Accrual and Cash Accounting Beverly Clarkson September 19‚ 2014 XACC/290 Principles of Accounting Terri O’Neill-Martin Accrual and Cash Accounting These are two methods of keeping track of income and expenses in a business‚ (accrual and cash accounting). Accrual and cash accounting difference
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CROSBY CORPORATION Statement of Cash Flows For the Year Ended December 31‚ 2008 Cash flows from operating activities: Net income (earnings after taxes)…………………………………… 160‚000 Adjustments to determine cash flow from operating activities: Add back depreciation…………………………………………….. $150‚000 Increase in accounts receivable…………………….…………… (50‚000) Increase in inventory………………………………………………. (20‚000) Decrease in prepaid expenses…………………………………
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Cash Flow Preparation 27. Crosby Corporation Statement of Cash Flows For the Year Ended December 31‚ 2008 Cash Flow from Operating Activities: Net Income (Earnings after Taxes) $160‚000 Adjustments to determine cash flow from operating activities: Add back depreciation 150‚000 Increase in accounts receivables
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Statement of Cash Flows What is the purpose of the statement of cash flows? What information does it provide? Explain why statements of cash flows are important when assessing the financial strength of an organization. The following paper will discuss the purpose of the statements of cash flows and will analyze the importance of the information when assessing an organization’s financial strength. An organization needs to rely in different approaches to analyze performance and data to manage the
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Cash vs. Credit Cards Brenda Hurtado ENG/130 October 15‚ 2014 James Iddings Cash vs. Credit Cards Which option is better for you? Caring around a credit card or having cash in your pockets? Each option is different for every person. Cash is better for people who do not know how to limit what they spend. Credit cards are for people who know to limit their spending. Because when it comes using cash‚ you do not have to worry about debt. Until you lose your cash‚ it is lost forever. But‚ if you have
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Six Scenarios Assignment Evaluate 6.1 1. Jack Nietzche Should you tell Jack that he isn’t going to be promoted? What should you say if he asks about whether the new assignments were made? Position-Related Currencies is definitely what has influenced Jack to work as hard as he has to ensure the segments of the project were completed on time (Larson & Gray‚ 2010‚ pg. 364). The fact that the promotion is no longer probable will be detrimental to Jack’s performance since he can be pretty emotional
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Control of Cash Receipts Internal control of cash receipts ensures that cash received is properly recorded and deposited. Cash receipts can arise from transactions such as collections of customer accounts‚ receipts of interest earned‚ bank loans‚ sales of assets‚ and owner investments. The two important types of cash receipts are: Over-the-Counter Cash Receipts For purposes of internal control‚ over-the-counter cash receipts from sales should be recorded on a cash register at the time of each
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of Internal Control to Cash Receipts ---Cash receipts may result from cash sales; collections on account from customers; the receipt of interest‚ rents‚ and dividends; investments by owners; bank loans; and proceeds from the sale of noncurrent assets. ---The following internal control principles explained earlier apply to cash receipts transactions as shown: Establishment of responsibility - Only designated personnel (cashiers) are authorized to handle cash receipts. Segregation
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Control of Cash Disbursements Control of cash disbursements is important for companies as most large thefts occur from payment of fictitious invoices. One key to controlling cash disbursements is to require all expenditures to be made by check. The only exception is small payments made from petty cash. Another key is to deny access to the accounting records to anyone other than the owner who has the authority to sign checks. A small business owner often signs checks and knows from personal contact
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Projecting Cash Flow Projecting cash flow is a vital aspect of managing a business. Cash flow covers expenses‚ which is why start-ups often seek financing or loans--to provide a base of capital to fund the business while waiting for cash flow. Here is how to project your cash flow. Estimating the incremental cash flow requires from the investment itself‚ acquiring and disposing of the investment’s assets and the cash flows from the operating the investment. Those affected by the revenues‚ expenditures
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