ACC206 week 2 discussion replies. Discussion 1 & 2 (Do not ask for a different amount of money and do not send me chat messages)

Collapse SubdiscussionDee Dee Urang#1 

Please make you place the name and number next to the answer so that I will know which reply goes to which person. 

#1Dee Dee Uranga

Jun 4, 2017

Jun 4 at 10:35pm

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The stock is a share of ownership in a corporation. The callable preferred stock is a stock that the issuing corporation can redeem under certain circumstances. The corporation that issues the stock can buy it back at a certain price before the stock is scheduled to mature. Sometimes a company may wish to attract additional equity financing, but it is reticent to grant new investors all of the traditional rights associated with common stock (Wainwright, 2012). The purpose of a callable stock is to prevent the dividends from getting too high. The issuer controls the repurchase options instead of the investor.

Stocks are usually either common stocks or preferred stocks. These stocks can be callable or cumulative. Preferred stock is paid a dividend before common stockholders. When the stock is cumulative, the dividends must be paid before common stock. Sometimes a preferred stock has a fixed liquidation that means the terms of the stock are fixed by the company. Convertible preferred stock features are that the shares can be exchanged for common stock at a specific ratio. When an investor has shares of common stock, they have a claim on dividends and also get voting rights when it comes to electing board members. Common stock is risky because if a company closes, then the stockholder loses. Preferred stock is safer because if the company goes out of business, then the stockholders will still get paid during liquidation.

I personally prefer the preferred stock because I want my investment to be as secure as possible. I am not familiar enough with the stock market to invest in common stocks. I am not concerned with voting rights that come with common stock. I am more concerned with reducing the risks of my investment. I prefer to have a fixed dividend amount that is guaranteed.

V/R,

Dee Dee Uranga

References

Wainwright, S. K. (Ed.) (2012). Principles of Accounting: Volume II [Electronic version]. Retrieved from https://content.ashford.edu

#2 Selene Million

TuesdayJun 6 at 11:32am

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-Common stock is the equity stock that companies sell to investors in exchange for ownership interest in the company. Companies sell stock to investors to raise funds or capital for operating purposes within the company. Common stockholders have voting rights and control within the company.Callable preferred stock is a stock that gives the issuing company that option to buy the debt back at a fixed price before the maturity date.Preferred stock gives its holders preference over common stockholders in dividend payouts, and the distribution of assets if the company has to be liquidated. Preferred stockholders get paid before common stockholders, but after creditors.Cumulative stock is an aspect of preferred stock that dictates that any unpaid dividends must be paid prior to any common stock payouts. This is the most common type of stock and if dividends are not paid in a year period, they will roll over into the next year and then be paid with that year’s dividends.Convertible stock is exchangeable for common stock at a pre-set ratio. Common stockholders can exchange their stock, initially they may lose part of the starting investment, but this will protect their investment long-term.If I were going to purchase any type of stock, it would be cumulative preferred stock. Even though this option does not give you voting rights or control within the issuing company, it does protect your investment by ensuring that you are paid your dividends and returns, and it also gives you the protection to recoup your money if the company goes under, by the liquidation of assets.References:Wainwright, S. K. (Ed.) (2012). (Links to an external site.)Links to an external site.Principles of accounting: Volume II [Electronic version]. Retrieved from https://content.ashford.edu

#3 Joe Julian

WednesdayJun 7 at 6:59am

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Accounting is all about managing your finances, and that takes place in three ways planning, directing, and controlling duties. Many of these features are key to the accounting cycle, but each one has there own importance. According to Wainwright, “Planning is the process of deciding on a course of action to reach a desired outcome. A business must plan its high-level strategy as well as operational details” (Wainwright, 2012. Sec. 3.2, Para. 2). What Wainwright is saying is the process of deciding a certain action to reach a goal is considered planning, and that a business must plan a strategy as well as how to execute it. Planning is very important not just in business, but in life. If you start a business without a plan, then you may fail, and the same can be said about life. Planning is very important and businesses/companies should take their time on this process. The next feature is directing which seems like assigning certain tasks to certain individuals. Wainwright continues to say, “Many companies designate a corporate controller as the person responsible for providing leadership over the cost and managerial accounting duties. This person may work closely with a chief financial officer (CFO), who is usually responsible for external reporting and cash management” (Wainwright, 2012. Sec. 3.2, Para. 7). What Wainwright is saying is that companies will assign a leader that is responsible for management accounting duties and providing leadership for other employees, this leader/manager may work with another person(with a higher leadership position) that is responsible for cash management. This is just a typical business or chain of command struggle. A certain person may be put in charge, but they report to the person that put them in charge and so on. Leadership is very important, and in the terms of accounting it could mean who may or may not be getting paid.

What is the most important role of management accounting? Even though planning is very important in business and also life(like I mentioned), I would say that the most important role of management accounting is directing. Anyone can make a plan for a business and many peoples plans will be different, but leadership in the form of directing is key to make those plans fall into place. I have mentioned in many courses that I believe that leadership and teamwork is key to a successful business. Now you may say, you mentioned leadership then why isn't controlling duties the most important? The answer is very easy. If you don't have leadership assigned in a company(or once again life) then chaos will start to happen. Leadership is needed to guide others and that is no different with accounting. A good example is if you just starting a company and had no knowledge of accounting, you wouldn't hire a person that doesn't know what to do with their money or what they should spend it on, you will hire someone that knows how to use their money and save. This is just my opinion, but without leadership whether it is life, business, or even accounting, then you are setting yourself up for failure; we don't want to fail we want to succeed and directing/leadership is key for success.

How is that different than financial accounting? The main difference between financial accounting and management accounting is rules. Sometimes a manager/owner will do whatever they can to meet their financial goals, but you can't do that with financial accounting. With financial accounting records show where you money is going and coming from, but as a manager you may choose not to record these transactions; of course this can be a problem in the future but if the manager wants to meet their goals then they will do everything they can to meet those goals. Money can make people greedy, but that isn't a reason to cheat the system just to get what you want.

Reference:

Wainwright, S. K. (Ed.) (2012). Principles of Accounting: Volume II [Electronic version]. Retrieved from https://content.ashford.edu/

#4Dawn Cordero

WednesdayJun 7 at 4:52pm

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What is the most important role of management accounting? The roles in management accounting are planning, directing and controlling duties.  The most important role in management accounting is cost products.  "Business decisions about what to sell and how to price are often driven by cost studies and measures. Thus, a firm grasp of costing is essential."  (Wainwright, 2012). Management accountants are key figures in determining the status and success of a company.

How is that different than financial accounting? Within Management accounting the accountants prepare these documents and send them directly to personnel within a company, such as managers and executives. These reports break down numbers and projections related to departments, products, employees and customers and how they affect the company. Financial accounting reports are prepared by accountants and sent directly to entities outside of the company, such as stockholders, tax professionals and lenders. These reports show concrete numbers, as well as past mistakes and achievements. These documents are objective, factual and avoid projections.

Reference:

Wainwright, S. K. (Ed.) (2012). Principles of Accounting: Volume II [Electronic version]. Retrieved from https://content.ashford.edu