Argosy University
COURSE SYLLABUS
ACC201
Principles of Accounting
Faculty Information
Faculty Name: Jong H. Lee
Campus: San Francisco Bay Area
Contact Information: (510) 435-7383
Office Hours:
Short Faculty Bio: DBA, Argosy University; MBA, Golden Gate University; BA, Sonoma State University. California CPA
Course description: This course provides an introduction to the preparation and use of accounting principles. Emphasis is on basic accounting procedures,
measurement of income and expense, working capital, and investments. Includes material on corporations, capital budgeting, and interpretation of financial
statements.
Course Pre-requisites: None
Required Textbook:
Warren, Reeve, & Duchac. (2007). Accounting. Thomson/South-Western. ISBN: 0324-38187-5
Optional but recommended:
Gleim’s Online Financial Accounting Made Easy http://www.gleim.com/account/
Technology: Pentium III CPU/ Windows 98; 128MB RAM, printer; Microsoft Office Acrobat (full version), Microsoft Internet Explorer 5.5 (PC) 5.0 (MAC) or
Netscape Navigator 4.08. Norton Antivirus.
Course length: 7.5 Weeks
Contact Hours: 45 Hours
Page 1
Credit Value: 3.0
Program Outcomes:
1.
2.
3.
4.
5.
Communication
1.1 Communicate business concepts effectively, both written and orally appropriate to the audience
Team
2.1 Define the attributes of an effective team member and leader and the characteristics of an effective team in reaching specific business goals
Cognitive
3.1 Problem Solving – Given a business problem, select and defend a business solution chosen from specific alternatives
3.2 Information Literacy – Given a business research question, access information from a variety of sources, select appropriate sources to respond to a
business question
Analysis/Application
4.1 Integration – Describe the interrelationship of the functional business areas of statistics, accounting, operations, finance, marketing, and strategy
Ethics/Diversity
5.1 Diversity – Identify the issues and challenges related to diversity in current business organizations
5.2 Ethics – Identify the issues and challenges related to ethics in current business organizations
Course Objectives:
1.
2.
3.
Describe a business transaction. (Program Outcome(s): 1, & 4)
1.1. Explain the purpose of a business.
1.2. Describe the ownership structure of a business.
1.3. Describe common business activities.
1.4. Identify the components of every business transaction.
1.5. List the information required for making decisions in a business.
Identify the basic elements of the accounting equation. (Program Outcome(s): 1, & 4)
2.1. Define assets and liabilities.
2.2. Explain the concept of owners’ equity.
2.3. List the components of retained earnings.
2.4. Describe revenues, expenses, and dividends.
Illustrate how transactions can be stated in terms of the accounting equation. (Program Outcome(s): 1, & 4)
3.1. Describe two ways of calculating assets.
3.2. Describe two ways of calculating owner’s equity.
Page 2
4.
Identify and describe the four basic financial statements of a sole proprietorship. (Program Outcome(s): 1, & 4)
4.1. Describe four basic financial statements and the underlying business processes.
4.2. Describe the statement that measures the operating performance of a company.
4.3. Describe the statement of retained earnings.
4.4. Describe the statement that measures the financial position of a company.
4.5. Describe the statement of Cash flows.
4.6. Explain the relationships that exist among the various financial statements.
5. Identify the nature of a chart of accounts. (Program Outcome(s): 1, & 4)
5.1. Define the chart of accounts.
5.2. Describe the purpose of maintaining the chart of accounts.
5.3. Define normal balances of accounts.
6. Recognize the nature of an account and general rules of debits and credits. (Program Outcome(s): 1, & 4)
6.1. Identify the five different types of accounts.
6.2. Define Double-Entry Accounting and T-accounts.
6.3. Record increases and decreases in the accounts.
6.4. Identify the nature of various accounts in the financial statements.
7. Describe the use of journals and ledgers. (Program Outcome(s): 1, & 4)
7.1. Explain the function of journals and general ledger.
7.2. Define the general ledger system and explain how it works.
8. Prepare a trial balance. (Program Outcome(s): 1, & 4)
8.1. List every account of an entity.
8.2. Tally the debit and credit balances.
9. Describe the adjusting and closing processes. (Program Outcome(s): 1, & 4)
9.1. Explain why adjusting entries are passed and how to pass them.
9.2. Define accrued revenues, accrued expenses, deferred revenues, and deferred
expenses.
9.3. Define and understand adjusted trial balance.
9.4. Describe the meaning of closing and its necessity.
9.5. Explain temporary, permanent, nominal, and real accounts.
9.6. Journalize and post closing entries.
10. Complete a worksheet. (Program Outcome(s): 1, & 4)
10.1. Define a worksheet.
10.2. Prepare a worksheet.
11. Describe the components of the accounting cycle. (Program Outcome(s): 1, & 4)
11.1. Record journal entries.
11.2. Post journal entries.
11.3. Prepare trial balance.
Page 3
12.
13.
14.
15.
16.
11.4. Prepare and post adjusting journal entries.
11.5. Prepare the adjusted trial balance.
11.6. Prepare financial statements.
11.7. Close the books.
11.8. Prepare the Post-closing trial balance.
Record all transactions to complete the accounting cycle for a sole proprietorship service business. (Program Outcome(s): 1, & 4)
12.1. Examine all the transactions of a sole proprietor that have taken place for the period in question.
12.2. Perform the steps required to complete the accounting cycle of a service business.
Recognize and understand the accounting for a merchandising business. (Program Outcome(s): 1, & 4)
13.1. Describe the Acquisition and Payment process.
13.2. Explain the relation between inventory and cost of goods sold.
13.3. Define purchases, purchase returns, and purchase discounts and allowances.
13.4. Describe the procedure followed for acquisition of goods.
13.5. Explain the gross profit method to estimate the ending inventory balance.
13.6. Explain the payment process for Acquisitions and recognition of resulting liabilities.
13.7. Explain the sales and the collection process.
13.8. Differentiate between cash and credit sales.
13.9. List the factors involved in revenue recognition.
13.10. Record entries for sales, sales returns, sales discounts, and accounts receivables.
Describe basic accounting concepts regarding cash. (Program Outcome(s): 1, & 4)
14.1. Explain the concept of the time value of money.
14.2. Define and explain the purpose of cash reconciliation.
14.3. Prepare bank reconciliation.
Recognize the classifications, characteristics, and accounting principles for temporary receivables. (Program Outcome(s): 1, & 4)
15.1. Define Accounts receivables, notes receivables, and other temporary receivables.
15.2. Describe the accounting methods for uncollectible receivables.
15.3. Prepare an aging of accounts receivables schedule.
15.4. Explain accounting for cash collections from customers.
15.5. Describe method for writing off uncollectible receivables.
Make the necessary calculations and recordings to account for payroll, payroll taxes and other current liabilities. (Program Outcome(s): 1, & 4)
16.1. Describe the process of calculation of payroll expense and payroll taxes.
16.2. Record the entries to account for payroll expense and payroll tax liability.
16.3. Explain the special business risks pertaining to payroll.
16.4. List and describe the accounting process for other current liabilities.
Page 4
Assignment Table. Weekend Session I, Module 1 & 2
Weekend Session II, Module 3 & 4
Module
1
Module Topics
Readings
Assignments

Warren, Reeve, and Duchac
Chapter 1
Chapter 2
Discussion Questions:




Analyzing and Accounting for
Business Transactions
The Financial Statements
Business Risks
Chart of Accounts
Debits and Credits
1.
You are planning to start a new merchandising business dealing
in children’s toys and stationery products. You heard that
recently two businesses in the same sphere had to be shutdown
due to accounting malpractices. Therefore, to ensure that the
business is a success, you are leaving no stones unturned. You
decide to do a risk analysis for the various business risks that
you may encounter due to accounting malpractices.
a. What could be the top 3 business risks, related to
accounting, that you foresee in the new business and why?
b. What measures can you adopt to eliminate these risks? List
and explain at least 2 measures.
2.
You have been nominated by your institution for a seminar
because of your proficiency in basic accounting concepts. The
participants and audience include college professors, practicing
CPAs, and fellow students. The theme of the seminar is Basic
Accounting Principles. You have been asked to share whether
or not the statement “Debit means decrease and credit means
increase” is true?
List and discuss the various points that you will share with the
audience.
3.
You are an employee of a Wealth Management consultancy. As
your first accounting assignment for the consultancy, you are
auditing the chart of accounts for a client. You notice that all
receivables are treated as assets and all payables as liability in
Page 5
the chart of accounts. Is this correct? Explain your answer.
Assignments:
1.
The balance of Pepsi Bottling Group at December 31, 2003 and
December 31, 2002 reported the following amounts (in
billions):
Dec. 31, 2003
Total Assets
Total Liabilities
Dec. 31, 2002
$22
$21
$11
$12
The following transactions relating to issuance of stock and
payment of dividends took place during January 1, 2003 and
December 31, 2003. For each transaction, compute the amount
of Pepsi Bottling Group’s net income or net loss during the
year.
a. Pepsi issued $ 1 billion of stock and paid no dividends.
b. Pepsi issued no stock and paid dividends of $2 billion.
c. Pepsi issued $5 billion of stock and paid dividends of $1
billion.
Which of the above situations indicates the strongest operating
results for Pepsi? Which situation indicates the weakest results?
Give reasons for each answer. Use the Template_A_I for
providing the solution.
2.
Visit the http://www.sec.gov/ Web site.
 Go to Filings and Forms (Edgar) Web page.
 Access the Search for Company Filings Web page.
 Go to the Historical Edgar Archives Web page.
Page 6







In the Search box, enter the name of the company selected
by you for analysis, and click Search. Following is a list of
some organizations that you may want to research on. You
are free to select any other organization.
o Microsoft Corp
o Annaly Mortgage Management Inc
o Publix Super Markets Inc.
o Winn Dixie Stores Inc.
o Abercrombie & Fitch Co
In the displayed results, scroll down the list of forms to
Form 10-K (mentioned in the ‘Form Type’ column) for the
most recent filing date. Select “html” under format type.
From the list of documents, double click on the document
titled “d10k.htm” or the document description that states
Form 10-K.
Go to Item 1 titled “Business” and Item 6 titled
“Selected Financial Data”.
Print a copy of the 10-K or save as a MS Word document.
Carefully note the various revenue and expense items that
appear on the statement of operations.
In addition, notice how Assets and Liabilities appear on
the Balance Sheet (B/S) and the typical kinds of assets and
liabilities that are seen on a balance sheet.
Based on the analysis of Form 10-K, answer the following
questions. You can submit your responses in a MS Word
document.
a. What is the company’s primary business activity?
b. Identify the amount of total assets, total revenues,
operating income, stockholders’ equity for the year 2003
or the most recent filing date, whichever is later. On which
financial statement will you find each amount reported?
3.
John started his bike dealership, a sole proprietorship, on April
1, 2004, selling new and used bikes. The gross profit earned on
new bike sales is 40%. John used $40,000 of his personal funds
to start the business.
Page 7
a.
b.
c.
d.
On April 1, the business buys $30,000 worth of new
bikes from his supplier with cash.
On April 30th, customer brings in used bikes and
business buys them for $7500.
On June 30th, new bikes are sold for $30,000. Half of
these sales are on account.
On June 30th, the business sells all the used bikes for
$15,000 cash.
Record the above transactions into T-accounts for John.
For recording the answers, use Template_A_I.
2




The Matching Concept
The Adjusting Process
The Closing Process
Journalize and Posting Entries
Warren, Reeve, and Duchac
Chapter 3
Discussion Questions:
1.
In the last quarter of 2004, ABC Inc. launched an advertising
campaign for one of its new premium products, expensive
cologne targeted at women. The advertising expenses for the
entire campaign were to the tune of $20 million. The product is
expected to go into production in the first quarter of 2005. The
CFO of ABC Inc. wants to expense the entire amount of the
advertising expense in 2004. However, the statutory auditors
are of the opinion that expensing the advertising expense in
2004 is not proper accounting treatment.
a. In your opinion, is the CFO right in his assertion?
b. Are the statutory auditors right? Give reasons for your
answers.
2.
You are the owner of a security agency, dealing in products to
safeguard apartments, vehicles, and stores. The business has
been in operation for almost 12 months now. Your partner
suggests that conducting an audit would be advantageous and
emphasizes, “Audit is a good mitigator of business risk”. The
Page 8
cost of conducting the audit would be $3000.
Given that there is a cost associated with conducting the audit,
Is this a correct choice for mitigating risks? Discuss.
3.
You have been running a sole-proprietorship business dealing
in cosmetic products. You have been accurately recording all
your sale and purchase transactions in journals and using the
journals, in the general ledger accounts. Lately, you have
observed that the entire exercise is taking a lot of time. You are
therefore considering recording the transactions directly into
the general ledger accounts.
Is this ethical and will you be following the accounting norms
if you undertake such a step? Why or why not? Discuss.
Assignments:
1. The MS Excel file contains the trial balance and adjustment
information for a merchandising company.
Prepare a worksheet for the company at the end of the financial
period.
You can use Template_A_I for the solution.
2.
Final Project
Assume that your business has been in operation for six months
from the date of inception. Replicate the transactions entered
into in Phase I six times with different amounts from before so
you have a minimum of thirty total transactions, with at least
six transactions of each kind, such as six entries for sales, six
entries for purchases of assets, or if you selected a
merchandising company, then six transactions for purchase of
inventory. For the transaction amounts, estimate the figures
based on your analysis.
Page 9
3






Steps in the Accounting Cycle
Procedures for the Acquisition of
Goods
Gross Profit Method and Cost of
Good Sold
Estimating Ending Inventory
Procedures for Acquisitions
Payments
Sales and the Collection Process
Warren, Reeve, and Duchac
Chapter 4
Chapter 6
Discussion Questions:
1.
During 2002, Enron Corporation hid large liabilities from its
balance sheet. Worldcom admitted to recording expenses as
assets. Both companies tried to improve their financial
appearance by window dressing their financial statements.
Is this an ethical issue? If yes, what is the ethical issue?
Use the accounting equation to show how Enron abused good
accounting. Use a separate accounting equation to demonstrate
WorldCom’s error.
Enron :
Assets =
Worldcom: Assets =
Liabilities
(were understated)
Liabilities
(were overstated)
+
+
Owners’ Equity
(was overstated)
Owners’ Equity
(was overstated)
When companies report untrue financial data, investors
waste their money on undeserving entities and usually
suffer losses. Investors then file lawsuits in the hope of
recovering their losses, but they are seldom able to recover
much.
2.
Most credit card transactions are now handled electronically.
When the customer’s credit card is “swiped” the amount of the
sale (less the credit card company’s fee) is deposited directly
into the company’s bank account.
Will those sales be considered as cash sales or credit sales?
Give reasons for your answer.
3.
Accounts officers at Xerox Corporation discovered that
significant errors have been made in the valuation of inventory
and are worried that it might have significant impact on the Net
Income and Earnings per share.
Page 10
What are the possible top 3 effects of the errors on net income?
What could have been the top 2 reasons behind incorrect
valuation of the inventory?
4.
The net income of Reliable Provision Company decreased
sharply during 2003. Clay Rollins, owner of the store,
anticipates the need for a bank loan in 2004. Late in 2003, he
instructed the accountant to record a $70,000 sale of
recreational gear to the Smith family, even though the goods
will not be shipped from the manufacturer until January 2004.
Smith told the accountant not to make the following adjusting
entries:
Salary owed to employees: $1,000
Expired Prepaid Insurance: $500
Is income overstated or understated? Why did Smith take these
actions? Are they ethical? Give your reason. As a friend, what
advice would you give the accountant?
5.
The CFO of PQR Inc. was advised by his Credit manager to
give better credit terms to new customers to induce sales. The
CFO was concerned about the effects of doing the same on the
financial statements, such as total assets and return on total
assets.
In your opinion, what could be the possible effects of following
the advice of the Credit manager on the financial statement
items?
Assignments:
1.
Refer to the document Assignment_II. You are provided with
the month end trial balance and data needed for the month-end
adjustments. Complete the adjusted trial balance for the month
end and prepare the financial statements in report format. Also,
journalize and post the adjusting and closing entries. You can
Page 11
use the templates referenced in the Assignment_II document.
2.
You are provided with the month-end trial balance and data
needed for the month-end adjustments for a merchandising
company. Complete the ledger accounts, the adjusted trial
balance for the month-end, and prepare the financial
statements. In addition, journalize and post the adjusting and
closing entries. In addition, you are required to post the
adjusting and closing entries, using dates.
3.
Read the attached article and write a synopsis about your
analysis on the issues raised in the article.
You can refer to the executive summary which is a part of the
article (at the bottom of page 2) to summarize the key issues in
the article.
4.
Final Project
Assume that your business has been in operation for six months
from the date of inception. Replicate the transactions entered
into in Phase I six times so you have a minimum of thirty total
transactions, with at least six transactions of each kind, such as
six entries for sales, six entries for purchases of assets, or if you
selected a merchandising company, then six transactions for
Page 12
purchase of inventory. For the transaction amounts, estimate
the figures based on your analysis.
You should ensure that all the steps that are performed in the
accounting cycle are being followed as required.
4

Temporary receivables
Warren, Reeve, and Duchac
Chapter 8
Discussion Questions:
1.
You own an automobile parts company and have been
approached by a leading car manufacturer to supply parts to the
company.
a. How would you determine that the car manufacturer has a
good record of servicing sales and paying its customers?
b. What are the signs you would look out for in the financial
statements for the possibility of bad debts? Give reasons
for your answers.
2.
You are considering switching from a Value Payable Post
(VPP) system to cash or credit sales system. Is this a good
decision? Identify the possible risks that are related to cash and
credit sales. In addition, give examples of controls that might
prevent, detect, or correct the identified risks.
Assignments:
1.
On January 1, 2003, a company’s accounts receivable balance
was $8,900 and the allowance for doubtful debts was $600.
This information came from the December, 31 2002 balance
sheet. During 2003, The company reported $77,000 of credit
sales. During 2003, $400 worth of receivables were written off
as uncollectible. Cash collections of receivables were $69,000
for the year. The company estimates that 3% of the year-end
accounts receivable will be uncollectible. What is the bad debt
expense for the year ending December 31, 2003? You can use
Template_III for providing the answer.
Page 13
2.
D-Mart has provided the following information about the
company’s sales and accounts receivable for the fiscal year
ending December 31, 2003.
 Accounts receivable at Dec. 31, 2003, $42,500.
 Allowance for collectible accounts at Dec. 31, 2003,
$1,275.
 Credit sales for the year ended Dec. 31, 2003
$135,750.
 Cash collections on accounts receivable during 2003
$142,600.
 Accounts written off during 2003, $1,050.
a.
b.
c.
d.
Assume that D-Mart was using the accounts receivable
balance to estimate the uncollectible accounts expense at
the end of 2002. When 2003 is completed, can you
estimate whether D-Mart has over or under-estimated the
uncollectible accounts expense at the end of 2003? Explain
your answer.
If D-Mart used the sales method of estimating the
allowance, can you tell what percentage of sales the
company believes will not be collected? Give reasons for
your answer.
Assume that D-Mart uses the accounts receivable to
estimate uncollectibles. The company estimates that 3% of
ending accounts receivable will be uncollectible.
1. Compute the uncollectible accounts expense for the
year ended Dec. 31, 2003.
2. Compute the net realizable of accounts receivable on
the Dec. 31, 2003 balance sheet.
You can use Template_IV for providing the answer.
Page 14
e.
At this stage of your business,
1. Identify the method that you would like to follow for
estimating uncollectible accounts.
2. Calculate the bad debt expense and record it in the
books based on the correct accounting treatment
Weekend Session I Exercises (to be done in class)
A. Discussion Questions:
1.
“The main goal of all businesses is to make profit.” Discuss.
2.
Your friend finds out that you are taking an online accounting course. Knowing that you are not planning to major in business, the friend asks you the
purpose of taking the course. Discuss and explain to the friend how you and your friends will use accounting information in:
i) Personal life.
ii) The engineering business of a friend.
iii) The service business of a friend.
Mention and discuss at least two points for each situation.
3.
You are planning to start a small business that you want to run as a sole proprietor. A friend of yours, who has been an employee of an IT consulting
corporation for 3 years, suggests that the corporate form of ownership is more efficient from accounting perspective.
Do you agree? Explain your answer with appropriate examples.
Assignments:
1.
In the financial year 2002-03, Acme Carwash recorded the
following transactions.
 The proprietor invested $ 20,000 in the business,
Page 15









The proprietor withdrew $ 5,000 from the business.
The proprietor bought machinery worth $6,000.
Cash sales amounted to $8,000.
Credit sales amounted to $ 6000.
Land was purchased and paid for partly in cash ($8,000) and partly in credit (4,000).
Viterra water bill in the amount of $550 was received and paid immediately.
Progress Energy bill in the amount of $770 was received and recorded but was not paid at the end of the period.
50% of the credit sales were realized.
The Progress Energy bill was paid.
Evaluate the effect of each transaction on the accounting equation. Use the Template_A_II for providing the solution.
B. Discussion Questions:
1.
You have started a sole-proprietorship business. It is a department store selling groceries. You receive payment for the sales made either through a credit
card or cash. You pay your suppliers on a credit basis of 30 days. To efficiently manage accounts for your sales and purchases, will you prefer the Accrual
basis accounting or the Cash basis accounting? Discuss.
2.
You have a sole-proprietorship merchandizing business dealing with photography equipments. The business was established 3 years back and had an
average annual turnover of $ 50,000. However, over the last 6 months the monthly sales have fallen considerably. To reverse this downward slide you are
considering selling the products on a credit basis of 15 days to all your regular customers. There are approximately 25-30 such customers.
In turn, you also plan to ask your vendors to increase the credit period from 15 days to 25 days for all payments.
Is buying or selling the products on credit basis a good decision or not? Explain.
3.
ABC Inc. has just entered into the business of selling antique cars. The company management decided to lease the premises for the business instead of
buying the office premises. They ended up paying an advance rent of $5 million dollars for the initial period of 5 years. The entire amount was recorded as
an asset in the form of prepaid expense. When questioned by the auditors, the CFO of ABC Inc. mentioned “An asset is just an expense waiting to happen.”
Discuss the validity and implications of this statement.
Page 16
Assignments:
1.
Ten transactions that took place in the normal course of business in the first year of operation are provided to you. Determine the T-accounts that will be
used and pass the entries recording the effect of the transaction in the respective T-accounts.
a. The owner of ABC LLP. invests $20,000 from his personal investment account into the company.
b. The company purchases a machine for $8, 000, paying $4,000 immediately and agreeing to pay $4,000 later.
c. The company performs services of $12,000 for cash.
d. The company performs services of $40,000 on credit.
e. The company pays its monthly telephone expense of $700.
f. The company receives a bill of $600 but does not pay it at this time.
g. The previous electrical bill of $600 is paid.
h. The owner withdraws $1,000 for his personal use.
i. Supplies worth $900 are purchased on account.
j. The company collects $6,000 of the $12,000 receivable for services performed. The remaining amount will be collected later.
You can use the T account templates provided in the Template_A_II MS Word file for providing the solution.
2.
Final Project
You have recently completed your Masters in Business Administration. Now, you plan to incorporate a sole-proprietorship business entity. Analyze and
decide whether you want to set-up a service organization or a merchandizing business. In order to decide the type of business organization, you can refer to
the copies of Business Week and decide which type of business will be a success.
After you decide on a business, envision the core activities that will be performed at the start of operations. These can include:
1. Investing personal funds.
2. Purchasing machinery or office furniture or both.
3. Performing services or selling goods for cash.
4. Performing services or selling goods on account.
5. Paying utility and telephone bills immediately or later.
You can also enter into more than five transactions. However, a minimum of the five transactions of the different types outlined above have to be entered
into. Based on your research and analysis (using Business Week), estimate the amounts for the transactions mentioned above.
Page 17
Create a journal and a general ledger for your company. Determine the T-accounts that will be used and pass the entry recording the effect of the transaction in
the respective
T-accounts. The date that you start the project will be the date your enterprise starts doing the business. Use dates when you record the
transactions into the journal and the ledger.
Weekend Session II Exercises (to be done in class)
C.Discussion Questions:
1.
Consider the following scenarios:
a. When we talk about “bad checks,” are those always checks our customers have written to us? Would the company also write any bad checks and
what are the repercussions for the same? Give examples to support your answer. You can also refer to the Business Week magazine for providing
the solution.
b. Suppose one person opens the cash receipts (checks received in the mail), makes the bank deposits, and keeps the A/R records. What top 3 potential
problems could arise due to lack of separation of duties?
c. Why would a store offer a free purchase to a customer, who does not receive a receipt for a purchase already made by him/her?
2.
“Do you agree that a budget is an effective tool for managing cash?” Give reasons to support your answer.
Assignments:
1.
Consider the following information for Susan Supplies Store for the month of June.








Deposits in transits as of June 30, were $3,785.15.
Interest revenues earned was $1,300.
Bank service charges amounted to $48.
An error was discovered: The bank deducted from the Susan Supplies Store account a check for $161.03 that was written by Susie’s Office Furniture.
The following checks were still outstanding as of the bank statement date:
16552
$10,460.60
16549
$200.58
16560
$532.27
The Office Accountant recorded a deposit of $332 as $223.
The bank returned a check from a customer as NSF in the amount of $1,059.17.
Balance per the bank on June 30 was $45,020.59.
Page 18
Given the above information, determine the ending cash balance that appears on the Susan Supplies Store books. You can use Template_I for providing the
answer.
2. Final Project
At this stage of your business, make sure that your Total Current assets balance is greater than your Total Current liabilities. Prepare financial statements for the
half-yearly period.
D. Discussion Questions
1.
A potential control for managing the risk of employee fraud is
to send employees on mandatory vacations. Explain the
relation of that control with the payroll function.
Why will it be a good idea to require the payroll clerk, who
writes checks, to go on a vacation? Provide examples from real
life and discuss.
2.
The auditors of Annaly Mortgage discovered that a lot of
fictitious employees were on the payroll system and were being
paid salaries. Neither the CFO nor the Payroll manager was
aware of the fraud.
What could be the possible reasons for the fictitious employees
being added on the payroll system?
Discussion Questions:
1.
Suntrust bank has an annual payroll of $800,000. In addition,
the bank incurs payroll tax expense of 9%. At December 31,
the end of the bank’s accounting year, Suntrust owes salaries of
$7,000 and FICA and other payroll tax of $2,000. The bank
Page 19
will pay these amounts early next year.
Show what the Suntrust bank will report for the foregoing on
its income statement and year-end balance sheet. Use
Template_I for recording the solution.
2.
Final Project
Discuss and compare results for your business with the results
of other students who have similar business types. For
performing the comparison, you can use the net income
percentage for a service company or the gross profit percentage
if the company is a merchandising company. (Gross profit
percentage is obtained by dividing the net income by the total
sales revenue).
In addition, submit a report summarizing your findings,
including a write-up on methods, if any, which you could have
implemented to improve the profitability and performance of
the business. You can rely on standard practices that are
followed and project how the business performance could have
improved if you had followed any two best recommended
practices for that industry. Also provide reasons for the answer
and any dangers to look out for in implementing these
practices. (Hint: Improve sales by offering better credit terms
than the competitors.)
Page 20
Grading Criteria
Grading Scale
A
AB+
B
BC+
C
CD+
D
DF
100 – 93
92 – 90
89 – 88
87 – 83
82 – 80
79 – 78
77 – 73
72 – 70
69 – 68
67 – 63
62 – 60
59 and below
Grading requirements
Attendance/participation
Weekly Assignments
Final paper
Optional
Optional
25%
20%
35%
10%
10%
100%
Page 21
Library:
All resources in Argosy University’s online collection are available through the Internet. The campus librarian will provide students
with links, user IDs, and passwords.
Library Resources: Argosy University’s core online collection features nearly 21,000 full-text journals and 23,000 electronic books
and other content covering all academic subject areas including Business & Economics, Career & General Education, Computers,
Engineering & Applied Science, Humanities, Science, Medicine & Allied Health, and Social & Behavior Sciences. Many titles are
directly accessible through the Online Public Access Catalog at http://library.argosyu.edu. Detailed descriptions of online resources
are located at http://library.argosyu.edu/misc/onlinedblist.html.
In addition to online resources, Argosy University’s onsite collections contain a wealth of subject-specific research materials
searchable in the Online Public Access Catalog. Catalog searching is easily limited to individual campus collections. Alternatively,
students can search combined collections of all Argosy University Libraries. Students are encouraged to seek research and reference
assistance from campus librarians.
Information Literacy: Argosy University’s Information Literacy Tutorial was developed to teach students fundamental and
transferable research skills. The tutorial consists of five modules where students learn to select sources appropriate for academic-level
research, search periodical indexes and search engines, and evaluate and cite information. In the tutorial, students study concepts and
practice them through interactions. At the conclusion of each module, they can test their comprehension and receive immediate
feedback. Each module takes less than 20 minutes to complete. Please view the tutorial at http://library.argosyu.edu/infolit/
Academic Policies
Academic Dishonesty/Plagiarism: In an effort to foster a spirit of honesty and integrity during the learning process, Argosy University
requires that the submission of all course assignments represent the original work produced by that student. All sources must be
documented through normal scholarly references/citations and all work must be submitted using the Publication Manual of the
American Psychological Association, 5th Edition (2001). Washington DC: American Psychological Association (APA) format. Please
refer to Appendix A in the Publication Manual of the American Psychological Association, 5th Edition for thesis and paper format.
Students are encouraged to purchase this manual (required in some courses) and become familiar with its content as well as consult
the Argosy University catalog for further information regarding academic dishonesty and plagiarism.
Page 22
Scholarly writing: The faculty at Argosy University is dedicated to providing a learning environment that supports scholarly and
ethical writing, free from academic dishonesty and plagiarism. This includes the proper and appropriate referencing of all sources.
You may be asked to submit your course assignments through “Turnitin,” (www.turnitin.com), an online resource established to help
educators develop writing/research skills and detect potential cases of academic dishonesty. Turnitin compares submitted papers to
billions of pages of content and provides a comparison report to your instructor. This comparison detects papers that share common
information and duplicative language.
Americans with Disabilities Act Policy
It is the policy of Argosy University to make reasonable accommodations for qualified students with disabilities, in accordance with
the Americans with Disabilities Act (ADA). If a student with disabilities needs accommodations, the student must notify the Director
of Student Services. Procedures for documenting student disability and the development of reasonable accommodations will be
provided to the student upon request.
Students will be notified by the Director of Student Services when each request for accommodation is approved or denied in writing
via a designated form. To receive accommodation in class, it is the student’s responsibility to present the form (at his or her
discretion) to the instructor. In an effort to protect student privacy, the Department of Student Services will not discuss the
accommodation needs of any student with instructors. Faculty may not make accommodations for individuals who have not been
approved in this manner.
The Argosy University Statement Regarding Diversity
The Argosy University provides equitable access through its services and programs to students of any social, geographic and cultural
background, regardless of gender, and strives to prepare all candidates to work with and provide services to diverse
populations. Argosy demonstrates its commitment to diversity through the development and support of a diverse educational
community.
Page 23
Page 24