Financial Statements
Calculates Net Income.
Assets or Expenses.
Purchase supplies on account.
Supplies (dr)
Accounts Payable (cr)
Inventory valuation methods.
FIFO
LIFO
Weighted Average
Specific Identification
Assets = Liabilities plus Equity
The accounting equation.
Represents profits retained in the company from the beginning of time less any distribution to shareholders.
What is Retained Earnings?
Prepaid Insurance 500 (dr)
Cash 500 (cr)
Record the purchase of prepaid insurance.
Accounts receivable (dr)
Service Revenue (cr)
Sold services on account.
Results in the highest ending inventory (assuming period of inflation).
FIFO
Income Statement, Balance Sheet, Statement of Retained Earnings/Shareholder Equity, Statement of Cash Flow
List core financial statements.
Issued common stock for cash.
Cash (dr)
Common stock (cr)
Percentage of credit sales, percentage of AR, aging.
Beginning Inventory
Plus purchases
Less purchase discounts
Less Ending Inventory
What is the current ratio?
What is vertical analysis? (or Common Sized statements)
Bad Debt Expense (dr)
Allowance for Bad Debt (cr)
Adjusting Entry for prepaid insurance as time lapses.
Prepaid Insurance (cr)
Ending inventory = $100
Purchases less discounts = $500
COGS = $750
Represents the use of a long term asset over time.
Equity section of the balance sheet, reported as a negative.
Where do you find Treasury stock on the financials?
Journalizes income earned not yet received.
Accounts receivable (dr)
Sales (cr)
Journal entry for issuing bonds at a premium.
Cash (dr)
Premium on BP (cr)
Bonds Payable (cr)
Inventory valuation method that results in the highest COGS (or lowest ending inventory) during inflation.
LIFO has what effect on the financials?
Bonds issued for less than face value.
What is a bond issued at a discount?