Final Review for Accounting (Start with Definition)
reports unrealized gains and losses
Accumulated Other Comprehensive Income (Loss)
contra asset, increases with a credit
Allowance for Doubtful accounts is a ________ - ________ account and _________ with a ________________
Operating, Investing, and Financing
Aspects of the Statement of Cash Flows
Assets, Liabilities, Stockholder's equity, snapshot of a report at a time
Balance Sheet
reports the amount of capital, in exchange for the company's common stock and preferred stock.
Contributed Capital
Reports Net Income and how distribution of dividends affected financial position
Define Statement of Retained Earnings
updates to bank, and goes up
Deposits in transit
(Cost-accumulated depreciation) * 2/useful life
Double Declining method
updates to books, goes up
EFTS
Income tax payable, FICA tax payable
Employee Payroll deductions
FICA tax payable, Unemployment tax payable
Employer Payroll deductions
oldest inventory sold first
FIFO
Balance Sheet, Statement of retained earnings, Income Statement, and Statement of Cash flow
Financial Statments
Segregate duties
Goods are received only by warehouse employees
Independently verify
Goods billed by suppliers are compared to purchase orders and receiving reports before being paid
DR Rent Expense 2000 CR Prepaid Rent 2000
Hockey helpers paid $4000 cash on September 30, to rent an arena for the months of October and November. Show rent for October, 31
shows all revenues and all expenses for the end of month
Income Statement
We paid cash for equipment
Investing transaction
DR Cash DR Accumulated Depreciation CR Equipment CR Gain on Disposal
Journal entry for gain on disposal
DR Cash DR Accumulated Depreciation DR loss on disposal CR Equipment
Journal entry for loss on disposal
Newest inventory sold first, and assigned to cogs first, small income taxes
LIFO
Document Procedures
Merchandise orders are recorded on a purchase order form
updates to books, goes down
NSF checks
DR Supplies Expense 350 CR Supplies 350
Of the $600 in supplies previously received, $250 remain at September 30th
Establish Responsibility
One office employee places all merchandise orders
updates to bank, and goes down
Outstanding checks
Credit Sales * Bad debt loss rate= Bad debt expense
Percentage of Credit Sales Method
Document procedures
Receiving reports are completed to indicate goods received
reports cumulative net income earned less the cumulative amount of dividends
Retained Earnings
DR Insurance expense CR Prepaid insurance
Risky ventures paid $3000 on September 30, for insurance coverage for the months of October, November and December. Show journal entry for October 31,
updates to books, goes down
Service charges
identifies and records the cost of each item sold as part of cogs.
Specific Identification
(Cost-residual)*1/useful life
Straight line method
DR Unearned Revenue 8000 CR Service Revenue 8000
Super Stage Shows received $16,000 on September 30, for season tickets that admit patrons to theater event that will be held twice. Show Journal entry for October 31.
Restrict access
The warehouse is locked and activities electronically monitored
We paid off dividends in cash
Transactions for Financing
contra equity account, previously issued shares that are bought back
Treasury Stock
DR Bad Debt expense 69,000 CR Allowance for Doubtful Accounts 69,000
Unadjusted balance of allowance account is $1000, The AR is aged as follows: 200,000 0-30 days (historically 20% uncollectible) and $60,000 +30 days (historically 50% uncollectible)
(Cost-residual)* actual production/estimated production
Units of production method
Taking the COGs and dividing it by the number of units available
Weighted Average
exchanges of cash with stockholders and lenders
define Financing activities
are the cash inflows and outflows related to the purchase and disposal of investments and long-lived assets.
define Investing activities
are the cash inflows and outflows related to revenues and expenses reported on the income statement.
define Operating activities
Summarizing everything that happens to cash
define Statement of Cash flow
updates to books, and goes up
interest earned
We paid cash to our employees
operating transaction
