Accounting plays an important role in business operations by tracking spending, profit, loss and other financial activities. Businesses are very dependent on their accounting departments, which are responsible for monitoring cash flow, complying with tax laws, and ensuring financial reporting is accurate. Financial statements like the balance sheet, income statement, and statement of cash flows provide useful information to both internal managers and external stakeholders in making financial decisions about the business. Budgeting is an important planning tool that helps management make good decisions by planning ahead, prioritizing goals, and identifying financial issues.

1. Discussion Question 1:
Based on what you know about accounting, what role do you see it playing in business operations? How
dependent do you think a business is on its accounting department? Why?
Accounting plays many important roles especially when it comes to business
operations. Accounting is mainly responsible for almost all of the financial
needs of the business. It keeps track of all spending, profit and loss that the
company inquires.
The business is very dependent on it accounting department. Accounting
department is responsible for monitoring more than the cash flow, it also
works closely with IRS, government to make sure that everything is being
done correctly (payroll, taxes, etc). The accounting side of the business can
be considered to be the lungs of the company next to the heart.
Financial Statements
Today, I will be describing a balance sheet, income statement, retained earnings statement, and
statement of cash flows and how a company uses these financial statements as a tool to make future
decisions for the company.
Balance Sheet
A balance sheet a statement sheet that reports the company’s financial balances of the business. This
sheet includes the company’s total of assets and liabilities. It is used for all three types of business sole
proprietorship, business partnership and corporate business company’s. Creditors rely on this financial
sheet to determine if the company will be able to repay.
Income Statement
An Income Statement is a financial statement that shows the company’s profit and losses. It basically
shows all the company’s gains and losses that were made during a period of time. After the company
deducts the expenses from the revenue then you will get a total net income. This is a great statement to
use especially because this will show investors how much net income is the company bringing in, or how
financially stable the company truly is.

2. Compare and contrast sole proprietorships, partnerships, and corporations.
Sole proprietorships means that a business that owned by one person. That
includes and not limited to all profits and losses, debts and unlimited liability,
all will come from the solely one owner and not a group or in this case a
partner or co-owner etc. Partnerships are seen much differently than sole
proprietorships. Partnerships is a business that owned by more that one
person/s. This is the number one difference from being a sole proprietorship
or sole owner. Basically, two or more people come together and split the cost,
debts, and liability. Corporations is an business that has separate entity
owned by stockholders. The huge difference between corporations and the
other two is that they are owned by stockholders. Stockholders make
decisions that is first best for their company, secondly the company that they
have together.
Current assets
When it comes to a company's classified balance sheets you will find current
assets sheet. Current assets is cash or cash equilivants that the company will
use. What you will find on a current asset sheet is Cash and equilvants, Short
term investments, Accounts receivables, and other assets.
Long-term investments
Long-term investments when it comes to balance sheet are investments that
the company intends to hold onto. The investments that are listed are as
follows, bonds, stocks and cash. You will also find short-term investments in
the company.
For Discussion Question 1: Post your response to the following:
 When reviewing a financial report, why should information be reliable, relevant,
consistent, and comparable?
 In other words, why are these accounting characteristics important?
 What kinds of problems could be created if a financial report is not reliable, relevant,
consistent, or comparable?
It is extremely vital that the company has accurate financial reporting. This
information determines whether or not to invest in your company's stock. This
information will help them decide if it is profitable to invest or not to invest in
your company based what is in your financial history. The information must
be relevant because it will help the company, investors and lenders make

3. decisions. It helps answer questions like, "how stable is your company", or
"what future does this company have".
Internal Cash Control
Accounting 220
Internal Cash Control
The accounting department receives from sales invoices once a month. Most of
the information is missing on the invoices.
The accounting department relies on each department within the company and all the
information has to be submitted completely and in a timely matter. In this scenario most of the
information that has been turned in has information that is missing on the invoices. I would say

4. that the internal controls that are not being followed are Documentation procedures. Company
documentation is very important and must be turned in complete. These documents show proof
of delivery or proof of services to the customer. Any incomplete documents can be very costly
and can cause a delay in the company being paid for any services rendered.

5. Material
Appendix B
Cash Management Matrix
Directions: Using the matrix, list how each of the principles of internal control works, and give an
example for each. Next, list how each of the principles of cash management works, and give an example
for each.
Principles of Internal Control How it Works Example
Establishment of responsibility Happens when the company assigns
one person to be in control of a
specific job or have authority to
make decisions.
My job, Our Sales department is
the only one that can waive a
restocking fee. It allows the Sales
team to be in control of the
customers returns
Segregation of duties This is when the company has more
than one person to control a task or
job
A church- You have people who
count the offering and then you have
someone who writes down and logs in
what was received
Documentation procedures Evidence or proof of all company
transactions
My job we deliver ship shingles to our
customers, and we make the driver
sign prior to leaving and we make the
customer sign a “Proof Of Delivery”
form
Income statement is a financial statement that shows how much money is coming from product
sales and services prior to any expenses being taken out. Both internal and external users such
as managers and investors are able to access this. For example, if a investor wanted to see if
the company made money or lost money they would use this financial statement report.
Balance sheet shows what condition the company is currently in. whereas the other financial
statements only came monthly or annually. For example, what if the management planning
team wanted to see the company's current assets, ownership equity and liabilities? All they
have to do is run the balance sheet report.
Discussion Question 1: Post your response to the following:
 How would you describe the difference between financial and managerial
accounting? What are the distinguishing features of managerial accounting?

6. There are many differences between financial and managerial accounting.
The financial accounting statements are available to external users such as
employees, stockholders, creditors, investors, etc. This is available to them so
that they can monitor the company's performances quarterly or annually.
Managerial accounting provides financial information for managers and other
internal people or department.
Cost, Volume, and Profit Formulas

7. Explain the components of cost-volume-profit analysis.
The components of cost volume-profit analysis consist of Level or volume of activity, Unit
Selling Price, Variable Cost per unit, total fixed costs, and Sales mix.
What does each of the components mean?
Level or volume of activity is the activity that causes change or behavior when it comes to
the cost. Unit selling Price is the cost for the product basically how much each unit is
selling for. The Variable Cost per unit is something that can change depending on the
activity. The total fixed cost does stay the same as activities change but differ per unit.
The Sales mix is basically what the name says. It’s a mixture of sale items when more
than one product sold the sales will remain the consistent.
Based on the formulas you have reviewed, what happens to contribution margin per
unit when unit selling prices increase?
Contribution margin is the amount of revenue left over after subtracting the variable cost. So
basically Unit sales price subtracting or minus variable cost.
Discussion Question 1: Post your response to the following:

8.  You know how important it is to create budgets for your household. How does
budgeting help management make good business decisions?
Budgeting is a very important skill that can be applied to everyday life and
also when it comes to making good business decisions. I really like the way
our class resources says about Budgeting. Budgeting is used as a planning
tool used by management to make good decision for the company. If a
company is successful than more than likely that means that the management
team is very good at managing the company finances. Budgeting helps
management plan ahead, defines what is most important, shows warning
signs, reach a company target without over or under budgeting and etc.