Summary

Summary of Financial Accounting (first year)

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Course
Accounting and financial reporting

Institution
Maastricht University (UM)

Book
Financial Accounting with International Financial Reporting Standards

This document summarizes all the main key points of the book I used in my first year at Maastricht University. This is therefore ideal to get the key concepts of accounting and be familiar with and attain a certain level in accounting.

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Summarized whole book? Yes
Uploaded on January 18, 2021
Number of pages 70
Written in 2019/2020
Type Summary

accounting
passive
active
accrual
financial ratios
inventories
adjusting
acoounts receivables
plant assets
current liabilities
non current liabilities
corporations
dividends
statements of cash flows
f

Book Title:Financial Accounting with International Financial Reporting Standards

Author(s):Jerry J. Weygandt, Paul D. Kimmel

Edition:Unknown
ISBN:9781119504306
Edition:4

Exam (elaborations)
Test Bank for Accounting Principles, 14th Edition by Jerry J. Weygandt.pdf
Exam (elaborations)
TEST BANK for Financial Accounting with International Financial Reporting Standards (IFRS) 4th Edition by Jerry Weygandt & Paul Kimmel | Complete 15 Chapters
Other
INSTRUCTOR MANUAL & TEST BANK for Accounting with International Financial Reporting Standards 4th Edition by Weygandt, Kimmel & Kieso.

Institution
Maastricht University (UM)
Education
International Business
Course
Accounting and financial reporting

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Accounting and
Financial reporting
Full summary 2020

Page |1

,Contents
Chapter 1: Accounting in action .................................................................................................... 5
Accounting Activities and Users.......................................................................................................... 5
Who uses accounting data? ................................................................................................................ 5
The Building Blocks of Accounting ...................................................................................................... 6
The Accounting Equation .................................................................................................................... 7
Analyzing Business Transactions ......................................................................................................... 8
Financial Statements ........................................................................................................................... 8
Career Opportunities in Accounting ................................................................................................... 8
Chapter 2: The recording process ............................................................................................... 10
Accounts, Debits and Credits ............................................................................................................ 10
The recording processes ................................................................................................................... 10
The Ledger and Posting ..................................................................................................................... 10
The trial balance................................................................................................................................ 11
Summary of recording the transactions ........................................................................................... 11
Chapter 3: Adjusting the Accounts .............................................................................................. 12
Accrual-Basis Accounting and Adjusting Entries ............................................................................... 12
Adjusting Entries for Deferrals .......................................................................................................... 14
Adjusting Entries for Accruals ........................................................................................................... 15
Adjusted trial balance and financial statements .............................................................................. 16
Alternative treatments of Deferrals (Appendix 3A) .......................................................................... 16
Financial reporting concepts (Appendix 3B) ..................................................................................... 17
Chapter 4: Completing the Accounting Cycle ............................................................................... 19
The worksheet .................................................................................................................................. 19
Closing the Books .............................................................................................................................. 19
Accounting cycle ............................................................................................................................... 21
Classified statement of financial position ......................................................................................... 22
Chapter 5: Accounting for Merchandise Operations .................................................................... 24
Merchandising Operations and Inventory Systems .......................................................................... 24
Chapter 6: Inventories................................................................................................................ 26
Classifying and Determining Inventory ............................................................................................. 26
Inventory Methods and Financial Effects ......................................................................................... 27
Effects of Inventory Errors ................................................................................................................ 29
Inventory Statement Presentation and Analysis .............................................................................. 30
Inventory Cost flow Methods in Perpetual Inventory Systems ........................................................ 30
Estimating inventories ...................................................................................................................... 31

Page |2

, LIFO Inventory method ..................................................................................................................... 31
Chapter 8: Accounting for Receivables ........................................................................................ 32
Recognition of Accounts Receivables ............................................................................................... 32
Valuation and Disposition of Accounts Receivables ......................................................................... 32
Notes receivables .............................................................................................................................. 34
Presentation and Analysis ................................................................................................................. 35
Companies should identify in the statement of financial position or in the notes to the financial
statements each of the major types of receivables. Short-term receivables appear in the current
assets section in the financial statement position. Short-term investments appear after short-term
receivables because these investments are more liquid. Companies report both the gross number
of receivables and the allowance for doubtful accounts.................................................................. 35
Chapter 9: Plant Assets, Natural Resources, and Intangible Assets ............................................... 36
Plant Asset Expenditures .................................................................................................................. 36
Depreciation Methods ...................................................................................................................... 37
Plant Asset Disposal .......................................................................................................................... 40
Natural Resources and Intangible Assets.......................................................................................... 41
Statement presentation and Analysis ............................................................................................... 42
Exchange of Plant Assets .................................................................................................................. 43
Chapter 10: current liabilities ..................................................................................................... 44
Accounting for Current liabilities ................................................................................................ 44
Reporting and Analyzing Current Liabilities ...................................................................................... 46
Chapter 11: Non-Current liabilities ............................................................................................. 48
Accounting for Non-Current Liabilities ............................................................................................. 48
Reporting and Analyzing Non-Current Liabilities .............................................................................. 48
Chapter 12: Corporations- Organization, Share, Transactions, and Equity .................................... 50
The Corporate Form of Organization ................................................................................................ 50
Accounting for Share Transactions ................................................................................................... 54
Dividends and Splits .......................................................................................................................... 55
Reporting and Analyzing Equity ........................................................................................................ 58
Statement of Changes in Equity ........................................................................................................ 58
Appendix 12B: Book value- Another per share Amount................................................................... 58
Chapter 14: Statement of Cash Flows ......................................................................................... 59
Statement of Cash Flows: Usefulness and Format ........................................................................... 59
Preparing the Statement of Cash Flows- Indirect method ............................................................... 60
Using Cash flows to Evaluate a Company ......................................................................................... 63
Statement of Cash Flows- Direct Method ......................................................................................... 63
Statement of cash flows- T-account approach ................................................................................. 65

Page |3

, Chapter 15: Financial Analysis- The Big Picture............................................................................ 66
Basics of Financial Statement Analysis ............................................................................................. 66
Ratio analysis .................................................................................................................................... 67
Sustainable income ........................................................................................................................... 69

Page |4

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