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Accounting Cycle Essay

956 words - 4 pages

WAlmart |
Accounting Cycle Paper |
Accounting Cycle of Walmart |
|
Melanie Bartholomew |
September 2, 2012 |

When a company, like Walmart, begins to prepare financial statements and reports at the end of an accounting cycle they generally use Generally Accepted Accounting Principles and “the collective process of recording and processing the accounting events” (Definition of ‘Accounting Cycle’, 2012), known as the accounting cycle. There are nine steps involved in the accounting cycle. Walmart would begin the process by collecting and analyzing data from their events and transactions. Next, the company puts those transactions into a general journal. After journalizing their ...view middle of the document...

Because there are no set rules as to which events the company must record, they can choose what to include and exclude from various financial statements. If an item is an element, measurable, relevant, and reliable it should be included in the financial statements. The company should record as many events as possible that affect its financial position. The more information provided in financial statements the more confident readers of the financial statements will be about the financial decisions they make regarding the company.
In its financial report, Walmart provides an unaudited Condensed Consolidated Statements of Income. This financial statement provides financial information measuring the results of operations dating back three and six months prior to the statement date for the current and previous year. The statements of income begins with revenues; which includes the net sales, membership and other income, total revenue, cost of sales, and operating, selling, general, and administrative expenses. Following the revenues account is the operating income account and the interest account. The interest account includes debt, capital leases, and interest income, giving net interest. Income from operations before income taxes and provisions for income taxes are the next accounts listed, respectively. The income from continuing operations and loss from discontinued operations, net of tax, follow. These accounts are followed by consolidated net income and consolidated net income attributable to noncontrolling interest, which give the amounts in the next account, consolidated net income contributable to Walmart. Next in Walmart’s statements of income is income from continuing operations attributable to Walmart, basic net income per common share, diluted net income per common share, and the weighted-average number of common shares; respectively. The statements of incomes ends with dividends declared per common share.
The next financial statement included in Walmart’s financial report is its unaudited Condensed Consolidated Balance Sheets. This financial statement shows Walmart’s financial condition at the statement date,...

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