Financial Accounting Final Study Guide Chapter 6 Accounts Receivable Accountsreceivable Credit sales Collections Endingbalance Reporting Net Sales Sales revenue Credit card discounts Sales discounts Sales returns and allowances Net sales Bad Debts Allowance method Estimate of bad debt expense Adjusting entry Bad debt expense SE AFDA A Contra asset AFDA A Accounts receivable A X X X X Percentage of Credit Sales Beginning AFDA bad debt expense Write offs Ending AFDA Aging of Accounts receivable Estimated ending AFDA Accounts receivable Uncollectible AFDA before adjustment Beginning AFDA Write offs Bad debt expense Estimated ending AFDA AFDA beforeadjustment Balance sheet presentation Net realizable value Accountsreceivable AFDA Write offs are removed from Accounts receivable and charged to Allowance for Doubtful Accounts They have no effect on net realizable value Chapter 7 Inventory Cost of Goods Sold Beginninginventory Purchases Goods available for sale Goods available for sale Endinginventory COGS Gross profit Net sales COGS Cost Flow Assumptions FIFO LIFO Oldest costs COGS Recent costs Ending inventory Oldest costs Ending inventory Recent costs COGS Weighted Average Cost of Goods available for sale Units of Goods available for sale Unitsof Endinginventory COGS Inflation COGS on Income statement Net income Income taxes Inventory on Balance sheet Deflation COGS on Income statement Net income Income taxes Inventory on Balance sheet FIFO Lower Higher Higher Higher FIFO Higher Lower Lower Lower LIFO Higher Lower Lower Lower LIFO Lower Higher Higher Higher X X X X X Chapter 8 Property Plant Equipment Acquisition Purchase price and all expenditures needed to prepare the asset for its intended use Equipment Cash Notes payable Depreciation Depreciation expense depreciation for the current year Income statement Accumulated depreciation total depreciation to date on an asset Balance sheet Depreciation expense Accumulated depreciation Net book value Cost Accumulated depreciation Cost Residual value Depreciablecost Straight line Depreciation expense is constant each year Net book value decrease by the same amount each year until it equals the estimated Accumulated depreciation increases by equal amount each year residual value Cost Residual value Useful life Depreciationexpense Units of production Cost Residual value Estimated total production Double declining Actual production Depreciation expense Accumulated depreciation is used instead of residual value Accumulated depreciation increases each year so net book value decreases each year Double declining rate is applied to a lower net book value each year resulting in a decline in depreciation over time If computation reduces net book value below residual value only depreciation expense recorded is the amount that makes net book value equal residual value Cost Accumulated depreciation Depreciationexpense 2 Useful life Disposal Cash Book Value Gain credit Cash Accumulated depreciation Gain Asset equipment Cash Book Value Loss debit Cash Accumulated depreciation Loss Asset equipment X X X X X X X X Chapter 9 Liabilities Time Value of Money i annual interest rate n periods Present value the current value of an amount to be received in the future Future amount PV value Present value Present value of an Annuity a series of periodic cash receipts or payments that are equal in amount each interest period Amount bereceived PVA value Present value of Annuity Future value future value on an amount that has been increased with compound interest Present amount FV value Future value Future value of an Annuity includes the compound interest of several payments from the date of the payment until the end of the term Payment amount FVA value Future value of Annuity Notes payable Calculated Present Future value Beginning entry Asset Cash Notes payable Ending entry Interest expense Notes payable Notes payable Cash Interest expense Notes payable x Interest rate Notes payable Payment at the end of each year X X X X X X X Chapter 10 Bonds Stated rate Market rate Premium Stated rate Market rate Discount Par amount PV value market rate Sing payment Par value stated rate PVA value market rate Annuity Issue price of bonds Single payment Annuity Premium Issue price of bonds Pa r value Premium amount Cash Premium on bonds payable Bonds payable Discount Par value Issue price of bonds Discount amount Cash Discount on bonds payable Bonds payable Amortization Interest expense Premium on bonds payable Cash Interest expense Discount on bonds payable Cash Straight line X X X X X X X X X X X X Interest expense remains constant every year Premium Discount amortization remains constant every year Book value increases discount decreases premium by the same amount every year o Book value Beginning book value discount premium Amortization Straight lineamortization Totalbond discount Periods Effective interest Interest expense Issue price of bonds Market rate Following year Issue price Issue price of bonds Previous amortization Effective interest amortization Interest expense Stated interest Chapter 11 Stockholder s equity Outstandingshar es Issued shares Treasury stock Earnings per share EPS Net income Average number of SharesOutstanding PE ratio Market price per share Earnings per share EPS Initial Sale of Stock Cash Shares x Selling price APIC Cash Common stock Common stock Shares x Par value Treasury stock stock that has been reacquired Repurchase of Stock Treasury stock Cash Selling treasury stock Equal or above purchase price APIC Treasury stock Below purchase price Cash Cash APIC Treasury stock Dividend liability Shares outstanding x Price per share Retained earnings Dividends payable X X X X X X X X X X X X X Payment of liability Dividends payable Cash Stock Dividends Distribution of additional shares of a corporation s own stock Increases contributed capital Decreases retained earnings Does not affect Retained earnings Common stock X X X X Stock Splits An increase in the total number of authorized shares by a specified ratio Does not decrease Retained earnings Par value of stock halved Shares outstanding doubled Current Dividend Preference Priority granted on preferred over common dividends Preferre d stock Shares of preferred stock Par of Par Common stock Total dividends Preferred stock Cumulative Dividend Preference Current dividends not paid in full accumulated every year Must be paid before any common dividends can be paid Dividends in arrears cumulative unpaid
View Full Document
Unlocking...