AC 298Unit 6 Seminar Professor Kris Friestad
In Unit 6 we will… • Develop solutions to various accounting business demands (AASBAA-5) • Review financial statements • Make corrections for errors
Unit 6 Project You have accepted a job as the controller of a start-up company's consulting firm, called Sheila Shaw Consulting. Sheila is an excellent consultant, but not a good accountant. She has attempted to prepare the first month's financial statements, however, the statements do not balance. Her financial statements are a good starting point, but your job is to correct the errors. The statements are presented here. (on the following slides)
Unit 6 Project Sheila is grateful to have you on board as her controller, and you are eager to make a good impression on her by finding the errors in her statements. Download Sheila's statements and make the changes to them. All the information you need to find the errors is contained in these statements.
Unit 6 Project • Hint: • There are 2 errors in the Balance Sheet • 1 error in the Income Statement • 1 error in the Statement of Owner's Equity • 2 errors in the Statement of Cash Flows. • You will want to keep in mind all that you have learned in terms of the items on financial statements which are duplicated and flow from one statement to another.
Assignment Checklist • Report 2 balance sheet errors • Produces 1 statement of owner’s equity errors • Report 2 errors on the statement of cash • Prepare corrected financial statements
Review Income Statement • Starts with? • What items are included? • How do we calculate net income? Net loss? • Which financial statement does the net income “flow to”? • Other important information?
Review Statement of Owner’s Equity • What information is in the title? • What other items are included? • What information is needed for other statements? • Other important information?
Review Balance Sheet • What’s unique about the title? • Which accounts are represented? • Which form do we use? Account form? Report form? • Other important information?
Review Statement of Cash Flows • Does it have a title? • How many sections? What are they? • What do we record in each section? • The ending cash balance should match what? • Other important information?
Suggestions for Sheila • How can she use her financial information to make decisions for her company? • Should she expand her business? • If she wanted to expand, what information might she need for lenders? • Other ideas?
Suggestions for Sheila • Are the calculations done correctly? • Are account amounts recorded correctly? • Has information been transferred properly? • Are increases and decreases done correctly? • Are all accounts recorded under the proper heading?
You the Accountant… • How does this situation apply to you… • Right now? • In the future? • Is this a REAL scenario for accountants? • Also feel free to share any personal experiences
Tim’s Coffee Shop • Have you reviewed any financial statements for the coffee shop? • Is the information accurate? • How do you know? • What can you check? • Are there missing pieces?
Tim’s Coffee Shop • How does this affect Mike’s decisions to: • Expand the business • Make changes • What suggestions for improvement can you make to Mike?
Unit 6 Project • Due: TUESDAY at 11:59 PM ET • Before you submit: • Spelling and grammar checked? • Correct APA format used? • Cover page • Spacing • Page #s • Reference page • These are just a few items to check! :)