Accounting For Lawyers

Front 1

Sperate Entity Assumption

Back 1

The entity being reported on is regarded as distinct from those who own it, whether or not it is a separate entity for legal purposes

Front 2

Going Concern Assumption

Back 2

The entity being reported on is assumed to be continuing in operation for an indeterminate period, as a going concern, and is not expected to terminate operations or liquidate its business.

Front 3

Time Period Assumption

Back 3

The entity's activities can be divided into discrete times periods (such as monthly, quarterly and annually)

Front 4

Monetary Transactions Principle

Back 4

The transactions to be reported must be capable of measurement in monetary terms based on some actual transactions

Front 5

Realization Principle

Back 5

Items of revenue should be recognized only when the entity has completed or virtually completed the exchange that generates them

Front 6

Matching Principle

Back 6

Items of expense should be allocated to the period in which the benefit from them will contribute to generating revenue

Front 7

Conservatism Principle

Back 7

A preference for understating earnings, values, and cash flows, rather than for overstating them

Front 8

Cost Principle

Back 8

Assets are to be reported at their historical cost (and not at higher market prices)

Front 9

Consistency Principle

Back 9

Within a set of financial statements, one must apply principles consistently--a preference against picking and choosing to apply different conventions to the same transactions being reported in financial statements

Front 10

Materiality Principle

Back 10

Information to be reflected in financial statements should be meaningful to users and not trivial

Front 11

Cash

Back 11

Balance Sheet Asset

Front 12

Accounts Receivable

Back 12

Balance Sheet Asset

Front 13

Less Allowance for Doubtful Accounts

Back 13

Balance Sheet Contra-Asset

Front 14

Inventory

Back 14

Balance Sheet Asset

Front 15

Prepaid Insurance

Back 15

Balance Sheet Asset

Front 16

Property, Plant, Equipment

Back 16

Balance Sheet Capitalized Asset

Front 17

Less Accumulated Depreciation

Back 17

Balance Sheet Capitalized Contra Asset

Front 18

Investment in Ltd. Partnership

Back 18

Balance Sheet Capitalized Asset

Front 19

Goodwill

Back 19

Balance Sheet Capitalized Asset

Front 20

Less Accumulated Amoritzation

Back 20

Balance Sheet Capitalized Asset

Front 21

Accounts Payable

Back 21

Balance Sheet Liability

Front 22

Payroll Taxes Payable

Back 22

Balance Sheet Liability

Front 23

Interest Payable

Back 23

Balance Sheet Liability

Front 24

Deferred Revenue

Back 24

Balance Sheet Liability

Front 25

Note Payable

Back 25

Balance Sheet Capitalized Liability

Front 26

Common Stock

Back 26

Balance Sheet Equity

Front 27

Retained Earnings

Back 27

Balance Sheet Equity

Front 28

Sales

Back 28

Income Statement Revenue

Front 29

Less Cost of Goods Sold

Back 29

Income Statement Revenue (Contra?)

Front 30

Salaries

Back 30

Income Statement Expense

Front 31

Rent

Back 31

Income Statement Expense

Front 32

Repairs and Maintenance

Back 32

Income Statement Expense

Front 33

Supplies

Back 33

Income Statement Expense

Front 34

Insurance

Back 34

Income Statement Expense

Front 35

Advertising

Back 35

Income Statement Expense

Front 36

Depreciation Expense

Back 36

Income Statement Expense

Front 37

Amoritization

Back 37

Income Statement Expense

Front 38

Gain (loss) on Disposition of Fixed Assets

Back 38

Income Statement (Capitalized?)

Front 39

Interest Expense

Back 39

Income Statement Expense after Operating Income calculated

Front 40

Income Tax Expense

Back 40

Income Statement Expense after Operating Income Calculated

Front 41

Net Income

Back 41

Income Statement

Front 42

COGS Formula

Back 42

Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold

Front 43

Accounting Formula

Back 43

Assets - Liabilities = Owner's Equity

Front 44

Fifo

Back 44

Inventory Calculation done by: First in First out

Front 45

Lifo

Back 45

Inventory Calculation done by: Last in First out

Front 46

Cash Method of Accounting

Back 46

Only List the Money as it is received.

Front 47

Accrual Method of Accounting

Back 47

List the money as soon as the service is performed.

Front 48

Straight Line Depreciation

Back 48

Formula of Depreciation that is based on the purchase price of item - assumed salvage price divided by the amount of useful life.

Front 49

Sum-of-the-years-digit method

Back 49

Formula of Depreciation that depreciates the item more at the beginning of it's use. Formula: start depreciation at percentage created by the value of the useful life divided by the sum of all the years of useful life. Then each year, the years of useful life declines by one.

Front 50

Double Depreciation Method

Back 50

Formula of Depreciation that depreciates the item the fastest. Formula: percentage of depreciation times two. Each year the percentage is taken out of the current net book value. You do not subtract the salvage value first.