M1 A2 (RW) Response

Response only needs to be 2 paragraphs with 1 reference:
Original Posting:

Assignment 2: Discussion—Understanding Financial Statements
In this assignment, you will learn to read and interpret financial statements. Understanding the four financial statements provided in the lectures and reading for this week and dealing with a company’s financial performance is critical to making decisions about its management and its relation to the global economy and financial markets.

Don't use plagiarized sources. Get Your Custom Essay on
M1 A2 (RW) Response
Just from $13/Page
Order Essay

Put the following income statement and balance sheet terms (general ledger accounts) in the proper order for properly prepared financial statements:
Taxes, interest, gross profit, selling, general and administrative expenses, sales, depreciation, net income, cost of goods sold, EBITDA.
Put the following balance sheet terms (general ledger accounts) in the appropriate category as either short-term assets, long-term assets, short-term liabilities, long-term liabilities, and/or owner’s equity for properly prepared financial statements:
Cash, accounts payable, accruals, property, plant and equipment, inventory, accounts receivables, paid in capital, retained earnings, notes payable, mortgage, accounts payable.
In terms of McGladrey and Pullen’s Reading & understanding financial statements: A guide to financial reporting, explain the balance sheet equation

Student Response:

Income Statement
Cost of goods sold
Gross profit
Selling, general and administrative expense
Net Income
Balance Sheet
Short-term assets: Inventory, accounts receivable, cash.
Long-term assets: Property, plant and equipment,
Short-term liabilities: Accounts payable, notes payable, accruals.
Long-term liabilities: Mortgage.
Owner’s equity: Pain-in capital, retained earnings.
            The balance sheet incorporates the three-vital aspect of a business, namely asset, liability and equity, to provide users with a complete overview of the Company’s net worth as at a certain point in time. All the transactions that a business goes through are recorded in general ledgers and the remaining balance at the year-end are transferred to the balance sheet as either an asset, liability or equity. Hence any transaction will eventually be translated to one of the three categories on the balance sheet (Ward, 2017).
            The first category on the balance sheet is the asset. This includes both long-term and short-term assets and provides the user information relating to the tangible and intangible resources that is utilized by the company to operate and turn a profit (Riggs, 2007). The long-term assets represent financial resources to be utilized by the company over a long period of time and therefore, these will not be converted into cash but rather depreciated over their useful lives.  Some of the long-term assets include freehold land, plant and equipment etc. The short-term assets represent assets which will be converted into cash or other financial assets within the financial year and includes items such as inventory which is subsequently converted into accounts receivable and finally into cash. The cash balance of a company is highly sensitive and requires constant monitoring for the company’s overall financial health (Newhouse, 2010).
            The liabilities section allows the user to observe items that the company owes to various vendors of the company. The long-term liabilities represent loans and other long-term commitments made by the company and are usually used to finance long-term business assets or financing for new business projects. The short-term liabilities represent the amount owed by the company to various operational vendors which need to be cleared in less than one years time. This includes trade payables, rent accruals etc. (Newhouse, 2010).
            The final section is the owner’s equity. This represents the portion that the shareholders of the company own. In summary, this includes the initial investment paid-in by the owners represented by the paid-up capital amount and also includes the retained earnings amount which represents the overall profit remaining within the business after the owners have taken out their dividends (Riggs, 2007).
            Overall, the above three sections make up the equation “Asset = Capital + Liability”, which is what the balance sheet represents.
Newhouse, C. (2010). “Understanding the Balance Sheet” ABC Amega. Retrieved from URLhttp://www.abc-amega.com/articles/credit-management/understanding-the-balance-sheet 
Riggs, H. E. (2007). “Understanding the financial score” San Rafael, Calif.: Morgan & Claypool Publishers.
Ward, S. (2017). “Balance Sheet Definition and Examples” The Balance. Retrieved from URLhttps://www.thebalance.com/balance-sheet-definition-2946947


Response only needs to be 2 paragraphs with 1 reference:

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Live Chat 1 763 309 4299EmailWhatsApp

Order your essay today and save 15% with the discount code GINGER