Chapter One The Accounting Equation and Double-entry Bookkeeping I. Learning objectives After completing this session‚ students should be able to (1) Define assets‚ liabilities‚ owner’s equity‚ revenue and expenses; (2) Understand the functions of the fundamental accounting equation; (3) Record business transactions and illustrate their effects on the fundamental accounting equation; (4) Understand the accounts payable‚ accounts receivable‚ prepaid insurance‚ and drawing accounts;
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Week one checkpoint: scavenger hunt GAAP- (Generally Accepted Accounting Principles) Is rules that govern the way that accountants do the financial reports. http://www.investorwords.com/2141/GAAP.html Basic accounting formula- Is the formula that is used in accounting that reveals the total assets‚ liabilities‚ and the shareholders equity. Assets= Liabilities + shareholder Equity. http://www.investopedia.com/terms/a/accounting-equation.asp Transaction‚ t-account- It is an analysis of a transaction
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According to the double entry accounting system‚ a business transaction affects at least two accounts and the debit and credit amounts recorded for the affected accounts must be balanced. These transactions will be recorded in the appropriate books of accounts. Business entities develop a chart of accounts‚ a list of account titles with their corresponding account codes that the business will use in recording and posting in the books of accounts and in reporting in the financial statements. Double
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The FASB recently issued further guidance to assist with the interpretation of ASC 820- 10 (Statement 157): • FASB Staff Position FAS 157-3: Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active was issued in October 2008 to clarify the application of ASC 820-10 (Statement 157) in a market that is not active and to provide an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial
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A recent issue that is becoming increasingly contentious and providing a hurdle to convergence between GASB and IASB is accounting for Financial Instruments. The financial crisis of 2008 had devastating consequences for the financial markets everywhere. Blame was widely spread and both IASB and GASB considered making changes in the accounting of financial instruments‚ particularly the delayed recognition of credit losses on loans. FASB and IASB began working together‚ but found irreconcilable differences
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1. Recognition of normal balances a. Amounts paid to a mall for rent -expense b. Amounts to be paid in 10 days- liability c. A new fax machine purchases for office use- assets d. Land held as an investment - assets e. Amounts due from customers -assets f. Daily sales of merchandise sold - revenue g. Promotional costs to publicize a concert - expense h. A long-term loan owed to Citizens Bank -liability i. The albums‚ tapes‚ and CDs held for sale to customers –assets Normal balance for: liability
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Complete the horizontal analysis of the income statement data for Winfrey Corporation using 2009 as a base E13-9 Armada Company has these comparative balance sheet data: Compute the following ratios at December 31‚ 2010. Business - Accounting E13-5 The comparative balance sheets of Nike‚ Inc. are presented here. NIKE INC. Comparative Balance Sheets May 31 ($ in millions) Assets 2007 2006 Current assets $8‚076 $7‚346 Property‚ plant‚ and equipment (net)
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products (commercials and print) have made their product so attractive that a person just wants to run out and buy the products regardless of their income levels. Each company has also used celebrities to help market their products. In this paper we will review each company’s financial documents to see how each of the companies is doing financially. We will also perform a vertical and horizontal analysis from each of the company’s financial data. Once the analysis is complete I will give recommendations
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Cash Distribution Plan Advanced Accounting ACC 407 Assignment 1 Week 1 LO2-16-8 Cash Distribution Plan Adams‚ Peters‚ and Blake share profits and losses for their APB Partnership in a ratio of 2:3:5. When they decide to liquidate‚ the balance sheet is as follows: Assets Liabilities and Equities Cash $40‚000 Liabilities $50‚000 Adams‚ Loan 10‚000 Adams‚ Capital
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ASC 410 Summary ASC 410 is the accounting standard codification that represents asset retirement and environmental obligations. Under ASC 410‚ there are two main subtopics which are asset retirement obligations and environmental obligations. Asset retirement obligations are legal obligations that may exist in connection with an entity’s retirement of a tangible long-lived asset. These legal obligations may arise when the entity acquires‚ constructs‚ or develops a long-lived asset‚ or operates a
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