Financial accounting the impact on decision makers 9e

... balance per the bank, it is because the company is reconciling the balance on the bank statement to the balance on the books The bank has deducted the charge from the balance it shows Because the company ... sense to close the Equipment account at the end of the period The account should stay on the books as long as the company keeps the asset On...

Ngày tải lên: 15/12/2016, 12:18

... Exhibit 1. 4—Users of Accounting Information Financial Decision Framework Formulate the question Gather information from the financial statements and other sources Analyze the information gathered ... Branch of accounting concerned with providing management with information to facilitate planning and control  Financial accounting  Branch of accounting concerned with...

Ngày tải lên: 15/12/2016, 12:22

... Interpret the ratios—higher the current ratio, the more liquid the company The Business Decision Model If you were a banker, would you be willing to loan money to a company? Gather information from the ... Report (continued)  The Report of Independent Accountants is provided by the company’s auditor   Auditor expresses an opinion on whether the financial statements...

Ngày tải lên: 15/12/2016, 12:22

... drive, or another device containing all of the accounts Identify and Analyze  The accounting equation is the basis for financial statements  For every transaction, three questions must be answered: ... Transactions (3) Acquisition of equipment on an open account Equipment (3) 20,000 Accounts Payable 20,000 (3) Debits and Credits Applied to Transactions (4) Sale of monthly member...

Ngày tải lên: 15/12/2016, 12:22

... LO Example 4. 1—Comparing the Cash and Accrual Bases of Accounting Exhibit 4. 2—Comparing the Cash and Accrual Bases of Accounting The Revenue Recognition Principle  Recognized in the income statement ... culminating with the preparation of a set of financial statements 30 adjustment to recognize insurance expense: LO Exhibit 4. 5—Steps in the Accounting Cycle Work sh...

Ngày tải lên: 15/12/2016, 12:22

... n/30: the net amount of the selling price is due within 30 days of the date of the invoice  Net, 10 EOM: the net amount is due anytime within ten days after the end of the month  1/10, n/30: the ... destination point: seller incurs the transportation costs  FOB shipping point: buyer incurs the transportation costs  FOB stands for ‘‘free on board’’  Example 5. 7—Rec...

Ngày tải lên: 15/12/2016, 12:22

... recorded on the books but not yet reflected on the bank statement Bank Reconciliation  Reconcile or resolve any differences between balance on the bank statement with balance shown in the accounting ... Exhibit 6. 5—Document Flow for the Purchasing Function Exhibit 6. 6—Purchase Requisition Exhibit 6. 7—Computer-Generated Purchase Order Exhibit 6. 8—Invoice  A form sen...

Ngày tải lên: 15/12/2016, 12:22

... of these bonds at face value, which is the amount that will be repaid to the investor when the bonds mature The bonds pay 10% interest semiannually on June 30 and December 31 Example 7. 10 Accounting ... Example 7. 7 Accounting for a Note Receivable (continued)  Adjustment made on December 31 to record interest earned during 2014: Example 7. 7 Accounting for a Note Receiva...

Ngày tải lên: 15/12/2016, 12:22

... depreciation for the 2½ years from the date of purchase to the date of sale The effect of the transaction for the sale can be identified and analyzed as follows: Example 8. 8—Calculating the Loss on ... (continued)  The effect of the transaction for the overhaul is as follows: Example 8. 6—Capitalizing Costs of a Major Repair (continued)  The effect of the transa...

Ngày tải lên: 15/12/2016, 12:22

... creditor The accounting for notes depends on whether the interest is paid on the note’s due date or is deducted before the borrower receives the loan proceeds Example 9. 1—Recording the Interest on ... receives a one-year loan from First National Bank on January The face amount of the note of $1,000 must be repaid on December 31 along with interest at the rate o...

Ngày tải lên: 15/12/2016, 12:22

... of the bonds as follows: Recording Bond Issuance at Discount (continued)  The Discount on Bonds Payable account is shown as a contra liability on the balance sheet as a deduction from Bonds Payable ... obligations as they come due The Ratio Analysis Model What is the amount of debt in relation to the total equity of a company? Will the company be able to meet its obligation...

Ngày tải lên: 15/12/2016, 12:22

... Equity on the Balance Sheet  The basic accounting equation: Assets = Liabilities + Stockholders’ Equity  Two major components or subcategories: Components of the Stockholders’ Equity Section of the ... Splits  The creation of additional shares of stock with a reduction of the par value of the stock LO Example 11. 9—Reporting a Stock Split  Refer to the Shah Company in...

Ngày tải lên: 15/12/2016, 12:22

... time from the purchase of inventory to the collection of any receivable from the sale Solvency Analysis  The ability of a company to remain in business over the long term  The ability of the firm ... making comparisons  Recognizing trends in ratios  Extra caution for extraordinary items and gains and losses from discontinued operations  LO Limitations and Considerations in...

Ngày tải lên: 15/12/2016, 12:22

... obligations? Gather the information from the financial statements Calculate cash flow adequacy ratio Compare the ratio with prior years and with competitors Interpret the ratios The Business Decision ... and then pays this amount in cash to the inventor for the rights to the patent Example 12- 3 Determining Noncash Investing and Financing Activities (continued)  Next, t...

Ngày tải lên: 15/12/2016, 12:22

... monitor your decision, make the decision c Formulate the question, Gather information from financial statements, Analyze the information, Make the decision, Monitor your decision d Analyze the ... formulate the question, gather information from financial statements, monitor your decision, make the decision b Formulate the question, Analyze the information, gath...

Ngày tải lên: 09/03/2017, 09:26