In most organizations, there are different employees with different targets and reasons to remain employed. The common goal or aim is the financial gain that employees gain from their daily duties. Most employees misstate liabilities to add economic benefits to their end in different departments. There are several methods through which employees can misrepresent obligations for personal gain. One of the ways is by overstating revenues (Giner& Pardo, 2018) . When accounts receivable get exaggerated, they affect the balance sheet, equity, as well as the fixed income. Another method that an employee can misstate revenue is by understating expenses (Giner& Pardo, 2018) . The automatic effect is that the net profit will get inflated where an employee can cash the difference to ensure that accounts are well balanced. Other methods that could lead to the financial gain of employees are understating liabilities and overstating assets. Since the difference in amount affects the general income, employees can cash the balance to gain the finances.
However, there are some actions that a company can undertake to ensure that employees who misstate revenues get controlled. One of the methods to control the overstated revenues is by providing that there are various accountants on the site to verify how the difference is achieved (Bujaki, Lento & Sayed, 2019) . The supervisor should make sure the accounts handled by employees do not tamper to avoid overstated figures (Giner& Pardo, 2018) . Another necessary action that a company can implement is by conducting random audits to verify books of accounts are always in order, and all the overstated bills are detected and balanced.
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An investor may choose to take the agency bond offered in the company. There are advantages to the type of bond since the profits are higher than those of the Treasury bond. The agency bonds are also not full faith and credit obligations of the United States government (Bujaki, Lento & Sayed, 2019) . Agency bond has minimal risks involved, and the interest incurred is taxable on both the government and state levels.
Week 9 Question
Having excess cash in a company is tempting since they can decide to pursue unintended plans. The cash flow of the company provides a full report on how money has been used and gained. Any excess detected may, therefore, give rush ideas of how the funds may get spent. Corporate managers may also feel the need to utilize the cash other than letting it lay idle. However, excessive money means that the business is doing practical work. It also translates to an excellent job conducted by the employees. To put the money into action, a unique way to use it is by rewarding employees to handle their duties well. Giving cash bonus also creates trust among the employees; hence, they can serve more in the organization (Bujaki, Lento & Sayed, 2019) . The excess can also be used to build loyalty among the board members. The cash symbolizes growth in a company in many aspects.
The two major factors that investors should analyze before purchasing a company’s stock are revenue growth and earnings. Before investing, it is crucial to know what the company gains and how they boost their business. It is also essential to understand the sales a company makes how the company facilitates projects to ensure an increase in sales. Revenue and earnings show whether the company has been expanding over the years, or they have been incurring losses (Bujaki, Lento & Sayed, 2019) . Revenues and profits also indicate whether goods and services get overstated in pricing or not. Checking out the cash flow helps investors understand how the company achieves its income versus the capital invested in the business.
Week 10 Question
Sustainable income gets defined as remunerations, which are required by a company to cover up for principal costs on a future date. The earnings provide source options in the future, and therefore, the company can concentrate more on current activities (Bauman & Francis, 2015) . Sustainable income is crucial in an income statement since it explains why the company has a multi-step report ( Giner& Pardo, 2018) . The two factors that affect sustainable income include withdrawn procedures and unexpected substances. When a specific product line in a company has been shut down or closed and subsequently reported on the income statement, it, therefore, affects the sustainable income set aside (Giner& Pardo, 2018) . The expenses that get classified as extraordinary are unpredictable and have no possibility of occurring in the future. The exceptional costs also create an impact on sustainable income. The events can get disclosed to the investors by giving them a copy of the income statement and the lasting income statement to verify the causes and effects on the flow of sustainable income.
Week 11 Question
Cost principle theory is one of the accounting theory that records the assets acquired by the company. The assets include the equipment and the properties the company buys in line of business. Depending on the type of asset, they depreciated with a given period (Giner& Pardo, 2018) . An example that describes a change in the cost principle theory is depreciation in equipment such as computers throughout three, where managers should consider purchasing or replacing the material.
Matching principle of accounting helps in recording a transaction as a unit. It means that for every expense incurred; there are matching revenue transactions as they get generated (Giner& Pardo, 2018) . An example is where a company may choose to pay a sales executive commissions for sales made in January of February. It is vital to keep a track record of the transactions as they occur.
Most essential concepts in accounting beginning form the most important to the least are as follows;
Accruals concept where revenue gets documented when it gets grossed and expenses get documented when assets get utilized.
Conservatism concept where revenue is renowned when there is an assurance that it will be received while expenses get documented when there is a possibility of incurring them
Consistency concept is where a company should maintain a specific accounting method that got chosen initially.
Reference
Bujaki, M., Lento, C., & Sayed, N. (2019). Utilizing professional accounting concepts to understand and respond to academic dishonesty in accounting programs. Journal Of Accounting Education , 47 , 28-47. doi: 10.1016/j.jaccedu.2019.01.001
Giner, B., & Pardo, F., (2018). The Value Relevance of Operating Lease Liabilities: Economic Effects of IFRS 16. Australian Accounting Review , 28 (4), 496-511. doi: 10.1111/auar.12233
Bauman, M., & Francis, R. (2015). Issues in Lessor Accounting: The Forgotten Half of Lease
Accounting. Accounting Horizons . doi: 10.2308/acch-50044
