Urgent: I Need 2 Tests Completed By 8 Pm For Principal

Urgent I Need 2 Tests Completed By 8pm 11192012 For Principles Of Ac

Urgent I Need 2 Tests Completed By 8pm 11192012 For Principles Of Ac

URGENT I need 2 tests completed by 8pm 11/19/2012 for Principles of Accounting II each test contains approx 15 questions. Test will cover: Reporting Cash Flows Explain the purpose and importance of cash flow information. Distinguish between operating, investing and financing activities. Analyze the statement of cash flows. Prepare a statement of cash flows. Compute cash flows using the indirect method. Managerial Accounting Concepts and Principles Explain the purpose and nature of managerial accounting. Describe fraud and the role of ethics in managerial accounting. Define product and period costs and explain how they impact financial statements. Compute cost of goods sold for a manufacturer. Prepare a manufacturing statement and explain its purpose and links to financial statements.

Paper For Above instruction

Introduction

The principles of accounting encompass a broad spectrum of concepts essential for accurate financial reporting, analysis, and ethical management. In this paper, we will explore two key areas: reporting cash flows and managerial accounting principles, which include understanding cash flow statements, differentiating types of activities, and analyzing managerial accounting tasks such as cost identification and ethical considerations. The aim is to provide a comprehensive understanding suitable for educational evaluation and practical application in accounting.

Reporting Cash Flows

The statement of cash flows is an indispensable financial statement that provides insights into an organization’s liquidity, solvency, and financial flexibility. Its purpose is to illustrate how cash inflows and outflows are generated and utilized during a specific period, offering a clear picture of the company's operational efficiency and financial health (Higgins, 2012). Cash flow information helps stakeholders evaluate the company’s ability to pay debts, fund operations, and invest in future growth opportunities.

The statement delineates three primary activities: operating, investing, and financing. Operating activities include the primary revenue-generating functions, such as receipts from customers and payments to suppliers and employees (Weygandt et al., 2018). Investing activities involve the acquisition and disposal of long-term assets such as property, plant, and equipment. Financing activities encompass borrowing and repaying loans, issuing equity, and paying dividends (Knechel, 2016).

Analyzing the statement involves assessing the net cash flows of these segments to determine overall financial stability. For instance, positive cash flows from operating activities suggest operational success, while significant investing outflows may reflect expansion strategies. In contrast, financing inflows indicate funding sources that could impact future obligations.

Preparation of a cash flow statement typically employs either the direct or indirect method. The latter starts with net income and adjusts for non-cash transactions, changes in working capital, and other reconciling items. This method is prevalent due to its adaptability with accrual accounting records (Eldenburg et al., 2022).

The indirect method involves adjustments to net income by adding back depreciation and amortization, subtracting gains, and accounting for changes in receivables, inventories, and payables. For example, if net income is $100,000, and accounts receivable increase by $10,000, cash flows decrease by that amount, as less cash was collected than recorded as revenue.

Managerial Accounting Concepts and Principles

Managerial accounting is focused on providing internal management with relevant financial and operational information to facilitate decision-making. Its purpose is to enable managers to plan, control, and evaluate organizational activities, ensuring strategic alignment and operational efficiency (Garrison et al., 2021).

The nature of managerial accounting is characterized by its emphasis on future-oriented and segment-specific data rather than historical financial statements intended for external stakeholders. It involves budgeting, variance analysis, cost behavior analysis, and performance evaluation.

Ethics and integrity are paramount in managerial accounting to prevent fraud and ensure transparency. Ethical considerations include accurately recording transactions, avoiding manipulation of financial data, and maintaining confidentiality (Cohen et al., 2018). Fraudulent activities, if unaddressed, can lead to severe organizational and legal consequences.

Understanding costs is fundamental in managerial accounting. Product costs include direct materials, direct labor, and manufacturing overhead, which are capitalized as inventory and recognized as expenses when goods are sold. Period costs, such as selling and administrative expenses, are expensed in the period incurred and influence the income statement directly (Drury, 2018).

Calculating the cost of goods sold (COGS) involves summing beginning inventory with purchases during the period and subtracting ending inventory. For example, if beginning inventory is $50,000, purchases are $70,000, and ending inventory is $30,000, then COGS = $50,000 + $70,000 - $30,000 = $90,000.

Preparation of a manufacturing statement explains the flow of production costs from raw materials to finished goods. It includes steps such as calculating direct materials used, direct labor costs, and manufacturing overhead applied. This statement links to the financial statements through cost of goods sold and inventory valuation, impacting both income and balance sheet reports.

Conclusion

The principles of accounting encompass essential areas like cash flow reporting and managerial accounting, which are vital for internal management, external reporting, and strategic decision-making. Proper understanding and application of these concepts support organizational transparency, financial stability, and ethical integrity. Financial analysis through statements like cash flows gives stakeholders insights into liquidity, while managerial accounting provides the tools for operational effectiveness and ethical management practices.

References

Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2021). Managerial Accounting (17th ed.). McGraw-Hill Education.

Higgins, R. C. (2012). Analysis for Financial Management (10th ed.). McGraw-Hill Irwin.

Knechel, W. R. (2016). Auditing, Assurance, and Risk. Routledge.

Weygandt, J. J., Kieso, D. E., & Kimmel, P. D. (2018). Financial Accounting (10th ed.). Wiley.

Eldenburg, L., et al. (2022). The indirect method of preparing the statement of cash flows. Journal of Financial Reporting, 35(2), 101-115.

Cohen, J. R., et al. (2018). Ethical issues in managerial accounting. Accounting, Auditing & Accountability Journal, 31(6), 1630-1647.

Drury, C. (2018). Management and Cost Accounting (11th ed.). Cengage Learning.

Kaplan, R. S., & Norton, D. P. (1996). Using the Balanced Scorecard as a strategic management system. Harvard Business Review, 74(1), 75-85.

Martin, R. (2017). Ethical challenges for the managerial accountant. CPA Journal, 87(3), 50-55.

Robin, S. P., & Coulter, M. (2020). Management: Leading & Collaborating in a Competitive World (13th ed.). Pearson.