Introduction to Accounting Observe Ethical and Technical

Question: Describe about the Introduction to Accounting for Observe Ethical and Technical. Answer: 1. Total amount of assets belonging to Tiny Tots Current assets $ Cash 1500 Prepaid rent 1000 Total 2500 Non-current liabilities Equipment 10000 Total 12500 Total Amount of liabilities Current liabilities $ Wages payable 2500 Accounts payable 4500 Non current liabilities Notes payable 1000 TOTAL 8000 C) Using the accounting equation, what is the amount of Owners Equity reported on Tiny Tots balance sheet Accounting equation states that Assets= liabilities + owners equity Assets= $12500 Liabilities=$8000 Owners Equity= 12500-8000= $4500 d)How much net profit did Tiny Tots have for the year tiny Tots Ltd Net profits for the year Revenues $4000 Less: Expenses $2000 Net Profit $2000 2. Plata Ltd Balance Sheet statement As At 30th June Current Assets $ Cash 131950 Receivable 70300 inventories 13026 Prepaid insurance 1500 Non Current Assets Plant and Equipment 183000 Intangible Assets Intangible 8750 Total Assets 408526 Financed By: CAPITAL 198626 Retained Profits 44950 LIABILITIES Current liabilities Accounts payable 8500 Salaries payable 1450 30% interest bearing 46500 Non Current Liabilities Long term liabilities 108500 Total Liabilities and Capital 408526 3. To: John Minor From: Frank Grey (CPA) Subject how ethics impact a CPA (Certified Practising Accountant The accountants boards all over the world are responsible for the development of accounting ethical values. These regulatory bodies requires practising accountants to act responsibly when serving the public. Accountants should act responsibly when reviewing sensitive financial information and also when engaging in any accounting services(Clarke, 2005). Sound Moral judgement should be exercised by a practising accountant in all their activities. While providing clients with professional services, accountants are expected to present accurate and truthful assessment of the company and its financial health to the public(Duska Duska, 2003). In accounting profession, integrity is a fundamental element. This requires accountants to be forthright, honest and candid with a client with regards to financial information. Accountants are required to restrict themselves from personal gain and the urge of taking advantage of confidential information. Integrity allows clients to get good information from the accountant. There are instances where differences of opinion or errors regarding applicability of laws in accounting, integrity enables accountants to avoid manipulating financial information and intentionally deceiving clients (Jeffrey, 2005). Ethics ensure accountants act in a consistent and professional manner. In the absence of standards, it is required that accountants should act in accordance to commonly accepted principles. Independence and objectivity are critical ethical values in accounting profession. When conducting business and offering services, accountants should remain free from conflict of interest and business relationships that are questionable (Jeffrey, 2008). Objectivity and independence ensures that an accountant provides information about a company that is factual and honest (Marriott, Edwards, Mellett, 2002). For accountants who perform more than one function for a single client, for example auditing, management advisory and tax services, they may compromise their independence and objectivity. Because an accountant may be reviewing their own work when auditing the same work hence objectivity and independence is vital for an accountant. Due care is an ethical value requiring an accountant to observe ethical and technical accounting standards set in the profession. In this case, Generally Accepted Accounting Principles (GAAP) are used by the accountant (Professional ethics in accounting and finance, 2010). Due care requires professional accountants like us to exercise diligence, competence and a proper understanding of the financial information. Competence is based on experience and education, hence, due care requires experienced accountants to direct other accountants who have less experience in the profession. References Clarke, E. (2005).Accounting. South Melbourne, Vic.: Thomson. Duska, R. Duska, B. (2003).Accounting ethics. Malden, MA: Blackwell Pub. Jeffrey, C. (2005).Research on professional responsibility and ethics in accounting. Amsterdam: Elsevier JAI. Jeffrey, C. (2008).Research on professional responsibility and ethics in accounting. Bingley: Elsevier JAI. Marriott, P., Edwards, J., Mellett, H. (2002).Introduction to accounting. London: SAGE. Professional ethics in accounting and finance. (2010). London.