Summary
very short summary FAR
- Course
- Institution
- Book
very short summary of financial accounting and reporting. All the important things are summarized en clearly summed up.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Intermediate Accounting 3rd Edition, by Gordon, Raedy & Sannella,
-
Manual of Intermediate Accounting IFRS 2nd edition
-
Manual of Intermediate Accounting IFRS 2nd edition
Seller
Follow
IRadboud
Reviews received
Content preview
Expenses ≠ expenditures Revenues ≠ receiptsNet income ≠ cash flow Net income ≠ cash flow
Depreciation - investment invoice - loan
Translate cash flows into accruals
Comprehensive income = Net income + Other comprehensive income
= interest expense
Free cash flow = net cash provided by operating
activities – capital expenditures – dividends.
Capital expenditures expenditures from investing activities (purchase of land/equipment)
Fair value adjustment unrealized holding loss
Unrealized holding gain = revaluation reserve fair value adjustment
, Two basic methods of revenue recognition and accounting for long-term construction type projects:
- Percentage-of-completion method (total cash flow – costs = expected gross profit)
exp. gross profit * (cost incurred during year / estimated total cost) = gross profit
(gross profit – gross profit recognized in previous years = gross profit of current year)
- Cost-recovery (Zero-profit) method gross profit = total cash flow – total costs
Gross method assume that customers won’t pay within discount period. Debit whole amount first.
Net method assume that customers pay within the discount period
Two methods to account for uncollectible accounts:
- Direct write off method (bad debt expense to accounts receivable)
- Allowance method (bad debt expense to allowance for doubtful accounts) (allo to acc recei)
Two types of systems for maintain inventory records:
- Perpetual system directly account for the cost of goods sold for each transaction
- Periodic system we do account for the cost of goods sold only in the end of the period
Inventory costs: Product costs: purchase price – import duties and taxes – transportation costs – handling costs
Period costs: selling expenses – admin exp. -
Direct costs incurred to sell shares: underwriting costs – accounting and legal fees – printing costs – taxes
Cost flow methods:
- Specific identification: iedere unit aparte kosten
- FIFO - Average cost
If an exchange lacks commercial substance, there is no gain or loss on the disposal
Residual value = price after the useful life – cost of disposal. Cost – residual value = deprecation base
Methods of depreciation:
cost−residual∨salvage value
- Straight line method depreciation charge=
estimated service life
( cost−residual value )∗hours this year
- Activity method depre ciation charge=
total estimated hours
- Diminishing method:
o Sum-of-the-years digits (expense – residual value) * years / (estimated useful life * (estimated useful life + 1)/2)
cost
o Declining-balance method depre ciation c h arge=
estimated useful life
depreciatie hoog naar laag
Impairment = A long-lived tangible asset is impaired when a company is not able to recover the asset’s carrying
amount (book value) either through using it or by selling it.
Recoverable amount (highest) = (fair value – costs to sell) or (value in use: PV of future cash flows)
recoverable amount, wat je krijgt > carrying amount, wat het waard is = no impairment
recoverable amount < carrying amount = impairment loss on impairment to acc. deprec.
Expensed = only to income statement
Capitalized = go to assets on balance
sheet
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller IRadboud. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.77. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
67096 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now