Sunday, February 23, 2020

Accounting Essay Example | Topics and Well Written Essays - 250 words - 1

Accounting - Essay Example The information contained in financial reporting must be both relevant and reliable to the user – relevant data must be recent enough to be useful and be confirmed in the future as well as confirm older data, and reliable in that different users are able to use the same information to come to similar, if not the same, conclusions about the company’s economic status, and unaffected by our own concerns within the business. (36) The latter means that no one is permitted to skew information’s presentation to better our image, so that the data is dependable for any user, whether internal or external. The information in financial reporting must also be comparable to other companies in our industry – if a practice is normally used, we should use it also so that it is easier for investors to read our reports – and consistent. (37) Should an accounting practice change, it needs to be very clearly stated and if necessary, we should adjust former periods’ information so that the impact of the change is easily discerned. Consistency is a critical attribute for us to demonstrate, so that users are able to watch the trends of our company’s success without worrying that we adjust accounting practices to improve the bottom line when having difficulties, and comparability is so that users are able to compare us to our other industry members. A last feature of the above information is the ‘matching principle’ that is required by U.S. GAAP. The matching principle is a simple rule – any expenses incurred in the current period must be matched to any revenues incurred in the current period. (45) This is a component of when we recognize revenue, and has a direct impact on the balance sheet. The above information should be helpful in understanding how our accounting practices work, and why they are so important for our investors and creditors. If

Friday, February 7, 2020

Business Research Report Paper Example | Topics and Well Written Essays - 1000 words

Business Report - Research Paper Example Harvey Norman barely survived with impending lawsuits and losses experienced from giving out very high discounts to attract customers. The Reject Shop on the other hand posted a good increase in profits and sales in that year. The company opened 18 new stores in that year and was able to repay much of its debts (Roth, 2013). The Reject Shop can sustain a downturn in the economy because its average unit price is A$9.00 (in 2011). As of today, the unit price is A$10.04. Even if the domestic market failed, The Reject Shop would probably survive (Greenblat, 2011). In an attempt to avoid losses and survive in the industry, the Harvey Norman Holdings Limited misled their customers by false advertisements. The federal court hit the company with a $1.25 million fine. The judge ruled in favor of the Australian Competition and Consumer commission saying that the company deliberately and blatantly disregarded the truth while conducting a calculated and misleading campaign (Appliance Retailer, 2012, p.4). The Reject Shop has not been involved in such bad publicity. When the industry domestic market was low in 2012, The Reject Shop suffered some loss like all the other retail companies but did not do illegal stuff to make more money. Metrics is the first thing looked at with any investment. The Reject Shop has a return on equity of more than 40 per cent for every year in its corporate life (Greenblat, 2011). Its debt is little or none existent and it is maintaining its return on equity despite its equity growing. This means that The Reject Shop is a good investment. The return on equity combined with little or no debt signals that the company has a strong competitive advantage. Moreover, a poll showed that 90 per cent of consumers knew about The Reject Shop. This means that the market’s place strong position and the brand awareness support the return in equity. In the recent years, its equity has risen threefold while its profits have