
added: 01/17/2012
Accounting Report is the leading provider of competitive intelligence for accounting firms. It is renowned for its straight reporting and analysis of the news, developments, and trends that have defined the profession for over 20 years. Topics covered include breaking news, in-depth firm profiles, mergers and acquisitions, office closings, auditor changes, key personnel moves, legal and regulatory issues, competitive intelligence, niche practices and product launches, and much more. Here are several comments of what some people say about public accounting report: "Insightful information you don't see anywhere else." Says Sean Egan, Managing Partner, KPMG. "I look forward to every issue." Says Robert Leavy, Partner, Grant Thornton. "Superior job of capturing current events." Says Dennis Hanno, Professor, Department of Accounting, University of Massachusetts. An interesting issued that came across the Wall Street Journal the last month was regarding Internet Financial Accounting Reporting. How can companies improve the usefulness of their financial accounting reporting practices? Many companies are using the power and reach of the Internet to provide more useful information to financial statement readers. Recent surveys indicate that over 80% of large companies have Internet sites, and a large proportion of these companies' Web sites contain links of their financial statements and other disclosures. The increased popularity of such reporting is not surprising, since the costs of printing and dissemination of paper reports could be reduced with the use of Internet reporting. How does Internet financial accounting reporting improve the overall usefulness of a company's financial reports? First, dissemination of reports via the Web can allow firms to communicate with more users that is possible with traditional paper reports. In addition, Internet reporting allows users to take advantage of tools such as search engines and hyperlinks to quickly find information about the firm and, sometimes, to download the information for analysis, perhaps in computer spreadsheets. Finally, Internet reporting can help...
pages: 5 (words: 1363)
comments: 0
added: 01/13/2012
California School System Textbook Replacement: Analysis California schools to teach fiction as history? School history textbooks in California are sought to be revised by pressure groups to accommodate and extol the “hindutva" view of Indian history, says Romila Thaper, Professor of History of Jawaharlal Nehru University, New Delhi and Michael Witzel Professor of Sanskrit of Harvard University, in an article published in today’s (March 9, 2006) edition of the Times of India, New Delhi.. The California State Board of Education (CSBE) is currently seeking community suggestions in regard to the updating of school textbooks. This has been seized by the American Hindutva lobby, the American arm of the rabidly Hindu communal organization, the RSS, as an opportunity to propagate and inculcate its distorted views about ancient India as history. When the Hindu communal Party, the BJP, was in power in India, the history textbooks in the schools were rewritten to suit their views; but these are being set right now. The RSS and the BJP, under the Hindutuva theology, have claimed (with no evidence at all) that “the first Indian civilization is 1900 million years old, the Ramayana and Mahabharata are historical texts to be understood literally, and ancient Hindu scriptures contain precise calculations of the speed of light and exact distances planets in the solar system". These, undoubtedly would be some of the gems of ancient Indian history, along with a dose of Vedic mathematics, that would be in the revised textbooks in California, if the Hindutuva lobby has its say accepted The authors say that “California has a large Indian American population and one of the largest school systems in the country. Changes made there have immediate repercussions for school systems across the whole country". The authors go on to narrate how the Hindutva lobby gained such a strategic position in the CSEB revision program....
pages: 3 (words: 575)
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added: 02/09/2012
Accountants Thesis: An accountant has many choices to what particular field of accounting to specialize in depending on the financial information she wants to analyze and how it is done. Class: Accountants Special Interest: Analyzing Financial Information Subclasses: Financial accountants Tax accountants Internal auditors A college student decides she wants to become an accountant. General accounting and bookkeeping classes can be taken in high school. In college, the student needs to decide on a more specific field of accounting. An accountant has many choices as to what particular field of accounting to specialize in depending on the financial information she wants to analyze and how it is done. Financial accountants, tax accountants and internal auditors are all accountants in general, but require different training and work methods. A financial accountant records economic data and periodically prepares reports that show profit and other financial information of a company using the generally accepted accounting principles. The reports prepared by the accountant are useful for managers, and also for owners, creditors and the public. Based on information in the reports the public can use the reports to choose a company to invest in. Because a financial accountant is employed by an individual company, she is considered a private accountant. Another type of accountant is a tax accountant. A tax accountant prepares yearly tax returns for individual clients. The accountants have to use constant data such as rates of pay and other information to determine the proper amount of taxes to be paid. These accountants have to take a class once a year to catch up on yearly changes in tax laws and regulations. If a tax accountant has met state experience requirements, she may want to take exams to become a Certified Public Accountant (CPA). A third type of accountant is an internal auditor. Auditors are sponsored by the Institute of...
pages: 2 (words: 492)
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added: 02/12/2012
Comparing the financial performance of Qantas and Woolworths. Discuss the aspects of the financial information that may be insufficient or misleading I have chosen Qantas Airways Limited & Woolworths Limited to be examined in this literature. Qantas is Australia's leading domestic carrier and one of the world's premier long haul airlines. Qantas is also one of Australia's most recognized brand names, with a reputation for excellence in safety, operational reliability, engineering and maintenance, and customer service. Woolworths' Supermarket is Australia's leading food retailer which provides customers with the best-priced and widest range of fresh produce, dry groceries and other merchandise, underpinned by its quality assurance commitment. However, from January 2003 onwards, due to the tumultuous events of 9/11, the bombings in Bali, the war in Iraq and the devastating outbreak of Severe Acute Respiratory Syndrome, all areas of Qantas were affected, including the profitability of the company throughout the year. Qantas recorded an EBIT of $567 million, down from $112.3 million last year after being severely impacted by the effects of the SARS virus on international air travel. (www.qantas.com.au) Contrasting with Woolworths, it achieved an EBIT with increase of 13.7% to $945.7 million, reflecting the excellent sales and profit growth accomplished in the market with further reductions in the operation costs. (www.woolworthslimited.com.au) In comparing the financial performance of both the companies, Qantas and Woolworths generated a return of 2% and 8.15% on total assets respectively and a return of 6.5% and 49.34% on owners' equity respectively. This shows that Woolworths performs better in terms of both the return on total assets and return on owners' equity than Qantas, allowing us to say that Woolworths appears to be performing significantly better in the efficiency of the use of assets and in making returns for the shareholders. There is a large contrast between the financial...
pages: 6 (words: 1542)
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added: 12/03/2011
Comparison of United States, United Kingdom, and Chinese Accounting Systems, Accounting Standards, Accounting Practices This report discusses the accounting practices of the following countries U.K, U.S.A and China. An analysis of these different accounting systems will be conducted on issues such as the growth and background, social, economic and fiscal pressures that have led to each nations current characteristics. Concluding on the direction each nations accounting systems and practices seem to be heading towards. Introduction The main characteristics of U.K accounting is that it is highly dominated by organised accounting profession, which only relate to limited liability companies, no other such entity. A separate fiscal accounting has been developed entirely from commercial accounting. Public sector in the U.K follows its own different rules in accounting. U.K was one of the initial and first countries in the world to develop and have Companies acts containing provisions and also one of the first professional accounting bodies was established in the U.K. Professional accountants and company law play a key role in dominating the U.K corporate financial reporting and play a significant influence varying from external and domestic factors. Britain's financial market is structured around a "capital financial market based financial system" where the stock market funds large scale businesses, trading securities and pricing role. The stock exchange and taxation system have very little influence in financial reporting. Having said that, the stock market has involvement in developing financial reporting standards for listed companies. Although U.K seems to have developed its own companies act and regulations, it still has received indirect foreign influence from member states of the European union through EU directives and from U.S.A with their new accounting standards. Financial reporting and accounting in the U.S.A seems to have a large and dominant influence on accounting in the world today with its largely consistent standards...
pages: 14 (words: 3683)
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added: 01/15/2012
Media Watch Segment – Spoken Task Expansion of the Japanese Whaling Industry (Name) 710 words Presenter: Welcome to Media Watch, I'm Ben Ison. Tonight we investigate the controversial and diplomatic issue of the whaling industry. As the Japanese fishing industry attempts to expand the whaling trade in Australian territorial waters, they have been engaged by the Australian government in a heated argument. While Japan claims the intended expansion of an additional 400 whales slaughtered annually, as "scientific research", Australia is fighting hard diplomatically to protect the gentle species. The issue has been closely pursued by the media, but we are often subject to predisposed information. How can we understand the issue without extracting the biased perceptions from the media and separating the facts from the fiction? It seems that each commentary is subject to a different perspective of the argument. In an article presented by NEWS.com.au on May 18th, 2005 titled: Voice-over: "PM slams Japan whaling plan" Presenter: we are exposed to biased reporting in favour of whale support by the Australian government. The Prime Minister, John Howard is quoted: Voice-over: "It is not science to harvest 400 whales" Presenter: As Japanese whalers are now determined to hunt humpback whales, along with minke and fin whales, Australia is working alongside the American, British and New Zealand governments to put forth a joint proposal to the Japanese government, in a bid to convince Japan to reconsider the proposed expansion. The majority of the article is quotes by the Australian PM as he expresses his frustration and the stand he will take in relation to the controversy, preferring to go down the "diplomatic path". By giving only the opinion and assumed perspective of the Australian population, this silences the Japanese government and its population. It positions readers to side with the anti-whaling agreement and shatters the grounds of Japan's argument of...
pages: 3 (words: 728)
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added: 12/13/2011
1. In today's society, business and cultural environment are playing a significant change in the life of many people. More and more businesses are beginning to operate both domestically and internationally. The expansion of business has lead the world into a new era filled with creative technology, making life easier. With the effects of international pressures, businesses sometimes need to adapt to or try to influence culture. Culture is what people value and believe. Trying to change a person's perspective about one's culture is not easy. Yet, cultural environment is changing slowly, as people are more concern with what is going on economically, politically, financially, and social and legally. Due to these changes, international factors are becoming more important. Along with that comes for accounting change. Many businesses have to conduct a lot of surveys and advertisements to see what consumers are looking for. Global business has created many jobs, competition, technology, and much more. With these differences in mind every business might have its own accounting system. This is because of cultural, economic, political, and legal system differences. Laws that are convenient and easy to understand in the US might have no meaning at all to another country. Usages of vocabulary can have a great effect in business depending on what the word means. Developing countries might have a much simpler accounting system than those of the developed countries. Every country has its own style of living and working conditions. If one accounting system were use to satisfy everyone country it would be confusing and worthless to certain countries because of differences in things like taxes, sizes of business, compensation plan, or rules and laws. Since the world has a different perspective of how the world should be manage decisions are made very differently. So, it is important for...
pages: 4 (words: 901)
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added: 01/18/2012
Discussion of Internal Controls that are placed in an Accounting information System In accounting systems, certain controls are needed to ensure that employees are doing their jobs properly and ensure that the system runs properly. These checks are in the best interest of the organization. These controls come in the form of internal and external controls for the system. The internal controls are the checks that are placed in the system my the company's own management and directors. Today more and more companies are moving from the manual accounting systems to computerized accounting information systems. The advantages of a computerized system are increases in the speed and accuracy of processing accounting information. However, as systems become computerized, the internal controls for that system has to be adapted accordingly. This is because computerized systems bring with them certain unique problems that can only be removed or minimized by adapting the present controls and adding new controls. These problems are • In a manual system there is a paper trail for the internal auditor to follow. All records and transactions are kept on paper and so an auditor has clear and documented proof of what has transpired. Computerized systems rarely have a clear paper trail to follow. Since computers do all of the sorting of the information the company rarely sorts the source documents. Also the computer does most of the calculations and processing so there would not be the amount of documentation that there would be in a manual system. • Another problem of computer systems is the fact that there can be difficulty in determining who entered the data. In a manual system the identity of the person entering the data can be identified possibly by the person's handwriting. This cannot be done in a computerized system. This makes it very difficult to determine...
pages: 9 (words: 2243)
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added: 12/27/2011
Introduction Lucent Technologies Lucent Technology is North America's leading maker of telecom equipment and software, including switching and transmission equipment and business communications systems. Lucent Technologies, started trading publicly in 1996 with an initial public offering that was, at the time, the largest in domestic history (Hayes). In December 1999, Lucent's stock reached a high of $77.78 and was the nation's fourth most widely held stock (Romero and Atlas). But by July 2001, Lucent's stock was trading at $6.43, the SEC was investigating its accounting practices, and several former, high-level managers had been sanctioned by the SEC or were under criminal indictment for wrong-doing while at Lucent (Romero and Atlas). The plunge in stock value (exhibit 1) was primarily the result of a November 21, 2000, announcement in which Lucent said it had to restate its financial statements as a result of an internal investigation revealing accounting irregularities. Lucent's restatement reduced revenues by $679 million (McGough, Bloomberg). As early as June 2000, media attention had begun to be directed towards Lucent's aggressive accounting policies. A Wall Street Journal article in June, 2000 suggested that Lucent Technologies might be engaging in creative accounting practices, noting that Lucent's receivables were rising at 49% while revenues were rising at only 20% (Wall Street Journal). Accounting Policy Reporting objectives Lucent's chief executive Richard McGinn had turned Lucent into a Wall Street star by increasing sales at a double digit pace and was determined to maintain Lucent's growth. Many observers believed that Lucent's sales projections were imposed on sales executives by the chief executive who was intent on maintaining a 20 percent growth rate (Berman and Blumenstein). Don Peterson was appointed the executive vice president and CFO; he reported to CEO Richard McGinn and was accountable for the Corporate Finance Organization. Peterson explained in a 1999 article...
pages: 5 (words: 1191)
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added: 12/26/2011
The venture I would like to start is a home-based accounting business. My business would be called McCounting. McCounting will analyze and interpret the financial and economic activities of a business as well as home owners personal activities. McCounting would solve many other entrepreneur's problems by eliminating the stress of the financial aspects of their business. My business would also solve regular home owners the headaches and hassles they may have come income tax time. My business would also take advantage of people's actual wants and needs because people want convenience and simplicity rather than endless hours of number crunching. McCounting will fit almost everyone's financial budget and let's you relax because you know your financial's are in good, reliable hands. Guaranteed. The entrepreneurial characteristics I poses include the following: perceptive, imaginative, very persistent, hard working, goal setting, self confident, very flexible, and extremely independent. I am perceptive because when I am faced with problems I love the challenges and opportunities that arise from them. I am imaginative because I get visions of what I want the outcome of the problem to look like, and then I create it or produce new ideas to improve it. I am persistent because I never give up on things, no matter what the circumstances were. I stick with my ideas until I have tried everything to make the problem better. If I have come to a dead end with my idea, I change my idea and start again until it does work. I am a goal setter because once I have completed or on the verge of completing my first goal I create another one and challenge myself even harder than the first time. I am hard working because being perceptive, persistent, and goal setting do not come with little or not work, they...
pages: 4 (words: 991)
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added: 12/31/2011
1.0 Introduction 2 2.0 Data Collection 2 2.1 Personal Budget 2 2.2 Car deal 2 2.3 Payment method of Car 3 2.4 Selecting a Credit Card 5 2.5 Employing left over cash 6 2.6 Future Income 6 2.7 Future value of trip 7 2.8 North Beenleigh house 7 2.9 Financing Shailer Park home 9 3.0 Conclusion 9 4.0 Recommendations 10 5.0 References: 11 6.0 Appendixes: …………………………………....………After 11 1.0 Introduction The information below has been specially gathered and designed for Mr. Bernard Fanning who may use the following data to make future decisions. This report contains matters concerning Personal Financing which is the ability of an individual to provide funds in order to achieve personal goals and investing which is defined as the putting out of money into a project which in return you may receive a higher amount. 2.0 Data Collection The information and figures produced on this report was collected and presented by, Salman Clay. The resources and information used to produce this report is recorded on the reference and appendix pages, see table of contents for details. 2.1 Personal Budget Income: Total: Monthly Income 3750 3750 Expense: Food 400 Electricity 100 Phone 140 Clothing 200 Entertainment 600 Car expenses 150 Insurance/Registration 150 Miscellaneous 200 Mortgage 1200 3140 Income – Expense: 610 Saving a Year: 7320 2.2 Car deal It has been stated that Mr. Fanning would like to trade in the Toyota corolla, ascent, lift back, four speed, 2000 model for a better much more luxurious Mazda 6, semi-automatic, five speed, 2008 model. Using the information shown on the appendix A, there is a good chance that you may receive an average price of $7200, if the Toyota corolla is traded in. Because the car is said to be in very good condition the price obtained from appendix A is the highest price for trade in. This price does not include fees which are to be paid when buying or selling a vehicle. Examples of the fees are transfer and registration fees. The car that...
pages: 12 (words: 3240)
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added: 11/20/2011
Political, Economic & Social effects of Accounting Standard Setters 'The view that accounting standard setters consider the economic, political and social consequences of accounting standards is consistent with the view that accounting reports, if compiled in accordance with accounting standards and other generally accepted principles, will be neutral and objective' SYNOPSIS Objectivity and neutrality are the ultimate goals of general purpose financial reporting. However there are many factors involved that make this goal almost impossible to attain. Economic, political and social issues are huge influences on the Accounting Standard setting process, and these influences spill over into everyday accounting, with personal gain often ahead of reliability and objectivity. Users of financial reports have demands that need to be satisfied, and regulatory boards involved in Standard setting have done their best to ensure that information is clear and reliable. Considering these factors, Accounting does not exist in a vacuum, Accountants are human beings, not robots and the profession has strict guidelines and heavy penalties for unprofessional or fraudulent activity. It is thus clear that every attempt is made to acknowledge the operating societal factors, gauge the impact they have on different industries at different times and move from that point. The result than, has to be, the best attempt at a neutral and objective report by the professional accountant. Economic, political and social issues are powerful driving forces within any society. These issues therefore need to be focused on when major decisions in industries, are being made. One industry that heavily relies on, and incorporates economic, political and social issues in its' decision-making, is that of Accounting. The Accounting profession is made up of many standards and regulatory boards that govern the way in which entities maintain their general-purpose financial reports. Accounting standards set minimum benchmarks of the quality required in financial reporting. They specify that...
pages: 9 (words: 2267)
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added: 11/13/2011
The history of credit and banking goes back much further than the history of coins. Nevertheless the story of the origins of money goes back even further still. What is Money? At first sight the answer to this question seems obvious; the man or woman in the street would agree on coins and banknotes, but would they accept them from any country? What about cheques? They would probably be less willing to accept them than their own country's coins and notes but bank money (i.e. anything for which you can write a cheque) actually accounts for by far the greatest proportion by value of the total supply of money. What about I.O.U.s (I owe you), credit cards and gold? The gold standard belongs to history but even today in many rich people in different parts of the world would rather keep some of their wealth in the form of gold than in official, inflation-prone currencies. The attractiveness of gold, from an aesthetic point of view, and its resistance to corrosion are two of the properties which led to its use for monetary transactions for thousands of years. In complete contrast, a form of money with virtually no tangible properties whatsoever - electronic money - seems set to gain rapidly in popularity. All sorts of things have been used as money at different times in different places. The alphabetical list below, taken from page 27 of A History of Money by Glyn Davies, includes but a minute proportion of the enormous variety of primitive moneys, and none of the modern forms. Amber, beads, cowries, drums, eggs, feathers, gongs, hoes, ivory, jade, kettles, leather, mats, nails, oxen, pigs, quartz, rice, salt, thimbles, umiacs, vodka, wampum, yarns, and zappozats (decorated axes). It is almost impossible to define money in terms of its physical form or properties since these...
pages: 2 (words: 538)
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added: 01/31/2012
Reorganization and divestiture are occurrences that are unusual in business. Some forms of reorganizations include mergers, sale offs, liquidations, and perhaps, outsourcing among others. The reorganization of companies is usually intended for improving the companies’ abilities to grapple with changing realities in the business realm. The execution of reorganization and refinement is tasking and rigorous. This process usually involves a lot of logistics, legal procedures, monetary expenses as well as changes in the culture and traditions of companies. While the ultimate hope for a company reorganizing is to increase efficiency and stimulate increased output, it is not usually guaranteed that such outcomes are realized. This paper attempts to give some reasons, why companies would reorganize and how this affects the affect the company’s finances and business plans. A company may reorganize or divest from its parent organization is if there is an intended desire to enjoy tax-free distribution of subsidies. Robert Brown argues that this process happens when a parent company has no accumulated profits. It may also happen if a company has worthless stock market ratings. In this case, the company’s stock worth cannot pay shareholders more that what they bought the stocks for. If this happens, divestiture may be appropriate for the company to avoid subjecting the stakeholders to further losses. However, Brown warns that it is possible to tax free organization under this process, but this cannot work if the old company sold the stock and distributed the cash proceeds to the former stakeholders. If this happens, then the company is taxed, and this makes divestitures irrelevant as a way of tax evasion (Brown and Richard, 2007). In his journal entry titled, Some Considerations in Accounting for Divisive Reorganizations, Valden Lembke points out that another way that a company can reorganize is through purchase treatments. Purchase treatments...
pages: 11 (words: 2792)
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added: 09/26/2012