Purpose of Assignment
This week’s activity illustrates the role a company’s accounting method plays in financial statement reporting. In this assignment students evaluate the events occuring in a business setting and determine how to properly analyze those events to identify the impact on both cash and accrual accounting methods.
Assignment Steps
Resources:Generally Accepted Accounting Principles (GAAP) U.S. Securities and Exchange Commission (SEC)
Tutorial help on Exceland Word functions can be found on the MicrosoftOffice website. There are also additional tutorials via the web offering support for Office products.
Scenario:BizCon a consulting firm has just completed its first year of operations. The company’s sales growth was explosive. To encourage clients to hire its services BizCon offered 180-day financing – meaning its largest customers do not pay for nearly 6 months. Because BizCon is a new company its equipment suppliers insist on being paid cash on delivery. Also it had to pay up front for 2 years of insurance. At the end of the year BizCon owed employees for one full month of salaries but due to a cash shortfall it promised to pay them the first week of next year.
As the senior accountant the Chief Financial Officer has asked you to prepare a memo to be sent to management notifying them of the delayed wage payments.
Preparethe memo in a maximum 700 words including the following information to better outline the situation:
Formatyour assignment consistent with APA guidelines.
