Week Five Reflection

* Prepare a statement of cash flows using both direct and indirect methods.

When preparing a statement of cash flows, companies using both direct and indirect methods it can provide an illustrative examples for the preparation of statements of cash flows under both the direct and the indirect methods. It doesn't matter which method a company uses both shows the cash and accrual basis and activities of the statement.

* Apply ratio, vertical, and horizontal analysis to financial statements.

Applying ratio, vertical, and horizontal analyses to financial statements it helps investors, creditors, and the management in determining the future prospects as well as the plans regarding the company. Each analyses is there to determine the financial outlook of the company.

* Prepare journal entries associated with the issuance of preferred and common stocks and the declaration and payment of dividends.

Journal entries are prepared for the declaration and payment of dividends is recorded when payment of the dividend shortly after the end of the current fiscal period. The date of declaration is the date when the corporation's board of directors approved the dividend. The date of payment, the common and preferred stock dividends are recorded along with cash, for the payment amount.

* Identify situations that might lead to unethical accounting practices.

There are many reasons and situations which can lead to unethical accounting practices but the most common reason is self-interest greed. Most companies rely to unethical accounting practices because of greed which in turn can ruin the reputation of the company.

* Examine the effect of unethical behavior and the Sarbanes-Oxley Act on financial statements.

The Sarbanes-Oxley Act was mandated to ensure that companies can promote honest and ethical conduct and full and accurate disclosure in periodic reports. The Sarbanes-Oxley Act can effect financial statements in which companies have to abide by to ensure honest and ethical practices with financial statements.