Basic College Accounting

What is an Adjusted Trial Balance and Adjusting Journal Entry

Fri, 18 Dec 2015 13:24:28 +0000

We understand what is a trial balance. But what then is an Adjusted Trial Balance?

An adjusted trial balance is a trial balance taken from the general ledger accounts after ADJUSTING JOURNAL ENTRIES but before CLOSING ENTRIES have been posted.

Adjusting journal entry is the record made of an accounting transaction giving effect to the correction of an error, an accrual, a write off, a provision for bad debts or depreciation,etc

It is important to understand what is an adjusted trial balance because this is a frequently asked bookkeeping topics whereby examiners will always give the candidates the initial trial balance and them items on adjusting journal entry to prepare the adjusted trial balance

What are the advantages and disadvantages of using Common Stock Financing from the viewpoint of the Corporation

Sat, 25 May 2013 07:15:54 +0000

The advantages of using stock financing are:

Common stock does not obligate the firm to make fixed payments to stockholders

Carries no fixed maturity date

Increases the creditworthiness of the firm thus increasing the future availability of debt at a lower cost

Can often be sold more easily than debt if the firm’s prospects look potentially good but risky and

Financing with common stock serves as a reserve of borrowing capacity

The disadvantages of common stock financing to the corporation:

Issuing common stock extends voting rights and perhaps even control, to new stockholders

Gives new stockholders the right to a percentage of profits rather than to a fixed payment in the case of creditors

The cost of underwriting and distributing common stock is high

If common stock is sold to the point where the equity ratio exceeds that in the optimal capital structure, a firm’s average cost of capital will increase and its stock price will not be maximized and

Dividends paid to stockholders are not tax deductible as is interest paid to creditors.

In an organization, briefly explain the benefits or advantages and disadvantages of decentralization

Tue, 21 May 2013 09:01:17 +0000

Benefits or advantages of decentralization:

Easier for senior management to delegate responsibility if the enterprise is split into divisions. By delegating responsibility, the managers might be motivated to work harder

Decisions will be made more quickly as the divisional managers will not need to send information up to top management and then wait for instructions to be passed down.

Divisional managers will make better decisions than centralized management as they are closer to the daily operation of the business

Top management will be free to concentrate on strategic issues.

Easier to monitor the performance of products and or regions if the business is divisionalized on product and or regional lines

Easier to allocate resources to a division than to a product or region which is contained within a centralized structure

Easier to expand, close or move a division.

In brief, decentralization assists top management in improving motivation, quicker communication, better control and faster or quicker decision-making.

The main challenge or disadvantage of decentralization is:

Get all the divisional managers to work for the advantage of the group as a whole. Especially if divisional managers receives performance-related pay hence they may put the needs of their own division ahead of the group. Even without performance-related rewards, they may take decisions which seem sensible from a divisional point of view but not good for the group as a whole.

Explain the ROLE AND TASKS of Recruitment Consultant

Fri, 17 May 2013 09:05:53 +0000

Role of recruitment consultant:

· To perform the staffing function on behalf of the management of the client organization re: filling vacancies with the type and calibre of staff required

Tasks of a Recruitment consultant normally includes the following:

Analysing, or being informed of, the requirements-the demands of the post, the organization’s preferences for qualifications, personality and so on;

Assist to draw up, or offering advice on , job descriptions, person specifications and other recruitment and selection aids;

Designing job advertisements;

Screening applications, so that those most obviously unsuitable are weeded out immediately;

Assist with short-listing for interview;

Advising on the constitution and procedures of the interview;

Offering a list of suitable candidates with notes and recommendations.

The tasks will depend on whether the consultant is employed to perform the necessary tasks or merely to advise and recommend.

In Personnel Management,do you think that labour turnover has any advantages to an organization? List a few potential advantages

Thu, 16 May 2013 04:54:47 +0000

Potential advantages on labour turnover in an organization might include the following:

Opportunities for an organization to inject “ NEW BLOOD ” . New people brings new ideas and outlook, new skills and experience in different situation. ABSENCE of this might create an increasingly AGED workforce;

Creation of opportunities for PROMOTION AND SUCCESSION. Absence of this means junior staff and management facing a long career without development,waiting for someone higher up the ladder to retire, with no incentives or encouragement to ambition;

Ability to COPE WITH LABOR SURPLUSES in some grades of job without having to make redundancies. Natural wastage can save industrial relations problems in this way.

In Personnel Management, explain what is 360-degree feedback and give the advantages and any pitfalls of this type of feedback?

Wed, 15 May 2013 06:04:18 +0000

360-degree feedback:

Also known as “multi-rater instruments” and “multi-source assessment”

Unlike traditional basis where it recognizes that the employee’s immediate boss is not the only or necessarily the best person to assess his or her performance.

Designed to enable all the stake-holders in a person’s performance to comment and give feedback which includes the current ( and perhaps previous) boss (including temporary supervisors),peers and co-workers, subordinates and even external customers. Finally the employee’s own self-assessment is added and compared.

Normally this information is usually collected (anonymously) through questionnaires either on paper or on disk.

The ADVANTAGES of 360-degree feedback:

Highlights every aspect of the individual’s performance, and allows comparison of the individual’s self-assessment with the views of others (rather revealing in most cases)

Feedback tends, overall to be balanced, covering strength s in some areas with weaknesses in others so it is less discouraging and

The assessment is based on the real, normal work environment and circumstances-not artificial ( eg interviews) situations or isolated incidents. Therefore, feedback felt to be fairer and more relevant making it easier for employees to accept the assessment and the need for change and development

The PITFALLS of 360-degree feedback to avoid:-

Negative emphasis: feedback on weaknesses should be balanced by positive feedback on strengths and potential, to encourage the employee to develop;

A “flavour of the month approach” where the technique and its results are seen as interesting- but no thought has been given to follow-up action;

Lack of confidentiality. Respondents must be anonymous or they may fear to tell the truth in an assessment especially of a boss

Poor communication of the purpose of the exercise. It can be daunting and employee need to understand that it is not a political exercise or “rod” to beat anyone with: they are not been asked to become whistle-blower on anyone

Lack of action and support- organization need to support the employee in the development suggested by the feedback.

Tabulate below what are some of the Common goals business organizations aim to achieve when seeking strategic alliance

Tue, 14 May 2013 05:05:56 +0000

Common Goals a business organization aim to achieve when seeking strategic alliance:

Cost savings

Increased market share

Financial stability

Supply chain improvement

Increased productivity

Better competencies and skills

Technological sophiscation

Improved customer services

Explain what is Strategic Alliance and the major reasons for seeking such alliances.

Tue, 14 May 2013 03:52:28 +0000

The following explains what is strategic alliance and the major reasons for seeking it:

Strategic Alliance:

A long term agreement between two or more firms for a certain period of time to achieve mutual benefits

Partners agree to cooperate in carrying out business activities to create new strength and capabilities

Some of the major reasons for seeking strategic alliances:

1. Improve production efficiency

2. Gain access to new technology

3. Gain access to new market segments

4. Build credibility and brand awareness in the industry

5. Improve their competitive position in the industry

6. Increase their capital for new product development

7. Lower risks for Research and Development

8. Exploit partner’s skills and assets

9. Overcome protection barriers

10. Achieve economies of scales

Explain briefly what is Mercantilism Theory in International Trade

Sat, 11 May 2013 09:48:08 +0000

Append below a table to briefly explain what is Mercantilism Theory:

Mercantilism Theory:

A political economy system developed in the 16^th century by the European states to enrich their nations

Aimed at generating wealth by limiting imports and encouraging exports

Under such theory, the economic growth of a country was managed through International Trade to serve the country’s merchants and entities.

Example like the British East India Companies whereby their activities were protected by the country. Somewhat like Merchant Capitalism which relied very heavily on Protectionism.

In International Trade, what are the some of the level of regional integration and briefly explain them

Sat, 11 May 2013 09:39:14 +0000

In International Trade, there are several level of regional integration which are as follows:

1. Free Trade Area

2. Preferential Trade Agreement

3. Common Market

4. Custom Union

5. Economic Union

6. Political Union

FREE TRADE AREA ( FTA):

An agreement between two or more countries to remove all trade barriers between themselves.

Each country determines its own barriers and maintains its own external tariffs on imports against non-members. Examples of tariffs and non-tariffs barriers are quotas and subsidies on international trade in goods and services

Examples of Free Trade Areas are the ASEAN Free Trade Agreement (AFTA) and the North American Free Trade Area (NAFTA)

PREFERENTIAL TRADE AGREEMENT (PTA):

An agreement which offers member countries tariff reductions in certain product categories

An unilateral relationship, as tariffs would be reduced only in one direction

Note that discrimination or preferential treatment for some countries is not allowed as it is against the principle of Most Favoured Nation (MFN) under the WTO.

COMMON MARKET:

An agreement between two or more countries to remove all barriers to trade and allow free mobility of capital and labour across member countries

Helps to harmonize trade policies by having common external tariffs against non-members.

Example of a common market is the former European Economic Community (EEC) which was established in 1957 and is now known as European Union (EU)

CUSTOMS UNION:

An agreement between two or more countries to remove tariffs between themselves and set a common external tariff on imports from non-member countries

Member countries agree on a tariff across industries.

Has common policies on product regulations and movement of factors of production in goods, services, capital and labour among members

Contrast to a free trade area where each country determines its own barriers, members in Custom Union have common policies on external tariffs against non-members

ECONOMIC UNION:

An agreement between two or more countries to remove barriers to trade, allow free flow of labor and capital and to coordinate economic policies

Sets trade policies through common external tariffs on non-members.

Here, integration is more intense than a common mart where member countries are required to harmonize their tax, monetary and fiscal policies and to create a common currency.

Example is the European Union (EU) where economic and monetary integration has created a single market with a common currency the EURO.

POLITICAL UNION:

An agreement between more than two countries to coordinate their economic, monetary and political systems.

Members here are required to accept a common stance on economic and political policies against non-members. ( However, nations are allowed some degree of freedom in setting certain political and economic policies within their territories.