Justification Report Part 1

Topics: Business, Accrual, Tax Pages: 4 (820 words) Published: April 9, 2015


Justification Report
Percy A. Grisby II
ENG 315 Professional Communications
Professor Buchanan
January 23, 2015

Justification report
Root problem
Over the years, we have had our clients decide on the kind of accounting methods that they want their accounts handled and at most times they make us use one or more accounting methods. Most of the clients are guided by what according to research, they consider as convenient. However, according to most of the complaints that are getting received, some of the clients are making huge losses in their businesses. Over the twenty years that this firm has been operational, there is a tendency of the starting businesses to remain in operation for three years and then they are bankrupt. I am for the opinion that the greater problem that leads to the demise of these businesses is the accounting criteria that are being applied for the various businesses firms. If the problems that were leading to the exit of the clients in the market were not operational accounting but business running related, then our firm may be able to retain a lot of clients and therefore increasing our profitability as our operations increases.

Alternative solutions
Most businesses get to the blunt side due to the tax burden on their operations. To be able to arrive at the required tax, we usually use the accounting periods that usually accounts annually and the operations that have taken place in that time flame work. Here are two accounting methods that have to be adopted. There is the Accrual accounting method and there is the cash accounting method. Accrual accounting method is a method whereby all transactions are updated immediately they have occurred (Gibson & TMW Media Group, 2009). This is in disregard to the time when there is the delivery of the item or the item is paid for. On the other hand, the cash system is where you update transactions when the delivery has been made or the payment has been...

References: Aristotle, ., Mayhew, R., Mirhady, D. C., & Anaximenes, . (2011). Problems. Cambridge, Mass: Harvard University Press.
Chesla, E. L. (2000). Practical solutions for everyday work problems. New York: Learning Express.
Gibson, J., & TMW Media Group. (2009). Work problems. Venice, CA: TMW Media Group.
Hubbard, L. R. (2007). The problems of work: Scientology applied to the workaday world. Los Angeles, Calif: Bridge Publications, Inc.
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