Other Notes

Chapter One: Welcome to the World of Accounting

Your goals for this “Welcome to the World of Accounting” chapter are to learn about:

The nature of financial and managerial accounting information.

The Accounting Profession and Careers

The accounting equation: Assets = Liabilities + Owners’ Equity

How Transactions Impact the Accounting Equation

The Four Core Financial Statements

Chapter Two: Information Processing

Your goals for this “information processing” chapter are to learn about:

Accounts, debits and credits

The journal

The general ledger

The trial balance

Computerized processing systems

T-Accounts

Chapter Three: Income Measurement

Your goals for this “income measurement” chapter are to learn about:

"Measurement triggering" transactions and events

The periodicity assumption and its accounting implications

Basic elements of revenue recognition

Basic elements of expense recognition

The adjusting process and related entries

Accrual- versus cash-basis accounting

Chapter Four: The Reporting Cycle

Your goals for this “reporting cycle” chapter are to learn about

Preparation of financial statements

The accounting cycle and closing process

The nature of "optional" reversing entries

Classified balance sheets

The importance of business liquidity and the concept of an operating cycle

Chapter Five: Special Issues for Merchants

Your goals for this “merchandising” chapter are to learn about

Merchandising businesses and related sales recognition issues

Purchase recognition issues for the merchandising business

An alternative inventory system: The perpetual method

Enhancements of the income statement

The control structure

Chapter Six: Cash and Highly-Liquid Investments

Your goals for this “cash” chapter are to learn about:

The composition of cash and how cash is presented on the balance sheet

Cash management and controls for receipts and disbursements

Reconciliation of bank accounts

The correct operation of a petty cash system

Accounting for highly-liquid investments known as “trading securities.”

Chapter Seven: Accounts Receivable

Your goals for this “receivables” chapter are to learn about

The costs and benefits of selling on credit

Accounting considerations for uncollectible receivables

Alternative approaches to account for uncollectibles

Notes receivable and interest, including dishonored obligations

Chapter Eight: Inventory

Your goals for this “inventory” chapter are to learn about:

The correct components to include in inventory

Inventory costing methods

The perpetual system for valuing inventory

Lower-of-cost-or-market inventory valuation adjustments

Two inventory estimation techniques: the gross profit and retail methods

Inventory management and monitoring, and the impact of errors