Although this is a very short section in the weekly

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Chapter 9 / Exercise 8
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Although this is a very short section in the weekly reading assignment, the discussion of ethics in regards to financial recording in the workplace is the result of this topic. With discussion in the media and current events surrounding unethical practices, businesses must be aware of factors that may confuse those that review their financial records. Ethics is not always the factor that would hamper the quality of earnings. The application of different generally accepted accounting practices by companies in the same industry may result in financial statements that will confuse reviewers if they compare the two. This is known as alternative accounting methods. Managers that receive high pressure to increase revenue may find themselves ‘channel stuffing’ or creating incentives to increase revenues in one reporting period but will have a hard time meeting future expectations. This practice is known as improper recognition. Companies may also practice improper capitalization of operating expenses by under-stating liabilities. Some transactions are so transparent that it is hard for reviewers to tell just how the company is doing financially. The cash flow statement is one of the most fundamental financial statements. The cash flow statement gives a detailed record of a company's earnings and expenses. The cash flow
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New Perspectives Microsoft Office 365 & Excel 2019 Comprehensive
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New Perspectives Microsoft Office 365 & Excel 2019 Comprehensive
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79 statement also usually separates cash flow activities into three categories: operating, financing, and investing (Weygandt, Kimmel, and Kieso, 2012). The cash flow statement can be prepared using either the direct or indirect method and while both methods deliver the same results they use different procedures to determine cash flow from operating finances. The statement of cash flows prepared with the indirect method starts with net income and then adds or subtracts items to arrive at net cash provided by operating activities. There are three types of required adjustments: 1) noncash charges such as depreciation, amortization, and depletion, 2) gains and losses on the sale of plant assets, 3) changes in noncash current asset and current liability accounts. Many companies choose to prepare their cash flow statements using the indirect method because accrual accounting provides a better measure of how the company functions. The indirect method also tends to be less complex (Saint-Leger, n.d.). ReferencesSaint-Leger. (n.d.). The Advantages of Preparing a Cash Flow Statement Using the Direct Method. Retrieved from -statement-using-direct-method-23694.html Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2010). Financial accounting (7th ed.). Hoboken, NJ: John Wiley & Sons.
80 ACC 291 University of Phoenix Weekly Summary (Week 4) 3 Options to Choose From or Mix and Match Quality Work Do not copy directly. Please use as a guide. Come back for more.

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