Acc/291 Week 1 Reflection

Team D Reflection During Week Two of ACC/291 Team D’s objective was to discuss the week’s topics as outlined in the syllabus. Additionally, team members were to discuss any challenges or problems with the topics that may have been experienced. Below is a summary of Team D’s discussion for Week Two.

Objective 2.1 Differentiate among accounts payable, notes payable and accrued expenses. The team’s objective was first to differentiate and explain accounts payable, notes payable and accrued expenses. As discussed, accounts payable is the money owed to suppliers by the company. Most companies pay their invoices in thirty days, so they do not accrue any interest. Notes payable was defined as a promissory note that is written by a company to assure its lenders of future payment,
like an “I Owe You.” In most cases companies must repay this note in one year, and can accrue an interest every six months. A note payable will be listed under liabilities on the balance sheet as a current liability. Accrued expenses are the expenses that have accrued in a month at the end of the accounting period for which a bill or official document has not been received at the time of recording. Therefore, accrued expenses are a liability as the money for the expense will need to be paid out. Most of the team had a good grasp on accounts payable and notes payable. However, accrued expenses did pose a slight challenge. After further discussion and clarification, accrued expenses were simply understood as a place holder for and expense that will be received. This objective’s topic did not relate to either Fritz or Victoria’s field. Victoria works in retail receiving and Fritz’s prior work experiencing also involves receiving fields where accounting was not part of the job.

Objective 2.2 Prepare necessary journal entries to record the issuance of bonds, the periodic interest, and amortization of bond premiums and discounts. The second objective was to discuss preparing the necessary journal entries to record the issuance of bonds, periodic interest, and the amortization of bond premiums and discounts.
Issuance of bonds is a certificate of debt that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal. Bonds may be issued at face value, below face value (at a discount), or above face value (at a premium). When recording the Issuance of Bonds on the necessary journal entries these three different types of bond change the way the bond is recorded. Periodic interest is usually based on a period of time, i.e. daily, monthly, quarterly, semiannually or annually. Periodic interest is recorded based on the time period of the bond. Amortization is paying off debt in regular installments over a period of time. Due to the fact that bonds sold at a discount or a premium cost the company money, these costs must be paid back over the period of the bond to ensure a balance. There are two methods of amortizing bond premiums and discounts: 1) effective-interest method and 2) straight line
method.
This objective’s topic did not relate to either Fritz or Victoria’s field. Victoria works in retail receiving and Fritz’s prior work experiencing also involves receiving fields where accounting was not part of the job.

Objective 2.3 Calculate depreciation and amortization expense using various methods. The third objective was to discuss calculating depreciation and amortization expense using various methods. When calculating the depreciation of a particular asset the value must be allocated over the life of the item in a rational manner. Opposite of asset valuation, this process simply breaks up the cost over the estimated time the item will be useful. This process is very useful, because it lets items break down due to wear and tear (tires) or become obsolete as technology evolves. There are three different acceptable methods to calculate depreciation. Straight-line depreciation simply divides the depreciable cost by the time the item will be useful. The unit of activity method estimates the units that will be used than divides that number from the depreciable cost. The last method used is the declining balance, which takes a constant depreciation rate and multiplies it by the book value that decreases each year. Since amortization deal only with intangible assets, the costs are spread out over the legal life of the asset.
This objective’s topic did not relate to either Fritz or Victoria’s field. Victoria works in retail receiving and Fritz’s prior work experiencing also involves receiving fields where accounting was not part of the job.

References
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2010). Financial accounting. Hoboken, NJ: John Wiley & Sons.