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Comprehensive Study Notes for Financial Accounting

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Fundamental Accounting Equation

The Financial Statements

Journal Entries: Debits and Credits

Journal Entries: Business Formation Example

Adjusting Entries: Supplies

Adjusting Entries: Unearned Revenue

Adjusting Entries: Accrued Expenses

Adjusting Entries: Accrued Revenues

Adjusting Entries: Depreciation

Summary of Adjusting Entries

Unadjusted vs Adjusted Trial Balance

Trial Balance

Closing Entries

Post-Closing Trial Balance

Business Organization

Financial Statement Effects of Inventory Costing Methods

Lower of Cost or Market

Inventory Errors

Fraud and the Fraud Triangle

Sarbanes-Oxley Act

Five Components of Internal Controls

Principles of Control Activities

Limitations of Internal Controls

Bank Reconciliation

Journal Entries for Bank Reconciliation

Types of Receivables

Net Accounts Receivable: Direct Write-off Method

Net Accounts Receivable: Allowance for Doubtful Accounts

Net Accounts Receivable: Percentage of Sales Method

Net Accounts Receivable: Aging of Receivables Method

Notes Receivable

Introduction to the Statement of Cash Flows

Operating Activities: Indirect Method

Operating Activities: Direct Method

Investing Activities

Financing Activities

Significant Noncash Activities

Horizontal Analysis

Vertical Analysis

Common-sized Statements

Trend Percentages

Introduction to Ratios

Ratios: Earnings Per Share (EPS)

Ratios: Working Capital and the Current Ratio

Ratios: Quick (Acid Test) Ratio

Ratios: Gross Profit Rate

Ratios: Profit Margin

Ratios: Quality of Earnings Ratio

Ratios: Inventory Turnover

Ratios: Average Days in Inventory

Ratios: Accounts Receivable (AR) Turnover

Ratios: Average Collection Period (Days Sales Outstanding)

Ratios: Return on Assets (ROA)

Ratios: Total Asset Turnover

Ratios: Fixed Asset Turnover

Ratios: Profit Margin x Asset Turnover = Return On Assets

Ratios: Accounts Payable Turnover

Ratios: Days Payable Outstanding (DPO)

Ratios: Times Interest Earned (TIE)

Ratios: Debt to Asset Ratio

Ratios: Debt to Equity Ratio

Ratios: Payout Ratio

Ratios: Dividend Yield Ratio

Ratios: Return on Equity (ROE)

Ratios: DuPont Model for Return on Equity (ROE)

Ratios: Free Cash Flow

Ratios: Price-Earnings Ratio (PE Ratio)

Ratios: Book Value per Share of Common Stock

Ratios: Cash to Monthly Cash Expenses

Ratios: Cash Return on Assets

Ratios: Economic Return from Investing

Ratios: Capital Acquisition Ratio