ACC561 Cash and Accrual Accounting Methods Report Purpose of Assignment  This week’s activity illustrates the role a company’s accounting method plays in

ACC561 Cash and Accrual Accounting Methods Report 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 occurring in a business setting and determine how to properly analyze those events to identify the impact on both cash and accrual accounting methods. 

Resources 

o Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Commission (SEC)

* Grading guide (attached)

o Tutorial help on Excel and Word functions can be found on the Microsoft Office website. There are also additional tutorials via the web offering support for Office products. 

Assignment Steps

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. 

Prepare

The memo in a maximum 700 words including the following information to better outline the situation:

o Explain how cash and accrual accounting differs for each of the events listed in the above scenario and describe the proper accrual accounting.

o Assess how at the end of the year, BizCon reported a favorable net income, yet the company’s management is concerned because the company is very short of cash. Explain to management how BizCon could have positive net income and yet run out of cash. Individual Assignment: Accounting Methods
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 that occur in a business setting and determine how to properly
analyze those events to identify the impact on both cash and accrual accounting methods.
Resources Required
Generally Accepted Accounting Principles (GAAP)
U.S. Securities and Exchange Commission (SEC)
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also
additional tutorials via the web offering support for Office products.
Grading Guide
Content
Met
Partially
Met
Not Met
Total
Available
Total
Earned
85
#/85
Partially
Met
Not Met
Comments:
Explained how cash and accrual accounting
differs for each of the events listed in the
scenario and describe the proper accrual
accounting.
Assessed how at the end of the year, BizCon
reported a favorable net income, yet the
company’s management is concerned
because the company is very short of cash.
Explained to management how BizCon could
have positive net income and yet run out of
cash.
The memo is a maximum 700 words in
length.
Writing Guidelines
The paper—including tables and graphs,
headings, title page, and reference page—is
consistent with APA formatting guidelines and
meets course-level requirements.
Met
Comments:
Accounting Methods Grading
Guide ACC/561 Version 7
Writing Guidelines
Met
Partially
Met
Not Met
Total
Available
Total
Earned
35
#/35
120
#/120
Intellectual property is recognized with in-text
citations and a reference page.
Paragraph and sentence transitions are
present, logical, and maintain the flow
throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed
including spelling and punctuation.
Assignment Total
Additional comments:
#
Comments:
2

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