Accounting Demystified phần 1 pdf

[...]... managerial accounting, cost accounting, and tax 1 2 Accounting Demystified accounting, to name a few These other types of accounting are covered in other books The end user of financial accounting is the public; therefore, financial accounting has a lot of rules These rules are necessary to make the information presented in the financial statements consistent and understandable In contrast, in managerial accounting, ... page intentionally left blank Accounting Demystified This page intentionally left blank C H A P T E R 1 Introduction The success or failure of a business is measured in dollars And dollars are recorded and reported using accounting Accounting is truly the language of business No matter what your role may be, if you are involved in business, you can benefit from learning accounting That’s what this book... manner Financial accounting is an incremental process What you learn in earlier chapters is used in later ones There are no shortcuts to learning financial accounting, but at the same time, if it is taught clearly, it is not difficult Financial accounting involves all the steps from the original entries in the accounting records to the preparation of financial statements There are other types of accounting. .. financial accounting, the financial statements, then jump back to the first step in the accounting process, making journal entries This may seem out of order, but it follows the way accounting is best understood and learned rather than following the chronology of how accounting is done You cannot be a good accountant if you are not a good bookkeeper Bookkeeping is considered a lower-level profession than accounting, ... statement covers An example is: Jeffry Haber Company Income Statement For the Year Ended December 31, 2002 If the statement is for the quarter ended December 31, 2002, there are two acceptable ways to state the period of time: For the Quarter Ended December 31, 2002 For the Three Months Ended December 31, 2002 The revenues are listed in one section and the expenses in another The order of the accounts... possess skills that bookkeepers do not However, the first step in learning accounting is to learn bookkeeping What makes it accounting and not simply bookkeeping is going beyond just recording the entries into such areas as preparing the financial statements, analyzing the statements, and making necessary adjusting entries at the end of the accounting period A last thing to keep in mind when reading this book... income in order not to confuse this account with Interest expense When an account comes in two flavors (income and expense), we cannot shorten its name The Income Statement is concerned with how much 6 Accounting Demystified money the company brought in and how much it spent in order to bring that money in The Income Statement covers a period of time This period may be a month, a quarter, six months, a year,... arranged are highly variable in practice Companies and managers adapt forms, schedules, Introduction 3 and statements to meet their own needs (within the existing rules) Except as specifically prescribed by accounting guidance, there is an abundance of flexibility A nimble mind will come in handy in trying to reconcile what is described in this book with what you may see in the real world Sometimes these will... given that variability, it should not be hard to take what you learn from this book and relate it directly to real-world situations C H A P T E R 2 Financial Statements The end product of the financial accounting process is the financial statements There are four basic financial statements: the Balance Sheet, the Income Statement, the Statement of Retained Earnings, and the Statement of Cash Flows In addition . Stock 10 0 Common Stock 10 1 Recording the Issuance . 10 2 Treasury Stock 10 3 Dividends 10 4 Chapter 17 Merchandising Companies 10 7 Perpetual Inventory System 11 1 Periodic Inventory System 11 4 Discounts. Payment 11 5 Side-by-Side Comparison of the Periodic and Perpetual Systems 11 7 Chapter 18 Adjusting and Closing Entries 11 8 Payroll Accrual 11 9 Reversing Entries 12 1 Interest Expense 12 3 Unearned. and Vertical Analysis . 14 4 Ratio Analysis 14 5 Liquidity Ratios . . . 14 6 Efficiency Ratios . . . 14 6 Profitability Ratios . 14 7 Summary . . . 14 9 Glossary 15 1 Index 16 7 10 288$ CNTS 08-29-03 08:30:25