In groups of three, select three companies and obtain a copy of their financial statements. Paper copies can be obtained from the companies, and electronic copies are available for most publicly listed companies on their websites. Alternatively, many university libraries have a copy of public company accounts in electronic form.

Required

A. For each of the three companies find information on accruals and deferrals in the financial statements. These will usually be in the notes to the financial statements, and will include such things as depreciation expense, prepaid rent, unearned fees, salaries payable and interest payable. Compare the accruals and deferrals to the profit for each company to assess the impact of accrual accounting adjustments on the measures of profitability.

B. Prepare an overhead of your group’s findings to present to the class.