E-Book Overview
Weygandt helps corporate managers see the relevance of accounting in their everyday lives. Challenging accounting concepts are introduced with examples that are familiar to them, which helps build motivation to learn the material. Accounting issues are also placed within the context of marketing, management, IT, and finance. The new Do It! feature reinforces the basics by providing quick-hitting examples of brief exercises. The chapters also incorporate the All About You (AAY) feature as well as the Accounting Across the Organization (AAO) boxes that highlight the impact of accounting concepts. With these features, corporate managers will learn the concepts and understand how to effectively apply them.
E-Book Content
JWCL165_ndx_I1-I10.qxd
9/8/09
9:22 PM
Page I-10
JWCL165_ndx_I1-I10.qxd
9/8/09
9:22 PM
Page I-10
JWCL165_Front_EP1-EP2.qxd
9/14/09
8:55 AM
Page EP1
RAPID REVIEW
Chapter Content BASIC ACCOUNTING EQUATION (Chapter 2)
INVENTORY (Chapters 5 and 6) Ownership
Assets
= Liabilities +
Stockholders’ Equity
⎧ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎨ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎪ ⎩
Basic Equation Expanded Equation Debit/Credit Effects
Assets
=
Dr. Cr. + –
Liabilities Dr. –
Cr. +
+
Common Stock Dr. –
+
Cr. +
Retained Earnings Dr. –
Cr. +
–
Dividends Dr. +
Cr. –
+
Revenues Dr. –
–
Cr. +
Expenses Dr. +
Cr. –
ADJUSTING ENTRIES (Chapter 3)
Ownership of goods on public carrier resides with:
Who pays freight costs:
FOB shipping point
Buyer
Buyer
FOB destination
Seller
Seller
Freight Terms
Perpetual vs. Periodic Journal Entries
Type
Adjusting Entry
Deferrals
1. Prepaid expenses 2. Unearned revenues
Dr. Expenses Dr. Liabilities
Cr. Assets Cr. Revenues
Purchase of goods
Inventory Cash (A/P)
Purchases Cash (A/P)
Accruals
1. Accrued revenues 2. Accrued expenses
Dr. Assets Dr. Expenses
Cr. Revenues Cr. Liabilities
Freight (shipping point)
Inventory Cash
Freight-In Cash
Note: Each adjusting entry will affect one or more income statement accounts and one or more balance sheet accounts.
Return of goods
Cash (or A/P) Inventory
Cash (or A/P) Purchase Returns and Allowances
Interest Computation
Sale of goods
Cash (or A/R) Sales Cost of Goods Sold Inventory
Cash (or A/R) Sales No entry
End of period
No entry
Closing or adjusting entry required
Event
Perpetual
Interest Face value of note Annual interest rate Time in terms of one year
CLOSING ENTRIES (Chapter 4) Purpose: (1) Update the Retained Earnings account in the ledger by transferring net income (loss) and dividends to retained earnings. (2) Prepare the temporary accounts (revenue, expense, dividends) for the next period’s postings by reducing their balances to zero. Process 1. 2.
3. 4.
Debit each revenue account for its balance (assuming normal balances), and credit Income Summary for total revenues. Debit Income Summary for total expenses, and credit each expense account for its balance (assuming normal balances).
Cost Flow Methods • Specific identification • First-in, first-out (FIFO)
The Fraud Triangle Opportunity Finanical Pressure
Debit (credit) Income Summary, and credit (debit) Retained Earnings for the amount of net income (los