An accounting assignment need help!


D

damaochuixiao

Write an essay of 1000 words (excluding references) on the following
topic:
Discuss the following statement, which was made by the owner of a
small business to their accountant:
"Given that my business made a profit this year, why is there not
enough money in the business bank account for me to withdraw for
personal use?"


Can anyone give me some suggestion how should I start this essay and
what point do I have to mention? e.g accrual basis, account receivable
and inventory??

Thanks
 
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P

Paul Thomas

Write an essay of 1000 words (excluding references) on the following
topic:
Discuss the following statement, which was made by the owner of a
small business to their accountant:
"Given that my business made a profit this year, why is there not
enough money in the business bank account for me to withdraw for
personal use?"


Can anyone give me some suggestion how should I start this essay and
what point do I have to mention? e.g accrual basis, account receivable
and inventory??



Well, you've hit on a couple of points already that would more than fill the
1000 words.

You can look at equipment purchases, debt reduction, and other items that
impact cash but not the income statement.
 
R

Rocinante

Write an essay of 1000 words (excluding references) on the following
topic:
Discuss the following statement, which was made by the owner of a
small business to their accountant:
"Given that my business made a profit this year, why is there not
enough money in the business bank account for me to withdraw for
personal use?"


Can anyone give me some suggestion how should I start this essay and
what point do I have to mention? e.g accrual basis, account receivable
and inventory??

Thanks
Cash flow would be the thesis. Teachers like charts. Set up hypothetical
income and cash-flow statements and discuss them. They can be simplified.
These financial statements will serve as your outline for the paper.
 
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B

Bunny

Cash flow would be the thesis. Teachers like charts. Set up hypothetical
income and cash-flow statements and discuss them. They can be simplified.
These financial statements will serve as your outline for the paper.

--
"Think much, Speak little, Write less."

(e-mail address removed)
7/29/2007 6:41:21 PM
Cash Flow is the issue alright. High growth = Low Cash but this is not
always such a bad thing if you have a plan or compensate somehow.
Increased cash generation is the goal here? Good debt management,
bargain for interest rates, search for a new partner, asset disposal,
tax avenues, and what is the Accounts Receivable turnover like?
 

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