Mastering Financial Accounting Essentials: The Critical Nuts and Bolts

Acknowledgments.

CHAPTER 1 Creating Ledger Accounting.

Count Everything.

The Beginnings of Double-Entry Accounting.

Double-Entry Recording of Business Transactions.

Handling Debits and Credits.

Keeping Track of Data.

A Mathematical Description of Double-Entry Conventions.

Handling Income Items.

Determining Profit in the Simple Accounting Model.

Permanent Accounts Overview.

Temporary Accounts Overview.

Conclusion.

Questions.

CHAPTER 2 Accounting Conventions.

Reasons Accountants Develop Conventions.

Accounting Cycle.

Classification.

Comparability.

Conservatism.

Double-Entry.

Full Disclosure.

Focus on Addition.

Generally Accepted Accounting Principles (GAAP).

Going-Concern Value.

Journal Entry.

Matching.

Materiality.

Recognition.

Understandability.

Usefulness.

Valuation.

Verifiability.

Conclusion.

Questions.

CHAPTER 3 Balance Sheet.

Balance Sheet Contains Permanent Accounts.

Time Line of Cash Flows.

Types of Balance Sheet Accounts.

Presenting the Classified Balance Sheet.

Conclusion.

Question.

CHAPTER 4 Adding an Income Statement.

Temporary Accounts.

Using Temporary Accounts.

Types of Transactions Involving Temporary Accounts.

Income Accounts.

Single-Step Income Statement.

Multistep Income Statement.

Conclusion.

Questions.

CHAPTER 5 Timing and Accrual Accounting.

Journaling Accounting Transactions.

Cash Basis Accounting.

Accrual Basis Accounting.

Conclusion.

Questions.

CHAPTER 6 The Statement of Cash Flows.

Importance of Cash.

An Intuitive Way to Track Cash.

Standard Accounting Categories on the Statement of Cash Flows.

Using the Indirect Method to Document Changes in the Cash Position.

Using the Direct Method to Document Changes in the Cash Position.

Producing a Statement of Cash Flows Using the Indirect Method.

Producing a Statement of Cash Flows Using the Direct Method.

Conclusion.

Questions.

CHAPTER 7 Ensuring Integrity.

Internal Controls and Procedures.

Independent Auditing.

The Role of the User of Financial Statements.

Conclusion.

Questions.

CHAPTER 8 Financial Statement Analysis.

Restating Accounting Results.

Ratio Analysis.

Trend Analysis.

Industry Analysis.

Conclusion.

Questions.

Collected Questions.

Answers.

About the Author.

Index.