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20 Cards in this Set
- Front
- Back
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Income statement basics |
revenue - expenses = net income |
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Financial statement articulation |
order of I/s (how all accounts work together) how financial statements connect |
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DR & CR normal account balances |
Assets = Liabilities & total stockholders equity Debit Credit |
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Chapter 3 principles |
contra accounts 2/10 net 30 (pay within 10 days 2% discount, or pay in full 30 days) Cash xx Sales discount xx A/R Revenue |
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AJE basics |
never hits cash always hits income statement supplies expense xx supplies xx |
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closing entry basics |
closes revenues, expenses, dividends into retained earning 1) RE xx dividens xx |
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Bank reconciliations & JE's |
(only JE) Book side Bank Side outstanding checks/deposit --> |
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Allowance method for accounting to uncollectible accounts receivable |
3 E's estimate, entry, write off ex.) 1 million unrecievable, 10% estimate 1E) 1m * .10 = 100k 2E.) debit bad debt 100k, credit allowance account 100k |
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Inventory Costing methods Fifo Lifo & weighted average |
Ex.) Beginning inventory 100/10$ unit purchase 200/11$, total 1000, 2200 total 300 sold 175 units ending 125 FIFO COGS 175 units 100 * 10 1000 75 *11 825 $1825 COGS $3200 (total) - COGS ($1825) = 1375 ending inventory (asset in balance sheet) LIFO: COGS 175 * 11 = 1925 125 *100 @ $10 26* 11 $1275 ending inventory |
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lower of cost and market method and JE's |
Market value - replacement cost cost - amount initially reported by (fifo lifo ect.) determine the cost (of inventory) and market cost report inventory in balance sheet under the lower of the two. |
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basic accounting for long term assets |
cost plus, (costs to get items ready for use) |
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Calculate bake purchase of assets |
basket purchase when you purchase building, land, franchise ect. you record as 1 cost then allocate costs to individual accounts based on fair price of individual assets |
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double declining Depreciation Method |
beginning book value * 2/life = depreciation expense Dep Expense xx acc. depreciation xx 2nd yr begging book (cost- acc. depreciation) value * 2/life |
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straight line Method |
takes equal amount of depreciation each year. assetts Cost - residual value OVER life = depreciable cost |
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interest expense calculations |
x/12 months |
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Sales tax calculations |
total sales + tax ex.) 50k, tax = .06 50k/1.06 |
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bond issue price and basic terms |
term, unsecured issue the price of the bonds at present value of face amount plus present value of periodic interest payments if issued at discount the face amount is less at premium opposite |
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journal entries for issuance of stock |
D - Cash C - Common stock multiply # of shares times cost per unit |
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journal entries for treasury stock |
Treasury stock cash xx Cash xx |
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preparation of each section of the cash flow statement |
Operating: cash flows of current assets/liabilities first adjustment to cash + depreciation expense , investing: long term assets (equipment, land) , financing : long term liabilities (dividends, notes payable) net change in cash = + Beginning cash = ending cash |
