Finance and Accounting Homework Essay Example | Topics and Well Written Essays - 1500 words

Finance and Accounting Homework - Essay ExampleCost is a crucial aspect, and it facilitates realization of defined results in verifiable and objective amount. The matching of this accounting concept is unremarkably facilitated in dress to ensure that there is an accomplishment of radical goals within the depreciation expense parameters. Lump sum purchases should be treated in a way that plants asset profitable life is well analyzed in a way that reflects all the revenues imperatively in the income statement (Tsuji & Fujibayashi, 2011). Purchases that the organization exercises should be subjected in going appertain assumption. This is in order to ensure that there is attainment and realization of integral goals as per the laid down accounting and finance principles and policies in the organization. Revenue realization principle in many scenarios usually limits an organization from reflecting on mechanisms of holding any asset from the plant. Cost principle should be differentia ted in confused ways in accordance to the equipments in the organization (Tsuji & Fujibayashi, 2011). 2 Factoring is an important nest in every organization cash flow spheres. corporation management clear opt to sell all its accounts receivable to the third party at a discounted manner for the sake of exchanging money. The third party in this case is usually any financial institution or bank. The third party which purchases all accounts receivable has to remain significant and resourceful in order for all the transactions to be viable and beneficial. Receivable factoring has been posited as a simple commercial financing (Khazeh & Winder, 2006). When a company chooses a effrontery option the management needs to utter on analysis of the important factor. in that respect are various factors that should be reviewed routinely accounts receivables. Accounts receivable needs to articulate on measures on how a company can convert cash on hand. Most business entrepreneurs have busine ss ideas that turn accounts receivables into cash (Khazeh & Winder, 2006). There are various types of reasons through which company implements receivables in its accounting books. Therefore, it is usually looked as an effective asset to investors and investors. Organizations articulate on ways through which accounts receivables can be converted into cash without causing problems to business progress. Organizations have been articulating on various types of conversion that are used for implemented balance sheet. Managers in these organizations unceasingly analyze receivables in comparison with small business owners (Khazeh & Winder, 2006). 3 A contingent liability has been a potential liability, and it wholly depends on a early event that occurs. In accounting and finance, a contingent liability and loss are usually recorded through the use of diary entry approach especially where contingency is estimated and probable. There are three examples of contingent liabilities known as th e lawsuits that are filed against a company, warranty of the organization and guarantee of another partys loan (Colquitt, McCullough & Sommer, 2011). Circumstances whereby a liability and also related contingency are possible (not probable) a journal entry for the event is usually not required. Disclosure is not required in this case scenario. In approaches whereby a contingent liability has been proved to be remote, both the disclosure and the journal are not required in the accounting activity. A