acc 291 week 5 learning team reflection

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Learning Team Reflection

Teresa Watkins

ACC 291

January 24, 2014

Michael Bluvas



The objectives overview for week four and five are discussed here below. We discuss

how cash flows, ratios, journal entries, payment dividends, and the unethical behaviors of people

and the importance of the Sarbanes-Oxley Act, all relate to a business and there uses. There are

two main methods of organizing the cash of any business and those methods are the direct and

indirect methods of cash flow statements. These two methods are to help separate the revenue in

and the revenue out, which in other words would be considered cash or expenses. In the direct

method the business owner would have to make sure to determine what their cash and what may

be expenses within that business. The direct method is to help the business understand the major

sections of the cash flow statements and also what the total gross of the cash receipts and

payments are for that business. One main thing about the direct method is that if the taxes are

paid and it directly affects the cash flow then the method of the transaction is the direct method.

However on the other hand in the indirect method of the any business is when an increase or

decrease of the company’s assets affecting the net income. This means that the indirect method

has mostly to do with the net income of the business and it has to separate the revenue that does

not reflect on the cash flow statement. This also means that in this method the entries that do not

affect the cash flow are subtracted and the entries that do affect the cash flow are added to reflect

the cash flow.

In accounting there are three different analyses’ that aid in analyzing financial statements

and they are ratio, vertical, and horizontal analysis. Ratio analysis expresses the connection

between chosen financial statement data. The vertical analysis conveys each item within a

financial statement as a percent of a base amount. Horizontal analysis evaluates a cycle of

financial statement information over a period of time to establish the increase that has taken

place articulated as an amount or a percentage.



Intra- and inter- company comparisons are used by vertical analysis. Horizontal analysis

is used within intra-company comparisons primarily. Within these comparisons statements are

show comparative financial data for a minimum of two years. Then a review of the data is

presented for a series of five to ten years plus.

acc 291 week 5 learning team reflection

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