The paper "Tax Periods and Methods - Children’ s Company " is a great example of a finance and accounting assignment. The owner has chosen to start an online retail business that sells shoes, bags, toys and school supplies for school children that will be called “ Children’ s Company” . The structure of the business is sole proprietorship because it is a small start-up company. Children’ s Company will be located in San Francisco, California, where there are 837,442 populations as of 2013 (U. S. Census Bureau). My business objectives are to achieve 15 percent growth in revenues and earnings within the first 12 months of operation. The owner chose to establish a sole proprietorship structure because it is easy to start up.
It does not require the filing of too many complex forms like the one needed by corporations. The advantage of this type of structure is that owner does not need to file a separate tax, instead, business information is detailed in the income tax return. Business capital will come from personal savings and borrowings from parents and friends. Supplies will come from established factories in San Francisco, and others will be imported from China or India where these materials are sold cheaper. As a marketing strategy, the company website will be opened to act as a virtual store where the merchandise will be displayed.
Transactions are done online. Delivery of orders is completed by a courier, like FedEx, etc. once payment of the order is confirmed or received. Orders may also be paid by cash on delivery. 2. Accounting periods. Accounting periods are the calendar period and the fiscal period. The calendar period is a 12 month period that starts January 1st and ends on December 31st of the same year.
The calendar year is typically used by individuals and businesses. The Fiscal year is also a 12-month system of reporting, that typically ends on a month other than December. For instance, fiscal year used by the U. S. Government starts on Oct. 1st and ends on Sept. 30.Others that are not considered are short tax year and improper tax year, both of which are used under extraordinary situations. The accounting period selected for the business is the calendar year that ends December 31st.
FindLaw. 2014. Cash vs. Accrual Accounting for Small Business. Retrieved from http://smallbusiness.findlaw.com/business-finances/cash-vs-accrual-accounting-for-small-businesses.html
IRS Publication 538. December 2012. Accounting Periods and Methods, p. 20. Retrieved from http://www.irs.gov/pub/irs-prior/p538--2012.pdf
HILL. Rebekiah . 2015. The Differences between Accrual and Cash Basis Accounting. Retrieved from http://study.com/academy/lesson/the-differences-between-accrual-cash-basis-accounting.html