Financial Accounting

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Financial Accounting Principles

Accounting rules are grounded in concepts organized and promoted in what is referred to as the Conceptual Framework. This means the rules are coordinated and logical. By learning the Conceptual Framework, one can often derive what an accounting rule might look like even before learning it. This makes this topic critical for students who are learning accounting.

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Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

The Role Played by Accounting InformationFree

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Organizations and Rules Governing AccountingFree

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Introduction to Financial StatementsFree

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FASB Conceptual Framework

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Financial Statements

Financial statements are the way accountants report the performance and account balances of a company. The four financial statements (in order of preparation) are the income statement, statement of retained earnings (or statement of shareholders' equity), balance sheet, and statement of cash flows.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Business Activities

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Balance Sheet

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Statement of Shareholders' Equity

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Income Statement

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Recording Transactions

Recording transactions reflects how each transaction impacts the business accounts, as well as using debits and credits to increase or decrease individual accounts. The total debits must equal the total credits for each journal entry entered. This is the first step in the accounting cycle.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

The Accounting Equation

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Debit, Credit, and T-Account

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Debit

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Credit

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T-Account

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Accounting Cycle

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Unadjusted Trial Balance

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Adjusting Process

After record transactions are posted, it is necessary to go through the adjusting process because account balances may be missing some important non-cash activity, such as using up of long term assets. As financial statements are prepared using accrual accounting, timing diffrences can occur between the flow of cash and the earning or using up of resources.These differences require adjusting journal entries to get the correct ending balances for the financial reports. Adjusting journal entries follow the same debit/credit rules as regular journal entries.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Accrual Basis vs. Cash Basis

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Accrual Basis

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Cash Basis

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Types of Adjusting Entries

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Adjusted Trial Balance

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Completing the Accounting Cycle

Completing the accounting cycle requires closing of all 'temporary' accounts (e.g., revenues, expenses, and dividends). This occurs only after all four financial statements have been prepared. Temporary accounts are closed to the Retained Earnings account on the balance sheet. After the closing entries have been made, only 'permanent' accounts (assets, liabilities and shareholders' equity) have balances as all temporary accounts have been reset to zero.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Preparing Financial Statements

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Closing

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Post-Closing Trial Balance

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Cash and Internal Control

Cash activtity on the books and at the bank generally differs, so a bank reconciliation is needed to update both the bank and book balances before reporting cash in the financial statements. Internal controls, especially those for cash, help businesses prevent or detect errors or fraud. Learn the simple but effective ways businesses help to avoid errors or worse.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Internal Control

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Internal Control for Cash

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Bank Reconciliation

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Petty Cash

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Receivables

Learn about "receivables", an asset type stemming from debts owed to companies by customers or others. You will learn about estimating bad debts and how accounts receivable should be presented on balance sheets.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Accounts Receivable

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Bad Debts Estimation

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Presentation of Accounts Receivable on Balance Sheets

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Notes Receivable

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Merchandising Inventory

This theme covers how to determine the costs of inventory and inventory types (perpetual vs. periodic). This also covers how to present inventory on financial statements as well as the impact inventory on cost flow assumptions.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Determining Cost of Inventory

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Perpetual vs. Periodic Inventory Systems

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Perpetual Inventory Systems

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Periodic Inventory Systems

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Valuation of Inventory

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Presentation of Inventory and Impact of Cost Flow Assumptions on Financial Statements

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Presentation of Inventory

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Impact of Cash Flows

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Inventory Errors

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Plant Assets and Natural Resources

Learn what amount should be included in the cost of long term assets, how they are "used up" (depreciated), how depreciation changes when assumptions change or betterments are added, and how to dispose of depreciated assets.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Capital Expenditure vs. Expenses

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Capital Expenditures

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Expenses

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Determine Cost of Property, Plant, and Equipments

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Change in Estimates

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Depreciation Methods

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Disposal of Property, Plant, and Equipments

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Presentation of Property, Plant and Equipments on Balance Sheets

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Natural Resources

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Intangibles

Intangibles covers assets, including those that are amortized and those with indefinite life. Further learn and explore the topics of "goodwill," amortization, and the cost of intangibles.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Cost of Intangibles

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Amortization

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Goodwill

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Short-Term Liabilities

Examine accounts payable, notes payable, and unearned revenues. Learn about their nature and when they are interest-bearing.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Accounts Payable, Notes Payable, and Unearned Revenues

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Accounts Payable

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Notes Payable

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Unearned Revenues

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Contingent Liabilities

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Time Value of Money

Would you rather receive \$100 now or in ten years? Learn how interest and other factors affect the present vs. future value of money. This theme will also cover annuities.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Present Value vs. Future Value

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Present Value

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Future Value

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Annuity

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Long-Term Liabilities

Learn about notes and bonds payable, as both are liabilities with a future benefit that mature after more (or longer) than one year. Understand the pricing of bonds and how to amortize premiums or discounts.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Notes Payable

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Bonds Payable

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Stockholders' Equity

Distinguish between common and preferred stock, as well as debt and equity. Learn about dividends, stock splits, and how to present stockholder equity. Explore the impact of buying back a firm's own stock and reissuing those shares (treasury stock).

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Corporations

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Debt vs. Equity

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Debt

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Equity

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Preferred Stock vs. Common Stock

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Preferred Stock

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Common Stock

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Dividends and Stock Splits

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Dividends

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Treasury Stock

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Presentation of Stockholders' Equity

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Investments

Where do companies invest and what do they invest in? This theme examines how to record the purchases and sales of debt securities and equity securities, which can be bought or sold between parties. Explore debt securities like municipals bonds and equity securities such as stock. Finally, investigate how to record the market value of certain classifications of stocks and bonds.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Debt Securities

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Equity Securities

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Statement of Cash Flows

Learn how to report cash inflows and outflows in this theme. These inflows and outflows can be classified into operating, investing or financing cash flows. Test your ability to show the operating cash flows using either the indirect method or direct method.

CompletionAccuracy

Accuracy is based on your most recent attempt.

Status

Your status is based on your weighted accuracy which accounts for the difficulty of the questions.

Your weighted accuracy is based on your most recent attempts compared to everyone else’s first attempts.

Re-answering questions correctly will improve your weighted average status.

Operating, Investing, Financing Activities

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Operating

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Investing

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Financing Activities

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Indirect vs. Direct Method

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