Summary
Accounting Summary + Formula Sheet. Grade: 9.5
- Course
- Institution
Accounting Summary. All lectures and all formulas needed to pass this exam! Grade: 9.5
[Show more]
Seller
Follow
yoel0507
Reviews received
Content preview
AccountingSummary of all lectures
Formula sheet
Radboud University Nijmegen
Yoël Guijt
, Lecture, Chapter 1
Accounting and business environment
Why is accounting so important?
> Measure transactions, information, etc. Information to stakeholders
> Financial (=extern, pro table? invest?) vs Managerial (=intern, budgets, pro t)
> Everything based on rules of the GAAP; not managerial accounting, may go without those
regels, is mainly intern
> Info is relevant and faithfully representative;
>> Shows what it relevant for the rm and stakeholders
Accounting Assumptions:
> Economic entity, Cost principle, Monetary unit, Going concern
Accounting Equation: Assets = Liabilities + Equity
> Always in balance
> Assets: item or property owned by a rm to make pro ts in the future
> Liabilities; debts to creditors
> Equity: Owner’s capital, shares (revenues and expenses)
Equity = Owners capital - withdrawals + revenues - expenses
Transactions: involves exchange of economic resources, measurable in Monetary Units
Financial statements:
> Income statement + Owners Equity statement + Balance sheet + Cash ow statement
Income statement: Revenues - Expenses = Net income
Owners Equity: Begin capital + net income - withdrawals = New Capital
Balance sheet: Assets = Liabilities + Equity
Cash ows: Operating = Receipts - Payments
Investing = PP&E, Notes
Financial = All nancials
ROA = Return on Assets Net income / Average total Assets
Lecture, Chapter 2
Recording Business Transactions
What is an account?
> Element on the balace sheet, like ‘inventory’ or ‘cash’
> Detailed display of changes due to transactions in accounts
Double-entry accounting:
> Transactie always has 2 e ects on the balance sheet and the accounting equation
T-account:
> Increase on the left side (debit, afname aan de rechterkant, credit)
> Except for ‘Equity Accounts’ = Other way around (capital)
fl fi ff fi fi fi = fi fi fl
, Trial Balance:
> Sum up for every T-account (Debit or Credit balance)
> Debit & Credit is now evenly divided, is di erent than the balance sheet !
Debt-Ratio = Debt Ratio = Total liabilities / Total Assets
(> how many assets nanced with liabilities?)
Lecture, Chapter 3
The Adjusting Process
Cash basis vs Accrual Basis Accounting:
> Cash basis: Revenue recorded when cash received, Expenses recorded when cash
paid, not allowed under GAAP
> Accrual basis: Revenue recorded when earned, Expenses recorded when incurred, used
Time Period Concept:
> Fiscal year is 12 months, is about a month/quarter/year
Revenue recognition principle:
> Revenues recorded when earned, Service or a product delivered = earned (otherwise unearned)
The matching principle:
> Expenses recorded when incurred
> Expenses and Revenues are matched with the right period (not when paid, but when incurred)
Adjusting Journal Entries:
> Prepaids and Accruals; prepaid expenses, prepaid revenues, accrued revenues, accrues
expenses —> assigned to the right period = adjusting
Depreciation:
> Long-lived and tangible assets are being used up over time, are used to produce revenues
Depreciation Expense vs Accumulated Depreciation:
> Accumulated depreciation on the balance sheet
> Accumulated is a contra asset (depreciation increases? Credit accumulated!)
Prepaid Expenses: Net income = Overstated & Expenses = Understated
Unearned Revenues: Net income = Understated & Revenues = Understated
Accrued Expenses: Net income = Overstated & Expenses = Understated
Accrued Revenues: Net income = Understated & Revenues = Understated
Lecture, Chapter 4
Completing the accounting cycle
Income Statement = Net income = Revenues - Expenses (incl. depreciation)
Owners Equity = New Capital = Begin capital - withdrawals + net income
Balance sheet = Assets = Liabilities + Equity (= adjusted balance)
ff fi
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 EFT, 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 this summary from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller yoel0507. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy this summary for R97,66. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
82956 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy summaries for 14 years now