Homework: Specialize In Accounting
Complete a 2 part homework in which you classify cash inflows and outflows and prepare a cash flow statement.
The balance sheet and income statement do not necessarily show a complete picture of the financial condition of an organization. In most organizations cash is king, and without a sizable amount of cash, an organization can become insolvent (that is, not having enough ready cash to meet its current obligations or purchase merchandise or materials). When this happens, creditors, bankers, and other external stakeholders (people and organizations that have a vested interest in the survival of a business) might become impatient and force the business into bankruptcy.
By successfully completing this homework, you will demonstrate your proficiency in the following course competencies and homework criteria:
1) Competency 1: Define accounting and its application to accounting principles.
• Analyze accounting data to classify cash inflow and outflows.
2) Competency 2: Apply accounting cycle strategies to manage business financial events.
• Apply the appropriate activity for each business transaction.
3) Competency 3: Prepare financial statements from accounting system data.
• Prepare a cash flow statement using appropriate financial data.
Questions to Consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.
o What are six terms that you consider to be associated with the income statement (revenues and expenses)?
o Consider why these items should be included as a revenue or expense in a business organization.
Instructions
This homework includes two parts. Complete both parts using the templates provided. Both templates are linked in the Resources under the Required Resources heading. Submit both completed templates for the homework.
Part I: Types of Cash Inflows and Outflows
You know that the cash flow statement classifies cash receipts and cash payments as operating, investing, and financing activities. Before preparing the cash flow statement, accounting data must be analyzed to locate transactions in both the cash account and other locations. After the transactions have been located, it should be determined whether each one affects operating, investing, or financing cash flow. Last, whether the transaction results in a cash inflow or outflow must be ascertained. Accountants consider this statement to be foundational for a business to continuously operate.
For this part of the homework, use the Homework Template to classify each of the following cash inflows and outflows as operating, investing, or financing activities:
• Sale of a piece of company equipment.
• Sale of common stock.
• Payment to suppliers for merchandise purchased.
• Payment to lenders for interest on note payable.
• Sale of investments in other companies.
• Purchase of land to expand plant size.
• Payment to stockholders as cash dividends.
• Sale of goods or services.
• Payment to employees for wages and salaries.
• Lending of money to other business entities.
• Payment to government for property and income taxes.
• Collection of principal on loans to other entities.
• Interest and dividends received.
• Issue of bonds to support company growth.
• Purchase of investments in debt or equity of other entities.
• Payment to other entities to cover expenses incurred.
• Buyback of company stock from investors.
Part II: Cash Flow Statement Preparation
The cash flow statement is an important, and often overlooked, financial statement. However, it can provide important data for use by internal organization management. By analyzing the balance sheet and income statement, the accountant can then prepare the statement and share the results with both internal and external users.
Format your homework according to the give formatting requirements:
• The answer must be using Times New Roman font (size 12), double spaced, typed, with one-inch margins on all sides.
• The response also includes a cover page containing the student's name, the title of the homework, the course title, and the date. The cover page is not included in the required page length.
• Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
Attachment:- Template.rar