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BACKGROUND
1. History
2. GAAP vs. OCBOA
3. Types of Accountants
4. International
5. Future
BASIC INFO
1. Financial Statements
2. Asset, Liability, Equity
3. Debits and Credits
4. Double Entry
5. Software
GENERAL
1. A/R and A/P
2. Depreciation
3. Inventory
4. Leases
5. Payroll
ASSETS
1. Cash
3. Fixed
4. Investments
5. Intangibles
LIABILITIES & EQUITY
1. Current Liabilities
2. Long Term Debt
3. Equity
4. Kinds of Companies
INCOME STATEMENT
1. Revenues
2. Expenses
3. Gross Profit
4. Auto Expense
5. Gains & Losses
TOOLBOX
1. The Workbook
2. General Ledger
3. Adjusting Entries
4. Journals
COST ACCOUNTING
1. Methods
2. Manufacture
3. Overhead
4. Construction
5. Gov. Contracts
OTHER TOPICS
1. Ratio Analysis
2. Combining
3. Non-Profits
4. Auditing
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ASSETS |
OTHER CURRENT ASSETS
Current assets are those assets that are expected be converted into
cash within a year (or the normal business cycle).
Accounts Receivable and
Inventory are discussed elsewhere. These
are always current assets.
Investments such as stocks, bonds, loan receivables are discussed
elsewhere, too. A particular item may be current if it is expected to be
converted into cash within a year.
Example
List a 90 day note receivable among the current assets because it will
become due in less than a year. |
Prepaid Expenses
Use this to record paid expenses that apply to future periods.
Example
Assume: You pay a 1 year insurance policy for $2,000. You prepare
financial statements each month.
Code the check to Prepaid Expenses. Each month credit this account for
1/12th of the payment and debit Insurance Expense. |
Tip
Don’t use this account unless the amounts are substantial. The amounts
are timing differences only. They are seldom worth the trouble. |
Lower of Cost or Market
This is a principle that applies to almost all assets. It applies to
inventory, to investments, and even to Accounts Receivable (through the
Allowance for Bad Debts account). It means the amounts on the Balance
Sheet should reflect reality. If the true value of the item is less than
its cost, then the true value must be the one used.
The reverse is NOT true. If the true value is greater than cost, cost is
still used. That is why the rule is called “LOWER of Cost or Market”.
Credit the assets and debit “Unrealized Losses” in the Income Statement.
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