Practice Set - Assignment 1 - Service Business Accounting Cycle

Net Sales – totaled $4,485,000.00 for year 6, and grew +33.3% or $1,495,000.00 between years 6 to 7.

An accounting cycle is a process, or a series of activities, that consists of collecting an organization’s transactions at the end of a reporting period to prepare essential financial statements of a business (Fleury, 2015). The accounting cycle is a strict, methodical set of rules used to ensure the accuracy and conformity of financial statements (Investopedia, 2017). The steps involved with an accounting cycle, the roles each of the step facilitate, the impact of omission, and what financial statements are assembled from the accounting cycle data.

Payton Approved, a new dog bakery opened in July 2014. To measure the businesses success the first six months are reviewed. The first topic will discover the steps of the accounting cycle with descriptions of each process. Next, one will learn and analyze a report of the importance of each step for the accounting process to measure success. The last analyzed step will discuss how the omission of one step can impact the success of the company.

Accounting is commonly described as the language of business. It is very important for all business owners to have very good understanding of their finances. Having the knowledge of your business finance, you will know where the money is going. Every business owner should have a good understanding of finance. To have a good understanding business owners needs to understand basic accounting steeps, how does accounting play a role in their business, how to define a financial statement and how the omission of any of these steps would affect the success of a business. Once you have an understanding of accounting/finance and the how it plays

Revenue recognition is one of the top causes for financial statement restatements. In addition, revenue recognition is an area commonly questioned by the Securities and Exchange Commission (SEC) staff in their review of public filings and resultant comment letter process. Furthermore, revenue recognition is often prey to financial fraud.

The purpose of accounting cycle report is to keep the best accounting records up to date. It also assist in producing the best possible financial statement that shows the true pictures of the business or organization and help making a good call whether business is profitable or not.

(d) Received $800 from customers in payment of their accounts. Cash 800/ Net Income 800

a service department’s costs have been allocated, costs are not reallocated back to it under

Within this organization, revenue is generated from the services given to patients and the medication given to them. Services such as, Social services, dietary, physical therapy, occupational therapy, speech therapy and nursing services. Medication distributions and ancillary services impact revenue and reimbursements.

You may omit explanations of the transactions. Skip a line between eah set of journal entries.

Goal 1b has not been achieved and still, 300 million workers are living below the poverty line. The global employment to population ratio which is the amount of working age people who are employed in the world has only fallen from 62% in 1991 to 60% in 2015. This shows very little change. The 2% fall was affected by the global economic crisis from 2008 to 2009, and the aftershocks. Since 1991 there has been a drop of 10% in the amount of men and women aged 15-24 who are employed. From 5/10 employed in 1991 to 4/10 employed in

31, 2004) was computed, then the total Accounts Receivable balance would be $4,578,008.14. This indicates

b. Trace the line item “Balance per Bank Statement” – Accuracy and Existence (AU-C 315.A114 a-iii, b-i)

Received $800 from a customer in partial payment of his account receivable which arose as a result of sales during June.

Accounting is the art of measuring and communicating financial information. To maintain uniformity and consistency in preparing and maintaining books of accounts, certain rules or principles have been evolved. These rules or principles are classified as concepts and conventions. One of the important concept in accounting is “Measurement” (Mattessich, 1977)