To begin, reread the Course Learning Objectives we have covered in class which a

Question

To begin, reread the Course Learning Objectives we have covered in class which are as follows: Describe the nature and purpose of financial accounting. Record transactions and prepare financial statements (income statement, statement of owner’s equity, balance sheet) for a sole proprietorship. Implement the proper accounting procedures for a merchandising company that carries inventory. Implement the proper accounting procedures for current assets. Implement the proper accounting procedures for long-term assets. For your main discussion post, reflect on your learning throughout the course and answer the following questions: Of the above Course Learning Objectives, which has had the most and which has had the least impact on your learning? Elaborate your response. How will you apply what you have learned in this class as a foundation for learning in other courses? Explain. Do the concepts and skills learned in this class be helpful to you in your career? Describe.

Explanation / Answer

We know that financial accounting is very helpful for a business entity because it helps in proper recording of the monetary transactions of a firm. Thus we can say that financial accounting is the language of the business and it provides relevant financial information to the various stakeholders.

We also know that sole proprietorship is also a very important type of business form and this type of business organization also requires proper financial recording such as preparation of income statement, statement of owner’s equity and balance sheet etc.

Now let’s come to the main point “proper accounting procedures for a merchandising company that carries inventory”.

Suppose if a company is a mercandising company then sale and purchase of mercandise will be treated as routine business activity of that company hence purchase of mercandise will be treated as the normal expense and sale of such mercandise will be treated as normal revenues for that company. Any unsold mercandise will be treated as inventory and we know that inventory is a current assets so unsold mercandise will be shown as current assets for the company.

So we know that current assets may be like; cash, account receivables, debtors, bank balance etc. apart from this long-term assets means fixed assets that are kept for long-term use in the company like; buildings, plant, machine etc.

So recording of current assets are done in the balance sheet of the company and long-term assets are also recording in the balance sheet. But one main point must be kept in mind that some time some long-term assets may be current assets for a particular company like; if a company is involve in buying and selling of building then unsold buildings will be current assets of that company but for other company building will be long-term assets.

So it is clear that proper accounting procedures is followed for all nature of business activities whether it is sole proprietorship, partnership firm, company or mercandise company etc. Thus recording of current assets start with the recording in journal, posting in T account, preparation of trail balance, preparation of income statement, preparation of owner’s equity and in the balance sheet as well. So it is true that proper accounting procedure is followed for all types of business entities.

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