Competencies: Company Accounting Workbook

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Competencies

In this project, you will demonstrate your mastery of the following competencies:

 Record and present financial information by applying the appropriate framework and guidelines of accounting for business transactions
 Determine asset accounts and their disclosure in the financial statements
 Determine liability and equity accounts and their disclosure in the financial statements

Scenario
You were recently hired as an entry-level bookkeeper for a service business that recently opened. This is the first month in operation for the business and your first task is to record
business transactions for their first month using the source documents and transaction data the owner will provide to you. Because this is a small business that does not use
computerized accounting, you will apply the accounting cycle in Excel to record transactions and generate financial reporting results for the owner.

Directions
I. Company Accounting Workbook

Use accepted accounting principles to follow and record your business transactions for a one-month period from the first step of the accounting cycle through the reporting process.
You will build on the workbook you created in Milestones One and Two, or you may start over with the blank Company Accounting Workbook Template (linked below in the What to
Submit section), incorporating instructor feedback where applicable. After you complete your workbook, you will prepare a summary report of your work.

Your completed accounting workbook will consist of journal entries for each transaction and postings of transactions to account ledgers. You will develop a trial balance from the
ledger balances, and use these balances to prepare the income statement, statement of owner's equity, and the balance sheet. After the preparation of the financial statements,
closing entries will be entered to transfer earnings to equity and prepare temporary accounts for the new accounting period.

Use the instructions below to complete your workbook. Specifically, you must address the following rubric criteria:

1. Record Financial Data: Use accepted accounting principles to accurately capture business transactions for the month using the data provided in the accounting data appendix
(linked in the Supporting Materials section). You will need to address the following:  
A. Accuracy: Prepare entries that are accurate in that they fully reflect the appropriate information.
B. Completeness: Prepare entries that are complete for the month, including transferring posted entries to T accounts.
C. Unadjusted Trial Balance: Prepare the unadjusted trial balance portion of the “Trial Balance” tab of the company accounting workbook, ensuring that the total debits and
credits match.
2. Financial Statements: Create financial statements using appropriate methods based on accepted accounting principles. Be sure to prepare these financial statements in the
order listed, as there are important interdependencies among them. Finalize the process by closing temporary accounts.

A. Income Statement: Prepare the income statement using the adjusted trial balance.
B. Statement of Owner’s Equity: Prepare the statement of owner’s equity using the adjusted trial balance.
C. Balance Sheet Assets: Prepare the balance sheet asset entries using the adjusted trial balance.
D. Balance Sheet Liabilities: Prepare the balance sheet liabilities entries using the adjusted trial balance.
E. Closing Entries: Complete the “Closing Entries” tab of the company accounting workbook by closing all temporary income statement amounts to create closing entries.
II. Summary Report

After you have finished preparing all the financial statements, analyze the statements and write a short report summarizing your findings. Use the template provided in the What to
Submit section to complete your report. There is also a Final Project Walkthrough video available in Supporting Materials that will provide guidance for completing your template. In
addition to the financial statement results, the owners have requested that you provide them with additional information as further growth is anticipated. They would like more input
from you to support the best possible decisions for the business.

In addition, the owners are requesting that you provide them with some suggestions on simple internal controls they can integrate to ensure protection of company assets, and
accuracy in the company's financial data. The owners are also considering acquiring more long-term/fixed assets, such as vehicles, equipment, buildings, and so on. They would like
your input on the different options available for depreciation of these costs. Adding sales of product is also a consideration for expansion. The owners want to know what accounting
considerations will be involved with this change.

3. Summary: Write a summary of what the financial statements indicate about the company’s financial health and performance.
A. Purpose: Discuss the accounting process and the resulting financial statements as they relate to meeting the informational needs of the user.
B. Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data.
i. Consider what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how
this information will be used in business decision making and planning.
C. Analysis: Explain the company’s cash position, its net income as a percentage of sales, and its current liabilities to current assets position.
D. Results: Discuss the results regarding profitability of the first month of operations.
i. Consider how well the company is positioned to meet current liabilities.
ii. Be sure to include the percentage of revenues that result in profit/net income and the current ratio when discussing profitability and liquidity based on the recorded
month’s results.
iii. Consider key points in your observations of results: is the company operating profitably (what percent of revenues result in profit/net income)? How well-poised are
they to meet liabilities (discuss liquidity and current ratio)?
E. Recommendations: Recommend a simple system of controls that can be implemented to ensure protection of company assets and the accuracy and integrity of their
financial data as they anticipate further growth.
i. Consider additional controls that will support the potential for adding merchandise and additional assets with business growth/expansion.
F. Asset Valuation: Discuss the treatment of current and long-term assets on the balance sheet.
i. Discuss at least two different methods of depreciation. Consider how the methods of depreciation will be determined.
ii. Discuss how LIFO, FIFO, and average methods will differ and provide examples of types of applicable merchandising.
iii. Consider how accounting will change with the addition of merchandise inventory.

What to Submit
To complete this project, you must submit the following:

Company Accounting Workbook


Your workbook should be completed and submitted as a Microsoft Excel file based on the template provided.

Project Summary Report


Use this template to submit a 1- to 2-page Word document summarizing the financial statements you created.
Supporting Materials
The following resources support your work on the project:

Resource: Accounting Data Appendix


This resource includes all the existing financial information needed to complete your project.

Tutorial: Hoonuit Microsoft Excel Tutorial


This tutorial from Hoonuit provides helpful information on how to use the basic features of Microsoft Excel. Use the table of contents to select the tutorials that best suit your needs.

Video: Final Project Walkthrough (7:48)


This video walkthrough is available if you need additional assistance completing your project. The video uses a sample data set for illustrative purposes.

A video transcript is available: Transcript for ACC 201 Final Project Walkthrough

Project Rubric
Not
Criteria Exemplary (100%) Proficient (85%) Needs Improvement (55%) Evident Value
(0%)

Record Financial Data: Accuracy Prepares accurate Prepares accurate entries Prepares entries that have Does not 5
entries with no with minimal errors significant inaccuracies attempt
errors criterion

Record Financial Data: Completeness Prepares entries that Prepares entries that are Prepares entries that are Does not 5
are complete for the complete for each month, complete for each month, attempt
month, including including transferring including transferring posted criterion
transferring posted posted entries to T entries to T accounts, with
entries to T accounts, with minimal significant errors
accounts, with no errors
errors 

Accrual Basis: Unadjusted Trial Balance Prepares the Prepares the unadjusted Prepares the unadjusted trial Does not 5
unadjusted trial trial balance with balance with significant errors attempt
balance accurately, minimal errors criterion
ensuring the total
debits and credits
match with no
errors

Financial Statements: Income Statement Prepares the income Prepares the income Prepares the income statement Does not 5
statement using the statement using the using the adjusted trial attempt
adjusted trial adjusted trial balance balance with significant errors criterion
Project Rubric
Not
Criteria Exemplary (100%) Proficient (85%) Needs Improvement (55%) Evident Value
(0%)

balance with no with minimal errors


errors

Financial Statements: Statement of Owner’s Prepares the Prepares the statement of Prepares the statement of Does not 5
Equity statement of owner’s equity using the owner’s equity using the attempt
owner’s equity adjusted trial balance adjusted trial balance with criterion
using the adjusted with minimal errors significant errors
trial balance with no
errors

Financial Statements: Balance Sheet Assets Prepares the balance Prepares the balance Prepares the balance sheet Does not 5
sheet assets using sheet assets using the assets using the adjusted trial attempt
the adjusted trial adjusted trial balance balance with significant errors criterion
balance with no with minimal errors
errors

Financial Statements: Balance Sheet Liabilities Prepares the balance Prepares the balance Prepares the balance sheet Does not 5
sheet liabilities sheet liabilities using the liabilities using the adjusted attempt
using the adjusted adjusted trial balance trial balance with significant criterion
trial balance with no with minimal errors errors
errors

Financial Statements: Closing Entries Completes closing Completes closing Completes closing entries by Does not 5
entries by closing entries by closing all closing all temporary income attempt
all temporary temporary income statement amounts to create criterion
income statement statement amounts to closing entries, but there are
amounts to create create closing entries significant errors
closing entries with with minimal errors
no errors

Summary: Purpose Exceeds proficiency Discusses the accounting Shows progress toward Does not 10
in an exceptionally process and the resulting proficiency, but with errors or attempt
clear, insightful, financial statements as omissions; areas for criterion
sophisticated, or they relate to meeting the improvement may include
creative manner informational needs of errors in the description of the
the user accounting process or how the
financial statements relate to
the needs of the user

Summary: Process Exceeds proficiency Explains the process used Shows progress toward Does not 10
in an exceptionally to produce accurate proficiency but with errors or attempt
Project Rubric
Not
Criteria Exemplary (100%) Proficient (85%) Needs Improvement (55%) Evident Value
(0%)

clear, insightful, account balances and omissions; areas for criterion


sophisticated, or financial statements from improvement may include
creative manner the individual transaction missing relevant details about
data the account balance and
financial statement process

Summary: Analysis Exceeds proficiency Explains the company’s Shows progress toward Does not 10
in an exceptionally cash position, its net proficiency but with errors or attempt
clear, insightful, income as a percentage omissions; areas for criterion
sophisticated, or of sales, and its current improvement may include
creative manner liabilities to current missing relevant details about
assets position the company’s cash position,
its net income as a percentage
of sales, and its current
liabilities to current assets
position

Summary: Results Exceeds proficiency Discusses the results Shows progress toward Does not 10
in an exceptionally regarding profitability of proficiency but with errors or attempt
clear, insightful, the first month of omissions; areas for criterion
sophisticated, or operations improvement may include
creative manner insufficient explanation of
current liabilities or missing
explanations of profitability
and liquidity

Summary: Recommendations Exceeds proficiency Recommends a simple Shows progress toward Does not 10
in an exceptionally system of controls that proficiency but with errors or attempt
clear, insightful, can be implemented to omissions; areas for criterion
sophisticated, or ensure protection of improvement may include
creative manner company assets, and the omission of controls related to
accuracy and integrity in company assets or the
their financial data as accuracy and integrity of
they anticipate further financial data
growth

Summary: Asset Valuation Exceeds proficiency Discusses the treatment Shows progress toward Does not 10
in an exceptionally of current and long-term proficiency but with errors or attempt
clear, insightful, assets on the balance omissions; areas for criterion
sophisticated, or sheet improvement may include
Project Rubric
Not
Criteria Exemplary (100%) Proficient (85%) Needs Improvement (55%) Evident Value
(0%)

creative manner missing methods of


depreciation, how long-term
asset methods will differ, or
how accounting might change
with the addition of inventory

Total: 100%

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