Search Results for: Financial Accounting
PDF versions of the primary textbook are available for offline use. While these versions are a convenient alternative for times when students lack Internet access, they do not include interactive content such as simulations, videos, and quizzes. For that reason, the offline versions should be used as a backup rather than as the primary textbook. You can download Read more »
Exercises: Appendix B (revise questions)
SHORT-ANSWER QUESTIONS, EXERCISES, AND PROBLEMS ➢ Cite the major advantages of the corporate form of business organization and indicate why each is considered an advantage. ➢ What is meant by the statement that corporate income is subject to double taxation? Cite several other disadvantages of the corporate form of organization. ➢ Why is Organization Expense Read more »
Glossary Unit 1
GLOSSARY Asset Things of value owned by the business. Examples include cash, machines, and buildings. To their owners, assets possess service potential or utility that can be measured and expressed in money terms. Balance sheet Financial statement that lists a company’s assets, liabilities, and stockholders’ equity (including dollar amounts) as of a specific moment in time. Read more »
Adjusting Entries for a Merchandising Company
Remember this? Accounting Cycle 1. Analyze Transactions 5. Prepare Adjusting Journal Entries 9. Prepare Closing Entries 2. Prepare Journal Entries 6. Post Adjusting Journal Entries 10. Post Closing Entries 3. Post journal Entries 7. Prepare Adjusted Trial Balance 11. Prepare Post-Closing Trial Balance 4. Prepare Unadjusted Trial Balance 8. Prepare Financial Statements We learned how Read more »
Merchandise Inventory
Merchandise inventory is the cost of goods on hand and available for sale at any given time. Merchandise inventory (also called Inventory) is a current asset with a normal debit balance meaning a debit will increase and a credit will decrease. To determine the cost of goods sold in any accounting period, management needs inventory Read more »
Exercises: Unit 3
SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS Questions ➢ Describe the steps in recording and posting the effects of a business transaction. ➢ Give some examples of source documents. ➢ Define an account. What are the two forms of account posting illustrated in the chapter? ➢ What is meant by the term double-entry procedure, or duality? Read more »
Preparing an Adjusted Trial Balance
Accounting Cycle 1. Analyze Transactions 5. Prepare Adjusting Journal Entries 9. Prepare Closing Entries 2. Prepare Journal Entries 6. Post Adjusting Journal Entries 10. Post Closing Entries 3. Post journal Entries 7. Prepare Adjusted Trial Balance 11. Prepare Post-Closing Trial Balance 4. Prepare Unadjusted Trial Balance 8. Prepare Financial Statements In our detailed accounting cycle, Read more »
Stock Dividends and Splits
A company that lacks sufficient cash for a cash dividend may declare a stock dividend to satisfy its shareholders. Note that in the long run it may be more beneficial to the company and the shareholders to reinvest the capital in the business rather than paying a cash dividend. If so, the company would be Read more »
Exercises: Unit 18
QUESTIONS, EXERCISES AND PROBLEMS Questions ➢ What are the major sources of financial information for publicly owned corporations? ➢ The higher the accounts receivable turnover rate, the better off the company is. Do you agree? Why? ➢ Can you think of a situation where the current ratio is very misleading as an indicator of short-term, Read more »
Exercises: Unit 15
SHORT ANSWER QUESTIONS, EXERCISES, AND PROBLEMS Questions ➢ What are the advantages of obtaining long-term funds by the issuance of bonds rather than additional shares of capital stock? What are the disadvantages? ➢ What is a bond indenture? What parties are usually associated with it? Explain why. ➢ Explain what is meant by the terms coupon, Read more »