ACTG 2011 Lecture Notes - Lecture 9: Weighted Arithmetic Mean, Quick Ratio, Perpetual Inventory
Document Summary
Structure of financial statement: statement of financial position, statement of comprehensive income. Understanding the difference between net income and other comprehensive income: statement of cash flow, statement of changes in owner"s equity, notes to the financial statements. Cash basis vs accrual basis accounting understanding the impact to income using either method. Long term contract: % completion method, zero profit (cost recovery method, completed contract method. Journal entries regarding setting up allowance, actual write off of ar and recovery of previously written off ar. Understanding the allowance methods credit sales method vs ar method: also understanding of ar method using the aging schedule. Reconciliation of ar and allowance for doubtful accounts. Inventory measurement lower of cost or nrv: understanding what needs to be included as part of inventory value, understanding difference between freight in and freight out, understanding the impact on purchase discounts.
