ACC 421 All DQs

Week 1

Discussion Questions

What are the major objectives of financial reporting? Who uses financial reporting? What type of information will each user group need? Why?

What is the purpose of generally accepted accounting principles (GAAP) and the accounting cycle? Is it possible to deviate from GAAP and the accounting cycle and still prepare financial statements? Why? What are some possible consequences of this course of action?

What organizations are responsible for governing financial reporting? What is the role of each organization? How have the roles changed in the last 20 years? How might their roles change in the next 20 years?

Week 2

Discussion Questions

What are different criteria for recognizing revenue? Why are there so many revenue recognition methods? Why are the methods subjective, and what are the implications on income statement quality?

What are the differences between regular and irregular items on an income statement? What are the requirements for items to qualify as irregular? What are some examples of irregular items? What is the effect of irregular items on an investors analysis of a company?

What is included in other comprehensive income? Why are items included in other comprehensive income, but not included in net income? Should these items be included in net income or not included at all? Explain your answer.

Week 3

Discussion Questions

What information is contained in the balance sheet? What are limitations of the balance sheet? How can balance sheet limitations be overcome?

What does full disclosure mean? How does full disclosure affect financial reporting? Are there any ethical implications to what must be reported in order to comply with full disclosure? Explain. What recommendations would you make to management regarding what must be disclosed?

What information is provided in the auditors report? Does the audit report offer any guarantees? Explain. What do you think the general public believes the auditors are providing in the audit report?

Week 4

Discussion Questions

What does a statement of cash flows tell you about a company? Why is the statement of cash flows important? Can a company have profits but no cash? Why?

What is included in each section of the statement of cash flows? What does each section tell you about a company? Which of the three classifications of activities included on a statement of cash flows is the most important? Why?

What are the differences between the direct and indirect method of presenting a statement of cash flows? Which method of presenting a statement of cash flows is the best? Why? How does the statement of cash flows relate to the other financial statements?

Week 5

Discussion Questions

What is the time value of money (TVM)? Why is this concept important in accounting? Under what circumstances might we use TVM calculations?

When might we use present value calculations? When might we use future value calculations? Which is more likely to be used in accounting? Why?

What effect do interest rates have on the calculation of future and present value? How does the length of time affect future and present value? How do these two factors correlate?