North American Trade Schools Accounting Methods BizCon Memo Assignment Steps Scenario: BizCon, a consulting firm, has just completed its first year of ope

North American Trade Schools Accounting Methods BizCon Memo 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 between 500 and 700 words including the following information to better outline the situation:

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

Please make sure to follow APA guidelines and Intellectual property is recognized with in-text citations and a reference pageAlso, please make sure to include Introduction, conclusion and reference page (Not to be part of the word count for the memo.