investor confidence would be lost‚ which would cause the economy to deteriorate. The purpose of the Sarbanes-Oxley Act is to reduce the probability of additional corporate scandal by eliminating dishonest corporate conduct. (Weygandt‚ Kimmel‚ & Kieso‚ 2009). The intended goals of The Sarbanes-Oxley Act are to improve the separation of duties of auditors‚ ensure accuracy of the auditing profession by instituting ethical principles to follow‚ and to enhance the system of governing corporate accounting
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total cash received from customers. The Financial Accounting Standards Board allows both statements of cash flow preparation methods because the purpose is to show the cash inflows and outflows from each activity. According to Weygandt‚ Kimmel‚ and Kieso (2010)‚ the direct method shows operating cash receipts and payments‚ making it more consistent with the objective of a statement of cash flows. The FASB has expressed a preference for the direct method‚ but allows the use of either method. (Financial
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References: Kimmel‚ P.‚ Weygandt‚ J.‚ & Kieso‚ D. (2009). Accounting: Tools for business decision making (3rd Ed.). Hoboken‚ NJ: John Wiley & Sons. Tootsie Roll Industries. (2011). Tootsie Roll Industries Annual Report 2010. Retrieved from http://www.tootsie.com/ financial/fin_203.pdf
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important to companies because they help to pay ongoing expenses that the company incurs. Examples of current assets include cash‚ cash equivalents‚ prepaid expenses‚ short-term investments‚ inventory‚ and accounts receivable (Kimmel‚ Weygandt‚ & Kieso‚ 2007). Cash equivalents are a very important current asset because they are readily convertible to cash and close to their maturity date so that their market value cannot change. Personal current assets are somewhat similar. These assets are the
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their dividends until preferred stockholders receive their 5.00. Cumulative dividend is also a feature which means that preferred stockholders “receive current and any unpaid prior year dividends before common stockholders.”(Kimmel‚ Weygandt‚ & Kieso‚ 2010‚). The other feature is Liquidation preference which means if the company goes under then preferred stockholders have a security provision helping them to still earn money on their investment. Preferred stock versus common stock is really
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accounting data fall into two categories: internal users‚ and external users. Internal users of accounting data are actually employed within the business‚ and use the data to “plan‚ organize‚ and run [the] business” (Kimmel‚ Weygandt‚ & Kieso‚ 2011‚ p.5). Most‚ if not all‚ departments in a business use the data to make daily‚ short term‚ and long term goals and decisions for their area within the company. A finance officer‚ for example‚ will use information about the company’s cash standing
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Chapter 13: Problem BYP 13-4 INTERPRETING FINANCIAL STATEMENTS BYP13-4 The Coca-Cola Company and PepsiCo‚ Inc. provide refreshments to every corner of the world. Selected data from the 2004 consolidated financial statements for the Coca-Cola Company and for PepsiCo‚ Inc.‚ are presented here (in millions). Coca-Cola PepsiCo Total current assets 12‚094 8‚639 Total current liabilities 10‚971 6‚752 Net sales 21‚962 29‚261 Cost of goods sold 7‚638
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References: Kimmel‚ P. D.‚ Weygandt‚ J. J.‚ & Kieso‚ D. E. (2011). Accounting: Tools for business decision making (4th ed.). NJ: John Wiley & Sons. De Vay‚ D.L. (2006). The Effectiveness of the Sarbanes-Oxley Act of 2002 in Preventing and Detecting Fraud in Financial Statements (1st ed.). Dissertation
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Full Disclosure Paper: Starbucks This paper will discuss the disclosures contained in Starbucks’ financial Statements that are related to cash and cash equivalents‚ receivables‚ and inventories. This paper will identify the components of their cash and cash equivalents. The original name of the company was Starbucks Coffee‚ Tea and Spices which later on was changed to Starbucks Coffee Company. Starbuck was staring in 1971; they were located at Seattle’s Pike Place Market. Starbucks is
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capitalization. Under US GAAP‚ all research and development is expensed once it happens. Under IFRS‚ development is capitalized. Also‚ according to Intermediate Accounting‚ “IFRS permits some capitalization of internally generated intangible assets” (Kieso‚ 712)‚ while “GAAP requires expensing of all costs associated with [them]” (712). Permissibility of capitalization leads to important advantages and disadvantages. Theoretically‚ IFRS capitalization is advantageous because the specific intangibles
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