ACC201 Project Summary Report

Tara Bates ACC-201 Project Summary Report August 13, 2023
There is an 8-step process to the accounting cycle. These 8 steps are: Identifying and recording transactions, preparing journal entries, posting to the general ledger, generating unadjusted trial balance report, preparing worksheets, preparing adjusting entries, generating financial statements, and closing the books. The first step in the accounting process is to identify and record transactions through journals. When business events occur or a financial activity, transactions must be recorded in the books while also being included in the financial statements. There are both monthly and annual accounting periods to be recorded. For individual transactions there are three steps to the accounting process which are to identify the transaction, prepare a business document, and identify the relevant account(s). First, we identify the transaction by determining what kind of transaction it may be. Examples would be buying goods from suppliers, selling products to customers, paying employees, and recording the receipt of cash from customers. Second, there is frequently a business document to be prepared or recognized to initiate the transaction, such as an invoice to a customer or an invoice from a supplier. Lastly, every business transaction is recorded in an account in the accounting database, such as a revenue , expense , asset , liability , or stockholders' equity account. We must identify which accounts are to be used to record the individual transaction. A cash position refers specifically to an organization's level of cash relative to its expenses and liabilities . Internal stakeholders look at cash position as frequently as daily, while external investors and analysts look at an organization's cash position on its quarterly cash flow statement. Net Income: $51,565.00 Sales Revenue: 5,525.00 9.33%
Current Assets: $62,295.00 Current Liabilities: $480.00 A current ratio measures the liquidity of the firm. Liquidity is the ability of the firm to meet its short-term obligations as and when they are due such as accounts payable and accrued liabilities A higher current ratio is desirable because it gives good coverage for current liabilities. It is favorable to creditors when current ratio is higher because they get paid on time. Separating duties among different employees is a basic but effective control measure. This means that no single employee should have complete control over financial transactions, from authorization to recording to custody. This segregation of duties helps prevent errors and fraud. To prevent the possibility of committing fraud as a result of one individual doing incompatible activities, the organization must make sure there is division of duties for a straightforward system of internal controls. For instance, the person in charge of registering the transaction shouldn't be the one who accepts consumer checks. If segregation of roles is not appropriate due to the company's small size, the owner should constantly monitor daily activities to ensure that no room is left for fraud to be committed. Establishing that purchases should have a purchase order that has been approved by the appropriate signatory before a purchase is made with a vendor is one of the additional controls for the business adding goods and new assets. Purchases should not be carried out under purchase orders without authorization. Additionally, a receiving report that is reconciled with the purchase order should be generated when orders are received. The four depreciation methods include straight-line, declining balance, sum-of-the-years' digits, and units of production. I am choosing to discuss straight-line depreciation and declining 129.8
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