Accounting

Basic

100

Principles of Accounting

Historical Cost Measurement, Revenue-Recognition, Matching Principle , Full Disclosure 

200

Debit Accounts

Credit Accounts 

Assets, Dividends, Expenses

Liabilities, Common Stock, Revenue 

300

Closing Entries 

R E I D 

Revenue - > Income Summary 

Expenses -> Income Summary 

Income Summary -> Retained Earnings 

Dividends -> Retained Earnings

400

Accounting Cycle

1) Analyze Transactions

2) Record in Journal

3) Post 

4) Prepare unadjusted Trial Balance

5) Adjust entries and post to journal

6) Prepare Adjusted Trial Balance 

7) Make Financial Statements 

8) Close Entries and post 

9) Prepare post-closing Trial Balance 

500

Cost of Goods Sold 

Beg. Inventory 

+ Purchases 

+ Freight In 

- Purchases returns/ allows

- Purchase Discounts

= GAFS 

- Ending Inventory 

= COGS

Financial Statements

100

Income Statement

Revenue - Expenses = Net Income

200

Retained Earnings 

Beginning of Retained Earnings 

+ Net Income 

- Dividends 

= Ending Retained Earnings

300

Multi-Step Income Statement

Sales 

- CGS

= Gross Profit 

- Selling expenses 

- Admin. expenses 

= Net Income 

400

Assets on Balance Sheet

Assets

Current Assets

PPE

Intangibles 

500

Current Liabilities 

A/P, Current Portion of Long Term Liability, Short-term N/P

Journal Entries

100

Accrued Revenues

A/R 

       Revenue 

200

Accrued Expenses

Wages Expense 

             Wages Payable

300

Perpetual System Purchase and Sale 

Purchase 

Merchandise Inventory 

        A/P 

Sale 

A/R 

      Sale 

C. O. G. S. 

       Merchandise Inventory

400

Employee Entry

Salary Expense 

            SS Tax payable 

            Medicare payable 

            Fed Income Tax payable 

            State Income Tax payable 

            Salary Payable 

 

500

A/R = 125,000 ; Estimated that 12% is uncollectible. ADA account has a credit balance of 4500

Bad Debt Expense 10, 500

                       ADA     10,500

Bonds

100

Bond Disadvantages

1. bonds can decrease return on equity 

2. bonds require cash payment for principle and interest 

200

Premium bond vs. Discount bond

Premium -> sells above its par value 

Discount -> sells below its par value 

300

Term Bonds vs. Serial Bonds 

Term Bonds -> all mature on same date

Serial Bonds -> Mature in a series of dates

400

Journal Entry for the issuance of a Bond

Cash 

       Bonds Payable 

500

Foreclosure of Mortgage 

lender takes possession of the collateral for non-payment 

Common Stock

100

Disadvantages of Corporation

Double taxation 

Government Regulation 

200

Advantages of a Corporation 

Separate Legal Entity 

Limited Liability of Stockholders

Transferable ownership rights

Continuous life 

lack of mutual agency 

Easy to generate capital 

300

Dividend Dates

1) Date of Declaration 

2) Date of Record

3) Date of Payment

400

Basic Earnings per share 

net income - preferred dividends /

weighted average common shares outstanding

500

Common Stockholders Rights 

Bote 

Sell or dispose of their stock

Preemptive right to purchase proportional shares and keep ownership percentage

Receive common dividends

Share assets in liquidations after creditors and preferred stockholders