ACC 201 Project Guidelines and Rubric
ACC 201 Project Guidelines and Rubric
Competencies
In this project, you will demonstrate your mastery of the following competencies:
Record and present financial information by applying the appropriate framework and guidelines of accounting for business transactions
Determine asset accounts and their disclosure in the financial statements
Determine liability and equity accounts and their disclosure in the financial statements
Scenario
You were recently hired as an entry-level bookkeeper for a service corporation that just opened this month. Your first task is to record business transactions for its first month using the source documents and transaction data the company will provide to you. This corporation hasn’t set up its computerized accounting system yet, so you will apply the accounting cycle to record transactions and generate financial reporting results for the organization in Microsoft Excel.
Directions
Company Accounting Workbook
Use generally accepted accounting principles to follow and record your business transactions for a one-month period from the first step of the accounting cycle through the reporting process. You may build on the workbook you created in Milestones One and Two, or you may start over with the blank Company Accounting Workbook Template, which is linked in the What to Submit section below. Incorporate in instructor feedback where applicable. After you complete your workbook, you will prepare a summary report of your work.
Your completed accounting workbook will consist of journal entries for each transaction and postings of transactions to account ledgers. You will develop a trial balance from the ledger balances and use these balances to prepare the income statement, statement of stockholder’s equity, and the balance sheet. After the preparation of the financial statements, closing entries will be entered to transfer earnings to equity and prepare temporary accounts for the new accounting period.
Use the instructions below to complete your workbook. Specifically, you must address the following rubric criteria:
Record Financial Data: Use generally accepted accounting principles to accurately capture business transactions for the month in the Company Accounting Workbook Template using the data provided in the Accounting Data Appendix, which is linked in the Supporting Materials section below. You will need to address the following points:
Accuracy: Prepare entries that are accurate and fully reflect the appropriate information.
Completeness: Prepare entries that are complete for the month, including transferring posted entries to T accounts.
Unadjusted Trial Balance: Prepare the unadjusted trial balance portion of the Trial Balance tab of the Company Accounting Workbook, ensuring that the total debits and credits match.
Financial Statements: Create financial statements using appropriate methods based on accepted accounting principles. Be certain to prepare these financial statements in the order listed, as there are important interdependencies among them. Finalize the process by closing temporary accounts.
Income Statement: Prepare the income statement using the adjusted trial balance.
Statement of Stockholder’s Equity: Prepare the statement of stockholder’s equity using the adjusted trial balance.
Balance Sheet Assets: Prepare the balance sheet assets using the adjusted trial balance.
Balance Sheet Liabilities: Prepare the balance sheet liabilities using the adjusted trial balance.
Closing Entries: Complete the Closing Entries tab of the Company Accounting Workbook by closing all temporary income statement amounts to create closing entries.
Summary Report
After you have finished preparing all the financial statements, analyze the statements and write a short report summarizing your findings. Use the template provided in the What to Submit section below to complete your report. There is also a Final Project Walkthrough video available in Supporting Materials that provides guidance for completing your template. In addition to the financial statement results, the management has asked you to provide them with additional information as further growth is anticipated. They would like more input from you to support the best possible decisions for the business.
In addition, the management is asking you for some suggestions on simple internal controls they can integrate to ensure the protection of company assets and accuracy in the company’s financial data. The management is also considering acquiring more long-term fixed assets, such as vehicles, equipment, buildings, and so on. They would like your input on the different options available for depreciation of these costs. Adding sales of products is also a consideration for expansion. The management would like to know what accounting considerations will be involved with this change.
Summary: Write a summary of what the financial statements indicate about the company’s financial health and performance.
Purpose: Discuss the accounting process and the resulting financial statements as they relate to meeting the informational needs of the user.
Process: Explain the process used to produce accurate account balances and financial statements from the individual transaction data.
Consider what is being communicated through each of the financial statements you prepared (income statement, statement of equity and balance sheet) and how this information will be used in business decision making and planning.
Analysis: Explain the company’s cash position, its net income as a percentage of sales, and its current liabilities to current assets position using financial ratios.
Results: Discuss the results regarding profitability of the first month of operations.
Consider how well the company is positioned to meet current liabilities.
Be certain to include the percentage of revenues that result in profit or net income and the current ratio when discussing profitability and liquidity based on the recorded month’s results.certain to include the percentage of revenues that result in profit or net income and the current ratio when discussing profitability and liquidity based on the recorded month’s results.
Consider key points in your observations of results: Is the company operating profitably (what percent of revenues result in profit or net income)? How well-poised are they to meet liabilities (discuss liquidity and current ratio)?
Recommendations: Recommend a simple system of controls that can be implemented to ensure protection of company assets and the accuracy and integrity of its financial data as it anticipates further growth.
Consider additional controls that will support the potential for adding merchandise and additional assets with business growth or expansion.
Asset Valuation: Discuss the treatment of current and long-term assets on the balance sheet.
Discuss at least two different methods of depreciation. Consider how the methods of depreciation will be determined.
Discuss how LIFO, FIFO, and average methods will differ and provide examples of types of applicable merchandising.
Consider how accounting will change with the addition of merchandise inventory.
What to Submit
To complete this project, you must submit the following:
Company Accounting Workbook Template
Your workbook should be completed and submitted as a Microsoft Excel file based on the template provided.
Project Summary Report
Use this template to submit a 1- to 2-page Microsoft Word document summarizing the financial statements you created.
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