This would be important for accounts receivable - money that is owed by a customer for products/services. Representing a company in small claims court requires one to be familiar with the law and how it relates to accounting practices. In the Mack v. Edenwold Fertilizer Services Ltd. case, if Mack had a knowledgeable accountant that was familiar with the law, he may have been advised not to sue as the illegality of the situation would have resulted in a loss. In turn, this advise would have saved Mack both time and
The importance of revenue is that tells you how much money overall is coming into the business and subtracting the costs you can see what your overall profit is. An increase in revenue could also lead to more investments back into the business, for example by staff training, extending a department etc. A decrease in revenue will mean a decrease in profit, and probably having to cut budgets. If Shafal doesn’t cover her expensive her business shut down. The way revenue helps the business is a by money coming in from different areas such as rent.
Some may wish to have the customer do a down payment for the service and pay the rest on the upcoming due date. Be sure to either stamp, highlight or circle the due date with the customer present so they can see it. You can also contact the customer via telephone, mail or email and give them a friendly reminder about a week before the invoice is due. Being that bills are sent out in a timely manner this reminder will help them remember just in case it slipped their minds. Some people have several bills due on the same day so it is
How might a company be rewarded or punished for making an ethical or unethical decision? DQ 3: Review the case study “It Seems Right in Theory but Does It Work in Practice?” in Perspectives in Business Ethics. How is ethical theory applied in practice? DQ 4: Review the case study “Where and Why Did Business Ethicists Go Wrong? The Case of Dow Corning Corporation’ in Perspectives in Business ethics.
It will help the management to judge reasons for losses and help to control it. It will discourage employees from committing frauds. Bankers can place reliance on audited financial statement while making decision about credit worthiness of loan applicants. Audited statements enhance the reliability of computations of income earned by entity, thus help in determining income tax. In addition, prospective investors, on the basis of past years audited financial statements, can device the expected profits trends for deciding whether to invest in the entity or
What is the project’s net present value? When attempting to finance a project, it is important to know the financial health of the company. The net present value aids with analyzing the profitability of a project. It demonstrates the difference between the present value of the cash inflows and the cash outflows (Titman, Keown, & Martin, 2011). When a negative net present value is obtained, it is a sure indicator that the firm should not continue to invest in a project.
Since the Walton Work Wear line is in the production stage, its accumulated development costs should be capitalized. The Carroway Cool Top has not started it commercial production which would allow the development costs not to be amortized yet. Also interest costs on loans to generate financing for the R&D activates of a product can be capitalized rather than expensed. The capitalization of interest would allow CCL to reduce taxable income in the future when it is more profitable. I would recommend that CCL make the above changes immediately so that the financail statements are not incorrect.
A more difficult and time consuming effort Huffman could take to reduce exchange rate risk is to spin the rate to your advantage (Prinzel, 2013). This means when USD exchange rates are high, Huffman would need to ensure their customers are aware of the benefits they could be receiving in discounts. Relative to Huffman Trucking’s benefit with this approach, they could buy foreign exchanges when rates are low, similarly taking advantage of the same benefits their customers would
Essentially, he would like them to oversell their customers. For instance, a salesperson should attempt to convince a customer that he needs an $8,000 copier, even if a $4,000 copier would satisfy his needs. Your boss explains that customers will still be receiving what they need. Albeit perhaps a little more, and the company will reap greater profits, resulting in larger bonuses for your salespeople. What would you do and why?
When companies can produce more due to demand they are able to hire more workers, which can lower the unemployment rate. Lowering the unemployment rate will provide more income tax revenue to the government and fewer citizens taking unemployment benefits. Conversely, when exports decrease consumers pay less money for products causing domestic profits to decline and companies are unable to maintain or increase their workforce causing the unemployment rate to