Assignment-daixieTM为您提供普利茅斯大学University of Plymouth ACF4001 Introduction to Accounting会计学代写代考和辅导服务！
Instructions:
Accounting is the process of recording, summarizing, and communicating financial information about a business or organization. It is an essential part of running any business, as it helps to track income, expenses, assets, liabilities, and equity. This information is crucial for making informed decisions about the future of the business.
The foundation of accounting is the double entry bookkeeping system, which ensures that every transaction is recorded in two accounts: a debit account and a credit account. This system provides a way to accurately track the financial health of a business and detect any errors or discrepancies that may occur.
Accounting also involves creating financial statements, which are reports that summarize the financial activity of a business over a specific period. The most common financial statements are the balance sheet, the income statement, and the statement of cash flows. These statements provide insight into a business’s financial performance and can help stakeholders make informed decisions about the future of the business.
Ratio analysis is another important aspect of accounting, which involves using financial ratios to interpret and analyze financial information. These ratios can provide insight into a business’s liquidity, profitability, and financial stability, and can be used to compare the financial performance of different businesses or industries.
Overall, accounting is a critical function of any business, as it provides a way to track financial information and make informed decisions about the future of the organization.
Answer ONE of the following two:
A. Why is conservatism important in accounting?
Accounting requires certain estimates and judgments. Conservatism improves the
process of estimation by allowing accountants to assign values to certain transactions.
- Conservatism makes accounting numbers credible.
- Lenders bear the downside risk without upside potential; therefore, lenders would like
to get the bad news more timely. Conservatism allows for this. - Conservatism improves investor believability of public companies’ financial
statements.
B. Why is objectivity important in accounting?
Information produced by managers alone is not believable. Outside investors demand
independently audited financial information.
- Allows investors to better trust the information contained in the financial statements.
- Allows for consistency in financial information among the different firms. Analysts
and investors can then compare various companies on the basis of their financial
statements and forward estimates. - Important for the auditors that review the financial statements.
- Establishes the internal control system through which transactions are properly
authorized, reported, and recorded.
For 2002 calculate the Days Inventory held by Intel. What is the cost and/or
risk of holding high inventory for Intel?
Inventory Turnover = COGS/(Average Inventory) = 8650/.5(2276 + 2253) = 3.82
Days Inventory Held = 365/(Inventory Turnover) = 365/3.82 = 95.6 days
The cost or risk associated with holding high inventory is that prices drop quickly,
particularly in Intel’s industry. There is also concern for the obsolescence of finished
goods.
