Exam (elaborations)

dokumen.pub_understanding_financial_accounting_2nd_canadian_edition_complete_100%_guaranteed

2 views 0 purchase

Course
HUM 103 (HUM103)

Institution
Simon Fraser University (SFU )

1 Overview of Corporate Financial Reporting 1-1 Dollar Store Business Is No Small Change 1-1 Introduction to Financial Accounting 1-3 What Is Financial Accounting? 1-3 Users and Uses of Financial Accounting 1-4 Who Needs an Understanding of Financial Accounting and Why? 1-4 Forms of Busine...

[Show more]

Preview 4 out of 357 pages

View example

Uploaded on October 11, 2023
Number of pages 357
Written in 2023/2024
Type Exam (elaborations)
Contains Questions & answers

dokumenpubunderstandingfinancialaccounting2nd
overview of corporate financial reporting
accrual versus cash basis of accounting

docguru Member since 3 year 272 documents sold

CA$25.10

Add to cart

Add to wishlist

100% satisfaction guarantee
Immediately available after payment
Both online and in PDF
No strings attached

Contents
1 Overview of Corporate Financial Accrual Versus Cash Basis of Accounting 2-8
What Is the Difference between the Cash Basis of
Reporting 1-1 Accounting and the Accrual Basis of Accounting? 2-9
The Accounting Equation Template Approach 2-10
Dollar Store Business Is No Small Change 1-1 What Is the Accounting Equation Template Approach
Introduction to Financial Accounting 1-3 to Recording Transactions? 2-10
What Is Financial Accounting? 1-3 Using the Accounting Equation Template Approach
Users and Uses of Financial Accounting 1-4 to Analyze and Record Transactions 2-12
Who Needs an Understanding of How Is the Accounting Equation Used to Analyze
Financial Accounting and Why? 1-4 and Record Transactions? 2-12
Forms of Business Organization 1-9 What Are the Limitations of the Accounting
What Is a Corporation? 1-9 Equation Template Approach? 2-24
What Differentiates a Corporation from Other Forms of Financial Statements 2-26
Business? 1-10 How Do We Know if the Company Was
Activities of a Business 1-10 Profitable during the Accounting Period? 2-26
What Are the Three Categories of Business How Can We Tell if the Equity Position of Shareholders
Activities? 1-10 Changed during the Accounting Period? 2-27
What Are Examples of Financing Activities? 1-11 How Do We Determine the Company’s Financial
What Are Examples of Investing Activities? 1-12 Position at the End of the Accounting Period? 2-27
What Are Examples of Operating Activities? 1-12 How Can We Tell if the Company’s Cash Position
Financial Reporting 1-13 Changed during the Accounting Period? 2-28
What Information Is Included in a Set of Financial Using Ratios to Analyze Financial Statements 2-30
Statements? 1-13 How Do We Determine the Company’s Profit Margin? 2-31
What Is the Reporting Objective of the Statement of How Do We Determine How Effective the Company
Income? What Does It Include? 1-14 Has Been at Generating a Return on
What Is the Reporting Objective of the Statement of Shareholders’ Equity? 2-31
Changes in Equity? What Does It Include? 1-17 How Do We Determine How Effective the Company Has
What Is the Reporting Objective of the Statement of Been at Generating Profits Using Its Assets? 2-32
Financial Position? What Does It Include? 1-18
What Is the Reporting Objective of the Statement
of Cash Flows? What Does It Include? 1-22
3 Double-Entry Accounting and the
What Type of Information Is in the Notes to a Company’s Accounting Cycle 3-1
Financial Statements? 1-24
Balancing the Books When Bartering 3-1

2 Analyzing Transactions and The Double-Entry System 3-3
How Does the Double-Entry Accounting System Work
Their Effects on Financial and How Does It Overcome the Limitations of the
Statements 2-1 Template Method? 3-3
The Normal Balance Concept 3-4
A Growing Appetite for Financial Transparency 2-1 What Is the Normal Balance Concept and How
Introduction 2-3 Is It Used? 3-4
Accounting Standards 2-3 Understanding the Accounting Cycle 3-7
What Are Accounting Standards? 2-3 What Are the Steps in the Accounting Cycle? 3-7
Do All Canadian Companies Use the Same The Chart of Accounts 3-8
Accounting Standards? 2-3 What Is the Chart of Accounts? 3-8
Who Sets the Accounting Standards Used in Can Companies Change Their Chart of Accounts
Canada? 2-4 and What Are the Implications If They Do? 3-10
Qualitative Characteristics of Financial Information 2-5 Opening Balances 3-10
How Do the Standard Setters Determine What Is the Difference between Permanent
What Constitutes Useful Financial Information? 2-5 and Temporary Accounts? 3-10

, CONTENTS xiii

Transaction Analysis and Recording 3-11 How Does the Statement of Cash Flows Differ from the
How Are Transactions Identified? 3-11 Statement of Income? 5-5
How Are Transactions Recorded in the General Understanding the Statement of Cash Flows 5-7
Journal? 3-11 What Are the Categories of Cash Flows Presented in
Why Are Transactions Also Recorded in the General the Statement of Cash Flows and What Are Typical
Ledger? 3-18 Transactions Included in Each Category? 5-7
What Is the Purpose of Preparing a Trial Balance? 3-19 Why Is So Much Significance Placed on Cash Flows
Adjusting Entries 3-21 from Operating Activities? 5-8
What Are Adjusting Entries and Why Are They What Is the Difference between the Direct and Indirect
Necessary? 3-21 Methods of Preparing Cash Flows from Operating
What Is the Purpose of Preparing an Adjusted Trial Activities? 5-9
Balance? 3-26 What Are the Options for Classifying Cash Flows Related
Preparing Financial Statements and Closing Entries 3-26 to Interest and Dividends Paid and Received? 5-10
What Are Closing Entries and Why Are They Are There Investing and Financing Activities That Do Not
Necessary? 3-26 Appear on the Statement of Cash Flows? 5-11
Preparing the Statement of Cash Flows Using
4 Revenue Recognition and the the Indirect Method 5-12
How Is a Statement of Cash Flows Prepared Using the
Statement of Income 4-1
Indirect Method for Operating Activities? 5-12
Preparing the Statement of Cash Flows Using
Expanding the Cast to Bring in the Cash 4-1
the Direct Method 5-22
Revenue and Its Significance 4-2
How Is a Statement of Cash Flows Prepared Using the
What Is Revenue and Why Is It of Significance to Users? 4-3
Direct Method for Operating Activities? 5-22
Why Is Understanding How a Company
Interpreting Cash Flow Information 5-25
Recognizes Revenue of Significance to Users? 4-4
How Can the Information Presented in a Statement
Revenue Recognition 4-4
of Cash Flows Be Used to Manage a Company? 5-25
When Are Revenues Recognized? 4-5
What Can Cash Flow Patterns Tell Us? 5-27
Other Revenue Recognition Issues 4-13
Financial Statement Analysis 5-29
How Do the Right of Returns, Warranties, Consignment,
How Do We Determine What Portion of a Company’s
and Third-Party Sale Arrangements Affect
Liabilities Could Be Met with Cash Flows from
Revenue Recognition? 4-13
Operating Activities? 5-29
Statement of Income Formats 4-15
How Do We Determine How Much Net Free
How Does a Single-Step Statement of Income Differ
Cash Flow a Company Generates? 5-30
from a Multi-Step Statement of Income? 4-16
Statement of Comprehensive Income 4-18
What Is Comprehensive Income and How Does 6 Cash and Accounts Receivable 6-1
It Differ from Net Income? 4-18
Presentation of Expenses by Nature or by Function 4-19 Will That Be Cash or Credit? 6-1
How Does a Statement of Income Presenting Expenses Introduction 6-3
by Function Differ from One Presenting Expenses by Why Are Cash and Accounts Receivable of Significance
Nature of the Items? 4-19 to Users? 6-3
Financial Statement Analysis 4-21 Cash 6-4
What Is Meant by Earnings per Share, and How Is It What Is Included in the Definition of “Cash”? 6-4
Calculated? 4-22 At What Amount Is Cash Reflected on the Statement
of Financial Position? 6-4
5 The Statement of Cash Flows 5-1 Internal Control 6-4
Who Is Responsible for an Organization’s
The Dash for Cash 5-1 Internal Controls? 6-4
Introduction 5-3 What Are the Main Principles of Internal Control? 6-5
How Is “Cash” Defined? 5-3 What Are the Limitations of Internal Control? 6-7
Why Is the Statement of Cash Flows Bank Reconciliation 6-7
of Significance to Users? 5-4 What Is the Purpose of a Bank Reconciliation and Why
Differences between the Statement of Cash Flows Must It Be Prepared? 6-7
and the Statement of Income 5-5 How Is a Bank Reconciliation Prepared? 6-8

,xiv CONTENTS

Accounts Receivable 6-12 At What Value Is Inventory Reflected on the Statement of
What Are Accounts Receivable? 6-12 Financial Position? 7-20
Why Do Companies Sell on Account? 6-12 How Is the Lower of Cost or Net Realizable Value
Are There Any Additional Costs from Selling on Applied to Inventory? 7-21
Account? 6-13 What Types of Inventory Valuation Errors Can Happen
Bad Debts 6-14 and What Impact Do They Have on the Financial
At What Amount Are Accounts Receivable Reflected Statements? 7-21
on the Statement of Financial Position? 6-14 Gross Margin 7-22
The Allowance Method 6-16 What Is Gross Margin and Why Is It a Key Measure? 7-22
What Is the Allowance Method of Internal Controls and Inventory 7-23
Accounting for Bad Debts? 6-16 What Principles of Internal Control Can Be Applied to
Estimating Bad Debts under the Allowance Method 6-19 Inventory? 7-24
How Are Bad Debts Estimated under Financial Statement Analysis 7-25
the Allowance Method? 6-19 How Often Does the Company Sell through Its
The Direct Writeoff Method 6-23 Inventory? 7-25
What Is the Direct Writeoff Method and How Many Days Did It Take to Sell through the
When Is It Acceptable to Use It? 6-23 Company’s Inventory? 7-26
Cash-to-Cash Cycle 6-24 How Can Inventory Amounts Be Estimated? 7-27
How Do Companies Shorten Their Cash-to-Cash Appendix: Inventory Cost Formulas under
Cycle? 6-24 the Periodic Inventory System 7-28
Financial Statement Analysis 6-26 How Are Cost of Goods Sold and Ending Inventory
What Is Liquidity and How Is It Assessed? 6-26 Determined Using the Specific Identification, Weighted-
How Effective Has the Company Been at Average, and First-In, First-Out Cost Formulas under a
Collecting Its Accounts Receivable? 6-28 Periodic Inventory System? 7-28

7 Inventory 7-1 8 Long-Term Assets 8-1

Mini Cars; Maxi Inventories 7-1 A Canadian Icon’s Long-Term Assets 8-1
Introduction 7-3 Introduction 8-3
What Is Inventory? 7-3 What Are the Various Types of Long-Term Assets? 8-3
Why Is Inventory of Significance to Users? 7-4 Why Are Long-Term Assets of Significance to Users? 8-4
Types of Inventory 7-5 Valuation of Property, Plant, and Equipment 8-5
What Are the Major Classifications of Inventory? 7-5 At What Amount Are Property, Plant, and Equipment
What Goods Are Included in a Company’s Reflected on the Statement of Financial Position? 8-5
Inventory? 7-6 What Is Included in “Cost”? 8-6
Inventory Systems 7-7 What Happens When a Company Purchases
What Is a Periodic Inventory System? 7-8 Multiple Assets for a Single Price? 8-6
What Is a Perpetual Inventory System? 7-9 How Do We Account for Costs Subsequent to
What Are the Key Distinctions between Purchase? 8-7
Periodic and Perpetual Inventory Systems? 7-11 Can a Company Carry Property, Plant, and
How Does Management Decide Which Inventory Equipment at Their Fair Values? 8-8
System to Use? 7-11 Depreciation 8-8
Cost Formulas 7-13 Why Do We Depreciate Property, Plant, and
What Costs Are Included in Inventory? 7-13 Equipment? 8-8
What Are Cost Formulas and Why Are They Depreciation Methods 8-9
Necessary? 7-13 What Are the Methods Used to Depreciate Property,
How Are Cost of Goods Sold and Ending Inventory Plant, and Equipment? 8-9
Determined Using the Specific Identification, How Do We Choose a Depreciation Method? 8-16
Weighted-Average, and First-In, First-Out Cost How Do We Record Depreciation Expense? 8-16
Formulas under a Perpetual Inventory System? 7-16 Does an Asset’s Carrying Amount Tell Me What
How Do Companies Determine Which Cost It Is Worth? 8-17
Formula to Use? 7-18 How Do We Determine Depreciation for
Inventory Valuation 7-19 Partial Periods? 8-17

, CONTENTS xv

Is Depreciation Expense Recorded Every Period How Are Unearned Revenues Accounted for? 9-9
for Each PP&E Asset? 8-18 How Are the Liabilities Related to Gift Cards
Does the Choice of Depreciation Method Affect Accounted for? 9-11
Corporate Income Taxes? 8-18 How Are the Liabilities Related to Loyalty
Changes in Depreciation Methods 8-19 Programs Accounted for? 9-12
Can We Change Depreciation Estimates and How Are Warranties Accounted for? 9-14
Methods? 8-19 Current Liabilities Arising from Transactions
Impairment 8-22 with Employees 9-16
What Does It Mean If an Asset Is Impaired? 8-22 What Current Liabilities Arise from Transactions
Disposal of Property, Plant, and Equipment 8-23 with Employees? 9-16
How Do We Account for Disposals of Property, How Are Payroll Costs Accounted for? 9-17
Plant, and Equipment? 8-23 Why Are a Company’s Wage Costs Greater
Intangible Assets 8-25 Than What It Pays Its Employees? 9-19
What Are Intangible Assets? 8-25 Current Liabilities Arising from Transactions
At What Amount Are Intangible Assets Reflected on the with the Government 9-20
Statement of Financial Position? 8-27 What Current Liabilities Arise from Transactions
How Is Accounting for Intangible Assets Different from with Government? 9-20
Accounting for Property, Plant, and Equipment? 8-28 When Are a Company’s Taxes Due? 9-20
Goodwill 8-28 Current Liabilities Arising from Transactions
What Is Goodwill? 8-28 with Shareholders 9-21
At What Amount Is Goodwill Reflected on What Current Liabilities Arise from Transactions
the Statement of Financial Position? 8-30 with Shareholders? 9-21
How Is Goodwill Treated Differently Financial Statement Analysis 9-21
from Other Long-Term Assets? 8-30 How Do We Determine How Long a Company
Financial Statement Analysis 8-31 Takes to Pay Its Suppliers? 9-22
How Do We Determine the Relative Age of the
Company’s Long-Term Assets? 8-31
How Do We Assess How Effectively the Company 10 Long-Term Liabilities 10-1
Has Used Its Long-Term Assets? 8-32
Avoiding Pension Turbulence 10-1
Introduction 10-3
9 Current Liabilities 9-1 Why Are Long-Term Liabilities of Significance to
Users? 10-3
Customer Loyalty Is in the Books 9-1 Long-Term Liabilities Arising from
Introduction 9-3 Transactions with Lenders 10-4
Why Is the Distinction between Current and What Long-Term Liabilities Arise from
Non-Current Liabilities of Significance to Users? 9-3 Transactions with Lenders? 10-4
Valuation Methods 9-4 How Are Long-Term Loans and Mortgages
At What Amount Are Current Liabilities Reflected on the Accounted for? 10-4
Statement of Financial Position? 9-4 What Are Bonds and How Do They Differ from
Current Liabilities Arising from Transactions with Long-Term Loans? 10-8
Lenders 9-4 How Are Bonds Priced in the Marketplace? 10-10
What Current Liabilities Arise from Transactions How Does the Pricing of Bonds Affect a Company’s
with Lenders? 9-5 Interest Expense? 10-12
Current Liabilities Arising from Transactions with Long-Term Liabilities Arising from Transactions
Suppliers 9-8 with Other Creditors 10-14
What Current Liabilities Arise from Transactions What Long-Term Liabilities Arise from Transactions
with Suppliers? 9-8 with Other Creditors? 10-14
Why Are Accounts Payable Sometimes Considered Why Do Companies Lease Capital Assets? 10-14
“Free Debt”? 9-8 How Are Leases Accounted for? 10-15
Current Liabilities Arising from Transactions Long-Term Liabilities Arising from Transactions
with Customers 9-9 with Employees 10-16
What Current Liabilities Arise from Transactions What Long-Term Liabilities Arise from
with Customers? 9-9 Transactions with Employees? 10-16

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 docguru. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for CA$25.10. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

53249 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling

Exam (elaborations)

dokumen.pub_understanding_financial_accounting_2nd_canadian_edition_complete_100%_guaranteed

Document information

Subjects

Written for

Seller

Reviews received

Content preview