Acct. 2331: Accounting Equations
50 Cards in this Set
| Front | Back |
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Accounting equation
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assets = liabilities + s.equity
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stockholder's equity
|
Revenue - Expenses - Dividends
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net income
|
revenues - expenses
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interest
|
face value
x
annual interest rate
x
fraction of the year
|
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acid (quick) ratio
|
(cash + sh. invest + net receivables)
_____________________________
total current liabilities
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current ratio
|
(current assets)
___________________
(current liabilities)
less than 1 not good
ratio high = risk low
|
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debt ratio
|
total liabilities / total assets
ratio high = high risk
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net working capital
|
current assets - current liabilities
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current ratio
|
cash + accts receiv + supplies
______________________________
payables + unearned rev
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debt ratio
|
accts payable + unearned rev
_____________________________________________
cash + accts receiv + supplies + equip + building
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bank reconciliation
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deposit (+)
check (-)
bank error (+/-)
|
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Cash/ Company Reconciliation
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interest earned (+)
notes received (+)
service fee (-)
nsf check (-)
|
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DEALOR
(debit side)
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debits increase
credits decrease
dividends
expenses
assets
|
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DEALOR
(credit side)
|
credits increase
debits decrease
liabilities
owner's equity
revenue
|
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Percentage of Sales
|
allowance for uncollectible accounts
=
total credit sales x % estimated to be uncollectible
|
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Age of Receivables
|
allowance for uncollectible accounts
=
total accounts receivable x
% estimated to be uncollected
|
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Adjusting entry for uncollectible accounts at the end of the year
|
uncollectible accounts expense (bad debt)
allowance for uncollectible accounts
|
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day's sale in receivable
|
average receivables
/ sales per day
|
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Entry for bad debt expense
|
bad debt expense
allowance for uncollectible accounts
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write off uncollectible accounts
|
allowance for uncollectible accounts
accounts receivable
|
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Net sales
|
total sales
- sales return
- sales allowance
- sales discount
|
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inventory turnover ratio
|
cost of goods sold/ average inventory
|
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gross profit ratio
|
gross profit / net sales
|
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sales revenue
|
# units sold x Cost
|
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discount bond
|
market > stated
|
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premium bond
|
market < stated
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Bond at face value
|
market = stated
|
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Principle payment (single payment)
|
PV of single
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Interest payment (flow of payments)
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PV of annuity
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interest payable
|
face value x
stated interest rate
x fraction of the year outstanding
|
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carrying value with discount
|
face value - amortized discount
|
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carrying value with premium
|
face value + amortized premium
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interest payment on a bond
|
D: interest expense
C: bonds payable
C: cash
|
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Cost of Goods Sold
|
Sales Revenue - Gross profit
|
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gross profit
|
sales revenue - COGS
|
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net income
|
gross profit -
operating expense
|
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operating expense
|
gross profit - net income
|
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FIFO
|
Inv sold = first units
inv not sold = last remain. units
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LIFO
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Inv sold = last units sold
Inv not sold = first units not sold
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Average cost
|
total sales revenue / total units
then units x avg cost
|
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operating activities
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gain sale: ADD
decreas accts receiv: ADD
decrease salaries pay: SUB
Depreciation expense: ADD
increase prepaid rent: SUB
loss on sale asset: ADD
increase accts payable: ADD
increase inventory SUB
increase operating expense payable ADD
increase income tax ADD
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issue bond at par
|
cash
bonds payable
|
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issue at premium
|
cash
premium
bonds pyable
|
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issue at discount
|
cash
discount
bonds payable
|
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issue # units @ par Common stock $#/ share
|
cash (shares x $/share)
common stock (shares x par value)
paid cap excess par (cash - cs)
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issue shares of $# par value preferred stock $#/share
|
cash
preferred stock
capital excess par
|
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amoritization
|
cash paid: face x stated
interest expense: c.Value x market
increase/decrease in CV: 2-3
CV: prior carrying (- if premium)/ (+ if discount)
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return on equity
|
net income - preffered dividends/ avg c.s.euity
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return on assets
|
net income/ avg total assets
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|
arnings per share
|
net income - divdends preffered stock / weight avg cs outstand
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Acct. 2331: Final