journal entry to the right side of a general ledger account Accounting System Flow 1. Transactions are recorded in the form of journal entries and adjusting entries 2. Journal entries are posted into the accounts of the general ledger 3. The trial balance is prepared by listing account balances 4. The financial statements are prepared PPT 3 -CH2 GAAP – generally accepted accounting principles FASB – The Financial Accounting Standard Board Money is the common unit of measure to record
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CHAPTER 1 FInANCIAL ACCOUNTING AND ITS ECONOMIC CONTEXT ISSUES FOR DISCUSSION ID1–1 Security analysts and stockholders: These users would use financial statements to try to estimate the future earnings and cash flow potential of the company‚ which would be used to project a value for the company’s stock. Bank loan officers: These users would use the financial statements to determine the ability of a company to repay loans to the bank. A company’s
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com. OVERSTOCK.COM: UNUSUAL/CONFLICTING ACCOUNTING PRINCIPLES IMPACT Overstock.com has recently received negative publicity because of some decisions regarding GAAP‚ internal accounting policies and their relationship with external auditors that has caused the company to have to restate their published financial statements going back to 2008. In their 2010 10K report on page 19 it is stated that "We lacked a sufficient number of accounting professionals with the necessary knowledge‚ experience
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Why would users rely on financial statements? What is an example of a financial measure that an external user might use? What is an example of a financial measure that an internal user might use? Users rely on financial statements to gauge the strength and outlook of companies. Others understand that. One would want that company to make money for them when they invest. If companies didn’t make money for you there would be no reason to buy stocks and no reason the price of a stock would ever
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Review sheet Test 2 Chapters 4 & 5 (33 Multiple choice) Chapter 4 ▪ Definitions or calculations presentation on financial statements- Net Sales‚ COGS‚ gross profit‚ selling and administrative expenses o Sale - sale discount = Net sales o Net sale – COGS = Gross profit o Sale discount + net sale= sale o Sale – net sale = sale dis o Net sale – gross profit= COGS New asset -> inventory Expense -> COGS Revenue -> sales Contra revenue (debit)
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REQUIRED: Draft the appropriate audit opinion given the following scenarios. Each situation is independent of the other situations. 1. Proli Footwear’s management refuses to accrue the accounts receivable loss related to the bankruptcy of Moccasins For All. 2. The bank is expected to withdraw its financing because: a. The Company has projections that indicate continued decrease in earnings and reduced revenues; OR b. The Company has violated certain loan covenants that the bank will not waive
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The Principles of Islamic Accounting Definition and discussion of some accounting principles and how they are fit into Islamic framework to furnish an accounting system and procedures for Islamic Financial institutions will be considered here. The plan to study accounting principles From an Islamic perspective is to review these principles from the viewpoint of the Major Islamic principles which govern financial dealings and contracts‚ as mentioned In the Qur ’an. These are: 1- Realization
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Objectives Accounting and the Business Environment 7111AFE Topic 1 1. Use accounting vocabulary. 2. Apply accounting concepts and principles to business situations. 3. Use the accounting equation to describe an organisation’s financial position. 4. Use the accounting equation to analyse business transactions. 5. Preparation of financial statements. 1-2 Objective 1 Accounting... is an information system that... Use accounting vocabulary measures business activities‚ processes information
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I Brief Contents 3 Chapter 1 Introducing Financial Accounting Chapter 2 Constructing Financial Statements Chapter 3 Adjusting Accounts for Financial Statements Chapter 4 Reporting and Analyzing Cash Flows Chapter 5 Analyzing and Interpreting Financial Statements Chapter 6 Reporting and Analyzing Revenues and Receivables Chapter 7 Reporting and Analyzing Inventory Chapter 8 Reporting and Analyzing Long-Term Operating Assets
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21. Generally accepted accounting principles c. derive their credibility and authority from general recognition and acceptance by the accounting profession. 22. A soundly developed conceptual framework of concepts and objectives should d. all of these. 23. Which of the following (a-c) are not true concerning a conceptual framework in account-ing? c. It should be based on fundamental truths that are derived from the laws of nature. S24. Which of the following is not a benefit associated
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