ACCT 301 – Weekly Homework
The primary reading material source is http://www.principlesofaccounting.com/.
(For additional information, use the OpenStax textbook available within LEO as a secondary resource.)
SCENARIO: You are a new hire for a major corporation completing your eight-week rotation related to accounting, financial reporting, budgeting, cost control, and profit maximization. As part of your rotation, you are learning about the accounting process and how to use accounting information to make managerial decisions.
Read the assigned chapters to learn the accounting concepts, then submit a written report in the LEO assignment folder summarizing your knowledge of the week’s concepts. You should create this report to provide documentation/evidence of your assigned chapter readings and self-assessment exercises (Fill in the Blanks and Multiple Choice questions at the end of each chapter). (A series of projects focused on your SEC10K corporation will be completed and submitted separately.)
REQUIREMENT: As described above, upon completing the readings and quizzes (the week’s assigned chapters are detailed below), write a report as a Word document and upload it to this week’s Homework assignment folder. Summarize what you learned through your readings and practice quizzes. Demonstrate an understanding of the week’s concepts. The more detailed write-ups documenting a solid understanding of the material will earn the highest homework points.
A. Read and complete the self-graded questions for ch 4, 5, & 6 at PoA. (http://www.principlesofaccounting.com/ ).
B. Review your SEC 10-K company’s balance sheet (statement of position) and income statement (statement of earnings). Your SEC 10-K company should have inventory on the Balance Sheet and the Cost of Goods Sold reported on the Income Statement.
Two transactions occur each time inventory is sold: revenues (sales) are recorded, and inventory is used up to become an expense. This means two journal entries are recorded:
DR Cash (or accounts receivable if on account) CR Sales
(to record sales revenues earned)
DR Cost of Goods Sold CR Inventory
(To record inventory becoming the expense of the sale)
Consider the impact of recording these two transactions. What key profit factor do you learn from this journal entry? What does recording this transaction tell you about the gross profit on each sale? Does this gross profit indicate overall profitability? (Hint: is the cost of selling inventory the only expense incurred during routine operations?)
Provide a summary of the accounting concepts learned through this week’s readings and practice quizzes. Demonstrate your understanding of the week’s concepts. The more detailed your write-up documenting your understanding, the higher it will be graded. (See Rubric for details.)
After addressing the above topics, additional topics you can incorporate into your weekly homework assignment: Why do companies go through a closing process? What accounts are closed in that process? Are they closed and ‘erased’ from the accounting system? Discuss the additional accounting issues faced by merchandisers/retailers that service companies do not address. What does a system of internal controls achieve? (You can apply this to internal controls over cash or a general discussion of internal controls.) What topic(s) gave you trouble this week (if any)?/What topic(s) do you feel you were able to grasp? Post questions in the homework discussion thread!