You are an accountant in a medium sized manufacturing company. You have been asked to mentor an accounting clerk who is new to your accounting department.
The Accounting Cycle
To organize a business, you would need an attorney, a banker, a business plan, a
budget, capital funds, an idea, and a research project. The United States Small Business
Administration (SBA) website gives a lot of details about starting a business and how
to finance the venture.
The basic accounting equation is Assets = Liabilities + Owner’s Equity.
Assets are property, plant, and equipment owned by the business. Assets include cash,
accounts receivable, notes receivable, equipment, inventory, buildings, land, patents,
and goodwill.
Liabilities are debts owed by the business that are waiting to be paid. Liabilities
include accounts payable, notes payable, mortgages payable, wages payable, taxes
payable, and all other payables.
Owner’s equity is the ownership of the business. Owner’s equity is everything
contributed by the owner or owners of the business. Owner’s equity looks different for
sole proprietors and partners accounts than it does for corporations, but both types of
accounts include retained earnings.
Sole proprietors and partners accounts are the same. They list the name of each owner,
any capital, and the name of each owner’s drawing account.
Corporations have categories of stock instead of the individual names of owners, and
Assignment Type: Individual Project Deliverable Length: 3 pages ?Points Possible: 125 Due Date: 2/23/2013 11:59:59 PM CT ?? You are an accountant in a medium sized manufacturing company. You have been asked to mentor an accounting clerk who is new to your accounting department. Explain why adjusting entries are necessary. Describe the 4 types of adjusting entries, and provide a manufacturing industry example of each. Describe how these entries would be recorded in a computerized accounting system. Describe 1 ethical issue that could result from the preparation of these manufacturing entries. The Accounting Cycle To organize a business, you would need an attorney, a banker, a business plan, a budget, capital funds, an idea, and a research project. The United States Small Business Administration (SBA) website gives a lot of details about starting a business and how to finance the venture. The basic accounting equation is Assets = Liabilities + Owner’s Equity. Assets are property, plant, and equipment owned by the business. Assets include cash, accounts receivable, notes receivable, equipment, inventory, buildings, land, patents, and goodwill. Liabilities are debts owed by the business that are waiting to be paid. Liabilities include accounts payable, notes payable, mortgages payable, wages payable, taxes payable, and all other payables. Owner’s equity is the ownership of the business. Owner’s equity is everything contributed by the owner or owners of the business. Owner’s equity looks different for sole proprietors and partners accounts than it does for corporations, but both types of accounts include retained earnings. Sole proprietors and partners accounts are the same. They list the name of each owner, any capital, and the name of each owner’s drawing account. Corporations have categories of stock instead of the individual names of owners, and there are no drawing accounts for stockholders. If stockholders want to make a withdrawal,…
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