Problem
Select one of the prompts below
I. Think about a recent purchase you made. Describe what financial and nonfinancial factors went into that purchase. Rank the factors, and explain how you made the final decision to purchase the item.
II. Assume you are considering opening a retail business. You are trying to decide whether to have a traditional "brick-and-mortar" store or to sell only online. Explain how the activities and costs differ between these two retail arrangements.
• Uber and Lyft are two popular ride-sharing services. Imagine that you are visiting New York City for a family vacation. You are trying to decide whether to use one of these ride-sharing services to get around the city or rent a car and drive yourself. Considering the perspectives of the passengers (your family), the drivers, and the company (Uber or Lyft), explain the following:
1. why ride-sharing services have gained in popularity
2. the financial considerations relevant to your decision
3. the non-financial considerations relevant to your decision
• Imagine that you have just been elected president of your university's student senate. Assume the university is considering constructing a new student union-a place that offers a variety of stores, restaurants, and entertainment options for students-and has asked the student senate to develop a formal position in support or opposition of the new student union.
1. Identify the stakeholders involved in this decision. Discuss the relevant considerations that each stakeholder might have.
2. Discuss the financial information that might be helpful in formulating the student senate position.
3. Discuss the non-financial information that might be helpful in formulating the student senate position.
A. Does every transaction affect both sides of the accounting equation? Explain your answer.
B. Is it still necessary to record a transaction if it has no net effect on the accounting equation? Explain your answer.
C. Explain normal balances. Give three examples of accounts that will normally have a debit balance and three accounts that will normally have a credit balance.
D. Answer the following questions about the trial balance: What is the purpose of it? What is its primary use?
E. Describe the revenue recognition principle. Give specifics.
F. Describe the expense recognition principle (matching principle). Give specifics.
G. What parts of the accounting cycle require analytical processes, rather than methodical processes? Explain.
H. Are there any accounts that would never have an adjusting entry? Explain.
I. Which of the basic financial statements can be directly tied to the post-closing trial balance? Why is this so?
J. Describe the calculation required to compute working capital. Explain the significance.
K. Describe the calculation required to compute the current ratio. Explain the significance.