An article in Accounting Today from September 7, 2017, has the headline “Internal control weaknesses correlate with financial fraud.” Three accounting researchers* have found that “…the incidence of fraud disclosures at companies previously found by auditors to have material weaknesses in their internal controls is approximately 80 to 90 percent greater than companies on average, […]
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Tag Archives: financial accounting
Would Subway have disclosed or accrued for the class-action lawsuit filed against it for the length of its footlong subs?
September 5, 2017 
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Nine Subway customers joined forces to file a class-action lawsuit against Subway, alleging that its footlong submarine sandwiches were not actually a foot, or 12 inches, in length, but were closer to 11 inches. The class action suit was filed in 2013 and Subway settled a few years later, agreeing to pay the plaintiffs’ attorneys […]
Continue readingWhat is the impact on Netflix’s assets, liabilities, and equity from its new credit line?
August 30, 2017 0 Comments
In July 2017, Netflix, Inc., (NASDAQ: NFLX) obtained a new credit line for $500 million through five lenders. This credit line means that Netflix will be able to borrow as it needs cash to fund its operations. According to Netflix’s regulatory filing, it plans to use the funds for operations and general corporate needs. The […]
Continue readingWhat information is provided in McDonald’s basic financial statements?
August 22, 2017 0 Comments
McDonald’s Corporation (NYSE: MCD) is a publicly held corporation with more than $31 billion in assets. It started in 1940 as a BBQ restaurant in San Bernardino, California. In 1948, McDonald’s switched to burgers, shakes, potato chips, and pie. Its Golden Arches are generally believed to be the most recognized symbol in the world. To […]
Continue readingNEW! Create Customized Financial Accounting Case Assignments with the Accounting Case Template
August 11, 2017 4 Comments
The Accounting Case Template (ACT) is a web tool I designed that allows instructors to quickly build an introductory financial accounting case assignment. A variety of options are provided from which the instructor can choose, allowing the instructor to quickly build a case assignment customized for his/her specific course. It takes about two minutes to […]
Continue readingCh 01 Financial statements, Ch 02 Transaction analysis, Ch 03 Accrual income, Ch 04 Internal control and cash, Ch 05 Receivables and revenues, Ch 06 Inventory & COGS, Ch 07 PP&E and Intangibles, Ch 09 Long-term liabilities, Ch 10 Stockholders' equity, Ch 12 Financial statement analysis, Financial accounting
Do cash dividends paid affect a company’s breakeven point?
August 1, 2017 0 Comments
A recent blog posting for the Wall Street Journal had the headline “Big Oil Reaches for a Modest Goal: Breaking Even – Energy Journal[1].” The article stated that the “two-year slump in oil prices led…[big oil companies]…to rein in spending and lay off workers but the firms still didn’t make enough money in 2016 to […]
Continue readingHow should AmTrust have accounted for the sales of its extended warranty plans to avoid restating three years of financial statements?
July 25, 2017 0 Comments
AmTrust Financial Services, Inc., (NASDAQ: AFSI) is a multinational property and casualty insurance company headquartered in New York. In 2017, the company had to restate three years of financial statements due to several accounting errors, the key one being how it accounted for extended warranties. AmTrust provides extended-service plans (ESP) for automobiles and other consumer […]
Continue readingWhat has been the accounts payable turnover trend for Hasbro and Mattel?
June 16, 2017 0 Comments
Hasbro, Inc. (NASDAQ: HAS) and Mattel, Inc. (NASDAQ: MAT) are two companies in the toy and game industry. Hasbro products include Monopoly board games, G.I. Joe dolls, Furby electronic stuffed animals, Transformers mechanical toys, and the My Little Pony toys. Mattel products include Fisher-Price toys, Barbie dolls, Hot Wheels cars, American Girl dolls, Apples to […]
Continue readingWhat could a Logitech staff accountant have done if he/she knew that the CFO and controller failed to write down the discontinued Revue parts inventory?
May 25, 2017 0 Comments
In the fourth quarter of 2010, Logitech International released the Revue, a TV set-top box designed to integrate cable/satellite TV with internet content. The Revue Google search bar would be able to find any desired content from any provider and project that content to the TV screen. The Revue was manufactured by contract manufacturers, not […]
Continue readingHow does Apple’s issuance of bonds and buyback of its own stock impact its accounting equation?
May 16, 2017 2 Comments
In May 2017, Apple Inc., filed a prospectus with the SEC, indicating that it would be issuing another $7 billion in bonds during 2017. (Apple issued $10 billion in bonds in February 2017 in the US and $1 billion in Taiwan.) With the bond proceeds, Apple will be buying back its own stock. Apple has […]
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