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Suppose your group is opening a Billabong office in your area. You must make some important decisions-where to locate, how to advertise, and so on-and you must also make some accounting decisions. For example, how often will you need financial statements to evaluate operating performance and financial position?
Will you use the cash basis or the accrual basis? When will you account for the revenue that the business earns? How will you account for the expenses? Required
Write a report to address the following considerations: a) Will you use the cash basis or the accrual basis of accounting? Give a complete description of your reasoning.b) How often do you want financial statements? Why? Discuss how you will use each financial statement.c) What kind of revenue will you earn? When will you record it as revenue? How will you decide when to record the revenue?
Financial Statement Analysis and Preparation
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T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .
Computation of Free Cash Flow
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