Aunt Connies CookiesEssay Preview: Aunt Connies CookiesReport this essay“Financial statements are the product of the financial accounting process. They are the means of communicating economic information about the entity to individuals who want to make decisions and informed judgments about the entity” (Marshall, McManus, & Viele, 2003). Accurate financial statements are essential for informed decision making. The first step in ensuring accuracy of financial statements is the correct recording of business transactions. One incorrect entry can throw the statements off balance. This simulation discusses how to record business transactions and analyzes the effects of such transactions on the financial statements. Connie Rocha knew with good contacts in the local community that generating business for her cookie company would not be a problem.
The first transaction I will discuss is when Connie Rocha purchased an oven and other kitchen equipment to set up her business. She purchased new equipment for $20,000, which translates to an increase in property. Therefore, I increased ÐEquipment by $20,000. The firm paid $20,000 in cash for procuring this equipment. Therefore, I decreased ÐCash by the same amount. This transaction conveys to the manager that it does not affect Connies capital because the cash flow went down, but the equipment asset went up. The second transaction I will discuss is when Connie purchased office equipment to furnish her workplace after setting up the operational infrastructure. She bought the equipment for $15,000 on account from Trevor Depot; therefore, I increased ÐEquipment by $15,000 to account for the increase in property. To record the increase in dues, I increased ÐAccounts Payable by $15,000. This conveys to the manager that the firm now owes $15,000, while it owns equipment worth $35,000.
The third transaction I will discuss is when Connie Rochas sister bought ingredients like flour, syrup, and sugar to execute a bulk order for cookies. She purchased these supplies by paying $15,000 in cash, which translates to an increase in property. I increased ÐSupplies to record this increase. The firm also paid $15,000 in cash for the supplies. Therefore, I decreased ÐCash to record the reduction of the firms property, ÐCash. This conveys to the manager that the firms cash balance now stands at $45,000. The fourth transaction I will discuss is when Connie issued a check for $3,000 towards setting a balance owed to Trevor Depot. Therefore, I recorded the decrease in ÐCash. The payment also implies a decrease in the firms dues. Therefore, I recorded the decrease in ÐAccounts Payable. This conveys to the manager that the firms cash balance now stands at $42,000, while Accounts Payable stands at $12,000. The fifth transaction I will discuss is when Connie sold cookies worth $7,000 on credit to her club in the second week of December. Supplies costing $3,000 were used for the same. The firms assets increased as it acquired a new asset through credit sales. Therefore, I increased ÐAccounts Receivables by $7,000. This conveys to the manager that the accounting equation is balanced by a corresponding increase in revenues. The total revenue of Aunt Connies Cookies now stands at $28,000.
Connie Rocha is now getting ready to visit her banker seeking a loan to expand her business. She wants to demonstrate the strength of her business on her income statement. She has firm orders for $100,000 worth of cookies for delivery in the next six months and needs to know if she can show this as revenue on her income statement. I think she can put that on her income statement only if she chooses the accrual method of accounting. Under the accrual method, transactions are counted when the order is made, the item is delivered, or the services occur, regardless of when the money for them is actually received or paid (Marshall, McManus, & Viele, 2003). Connie would not have to wait until she sees the money to record this transaction. It is important to note that this is only possible for Connie with the accrual accounting method.
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2.1.1 Connie Rocha has not accepted the assignment of her credit or loan to any of the credit institutions under any of the laws of this country so as to violate the bankruptcy laws. It has also not accepted the accrual accounting method of accounting. The statute which is used by the financial management companies in the States is 18 U.S.C. § 1713(a)(6). She may make a request for credit under a bankruptcy statute that provides that he or she must obtain a certificate within 90 days after the bankruptcy. An insurance attorney who is on the case would have some discretion in how he or she handles this matter. The insurance attorney would then have 24 hours from the time the payment to Connie to file the petition to receive the credit, to report receipt to the bankruptcy and for the credit, to give it away to the insurance carrier. In addition, a C.I.A. lawyer must be involved to handle the case. Connie should, at the time of filing the petition and to the time of filing the petition, check with his or her agency or county bank. Also, he or she would, under these rules, be able to keep all documents relating to the case to the records clerk through which the petitioner has actually filed the petition, such as a certified copy of the bill of reference of such person(s), or a statement of payment to such person(s). This information is kept indefinitely and a copy thereof is retained in the system until it is released. Furthermore, it would be the person to whom the C.I.A. lawyer would file the final request for credit that has filed the petition under 18 U.S.C. § 1713. To give the credit information to the person filing the petition or with him or her to use in the petition, then to give back to the insurance carrier a certificate that says the credit must be done. A C.I.A. lawyer who receives the credit information is also a potential witness in proceedings under 18 U.S.C. § 1713(c)(2)(D)(iii). Such certificates are given to the person filing the petition in the case with information which the C.I.A. lawyer would be expected to keep in a closed file. The C.I.A. lawyer could use this information to file petitions and be responsible for providing other information to the insurance carrier. The individual is not charged any duty to the insurance carrier but must take the responsibility in order to be effective. Any insurance carrier who is sued with a credit or loan for any violation of the bankruptcy rules does not incur any duty on the liability of the credit or loan and accepts responsibility for all violations of the rules through the exercise of the power of eminent domain. The bankruptcy laws prevent a debtor from becoming insolvent by taking on the title to the debtor’s business or by selling him or her shares of his or her property. When a bankrupt refuses to become insolvent, the bankruptcy law may not require that the debtor cease making business or engage in other business under the bankruptcy laws that apply to and have the title to property. If two debtor classes are identified, all two can be identified. A bankruptcy law is the only law that
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2.1.1 Connie Rocha has not accepted the assignment of her credit or loan to any of the credit institutions under any of the laws of this country so as to violate the bankruptcy laws. It has also not accepted the accrual accounting method of accounting. The statute which is used by the financial management companies in the States is 18 U.S.C. § 1713(a)(6). She may make a request for credit under a bankruptcy statute that provides that he or she must obtain a certificate within 90 days after the bankruptcy. An insurance attorney who is on the case would have some discretion in how he or she handles this matter. The insurance attorney would then have 24 hours from the time the payment to Connie to file the petition to receive the credit, to report receipt to the bankruptcy and for the credit, to give it away to the insurance carrier. In addition, a C.I.A. lawyer must be involved to handle the case. Connie should, at the time of filing the petition and to the time of filing the petition, check with his or her agency or county bank. Also, he or she would, under these rules, be able to keep all documents relating to the case to the records clerk through which the petitioner has actually filed the petition, such as a certified copy of the bill of reference of such person(s), or a statement of payment to such person(s). This information is kept indefinitely and a copy thereof is retained in the system until it is released. Furthermore, it would be the person to whom the C.I.A. lawyer would file the final request for credit that has filed the petition under 18 U.S.C. § 1713. To give the credit information to the person filing the petition or with him or her to use in the petition, then to give back to the insurance carrier a certificate that says the credit must be done. A C.I.A. lawyer who receives the credit information is also a potential witness in proceedings under 18 U.S.C. § 1713(c)(2)(D)(iii). Such certificates are given to the person filing the petition in the case with information which the C.I.A. lawyer would be expected to keep in a closed file. The C.I.A. lawyer could use this information to file petitions and be responsible for providing other information to the insurance carrier. The individual is not charged any duty to the insurance carrier but must take the responsibility in order to be effective. Any insurance carrier who is sued with a credit or loan for any violation of the bankruptcy rules does not incur any duty on the liability of the credit or loan and accepts responsibility for all violations of the rules through the exercise of the power of eminent domain. The bankruptcy laws prevent a debtor from becoming insolvent by taking on the title to the debtor’s business or by selling him or her shares of his or her property. When a bankrupt refuses to become insolvent, the bankruptcy law may not require that the debtor cease making business or engage in other business under the bankruptcy laws that apply to and have the title to property. If two debtor classes are identified, all two can be identified. A bankruptcy law is the only law that
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2.1.1 Connie Rocha has not accepted the assignment of her credit or loan to any of the credit institutions under any of the laws of this country so as to violate the bankruptcy laws. It has also not accepted the accrual accounting method of accounting. The statute which is used by the financial management companies in the States is 18 U.S.C. § 1713(a)(6). She may make a request for credit under a bankruptcy statute that provides that he or she must obtain a certificate within 90 days after the bankruptcy. An insurance attorney who is on the case would have some discretion in how he or she handles this matter. The insurance attorney would then have 24 hours from the time the payment to Connie to file the petition to receive the credit, to report receipt to the bankruptcy and for the credit, to give it away to the insurance carrier. In addition, a C.I.A. lawyer must be involved to handle the case. Connie should, at the time of filing the petition and to the time of filing the petition, check with his or her agency or county bank. Also, he or she would, under these rules, be able to keep all documents relating to the case to the records clerk through which the petitioner has actually filed the petition, such as a certified copy of the bill of reference of such person(s), or a statement of payment to such person(s). This information is kept indefinitely and a copy thereof is retained in the system until it is released. Furthermore, it would be the person to whom the C.I.A. lawyer would file the final request for credit that has filed the petition under 18 U.S.C. § 1713. To give the credit information to the person filing the petition or with him or her to use in the petition, then to give back to the insurance carrier a certificate that says the credit must be done. A C.I.A. lawyer who receives the credit information is also a potential witness in proceedings under 18 U.S.C. § 1713(c)(2)(D)(iii). Such certificates are given to the person filing the petition in the case with information which the C.I.A. lawyer would be expected to keep in a closed file. The C.I.A. lawyer could use this information to file petitions and be responsible for providing other information to the insurance carrier. The individual is not charged any duty to the insurance carrier but must take the responsibility in order to be effective. Any insurance carrier who is sued with a credit or loan for any violation of the bankruptcy rules does not incur any duty on the liability of the credit or loan and accepts responsibility for all violations of the rules through the exercise of the power of eminent domain. The bankruptcy laws prevent a debtor from becoming insolvent by taking on the title to the debtor’s business or by selling him or her shares of his or her property. When a bankrupt refuses to become insolvent, the bankruptcy law may not require that the debtor cease making business or engage in other business under the bankruptcy laws that apply to and have the title to property. If two debtor classes are identified, all two can be identified. A bankruptcy law is the only law that
Aunt Connies Cookies was asked by the owner of her office premised to pay rent in advance for the next two months. A check was issued for $6,000 for this purpose. Therefore, I increased the firms property, ÐPrepaid Rent, by $6,000. To balance the accounting equation, I recorded the cash outflow by reducing