Accounting
Barron's Business Review Books make excellent supplements to college textbooks. They are also popular as main texts in adult education courses and business brush-up programs. You'll find key business terms defined, important concepts reviewed, and pertinent examples of business transactions summarized. Topics examined in Accounting include the accounting equation, the various financial statements and their functions, the process of recording business transactions, special journals and...
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(back cover) Barron's Business Review Books make excellent supplements to college textbooks. They are also popular as main texts in adult education courses and business brush-up programs. You'll find key business terms defined, important concepts reviewed, and pertinent examples of business transactions summarized. Topics examined in Accounting include the accounting equation, the various financial statements and their functions, the process of recording business transactions, special journals and controls, assets and liabilities, inventories, payroll with up-to-date withholding tax tables and current rates as well as government regulations, and much more. FIFTH EDITION
Preface ixThe Accounting Equation 1The Art of Accounting 1What Is Accounting? 1Who Uses Accounting Information? 1What Information Does an Accountant Gather? 2What Are Assets? 2Keeping Track of Assets 2Types of Assets 3A Common Way to Express Assets 4Determining the Money Value of Assets 4How Is the Proprietor's Ownership Expressed? 5Proprietor's Contributions 5Assets = Capital 5How Are Borrowed Assets Expressed? 6Expressing Borrowed Assets 6The Accounting Equation 7What Are Revenue, Expenses, and Profit? 8Recording Revenue 8Recording Expenses 9How Revenue and Expenses Affect Capital 9Know the Concepts 11Practical Application 13Answers 19Financial Statements 24What Are Financial Statements? 24The Income Statement 25The Statement of Capital 27The Balance Sheet 28The Report and Account Forms 29The Classified Balance Sheet 30Know the Concepts 33Practical Application 34Answers 37Recording Business Transactions 46What Are Business Transactions? 46Information to Keep Track Of 47Changes Resulting from a Business Transaction 47Where to Record Business Transactions 47The Account 48The Standard Form of the Ledger Account 48Making Entries in Ledger Accounts 48Recording Asset Changes 50Recording Changes in Liability and Permanent Capital Accounts 51Analyzing Business Transactions 52Recording Transactions in Temporary Capital Accounts 53The Rule of Double-Entry Accounting 54Standard Form for the Ledger Account 55Other Forms of the Ledger Account 56Proving the Accuracy of Recorded Transactions 57The Journal 58The Purpose and Form of the Journal 59Recording Business Transactions in the Journal 60Recording Transactions in Both Journal and Ledger 61Transferring Transactions from the Journal to the Ledger 63Verifying Ledger Balances 65Know the Concepts 67Practical Application 68Answers 75Recording Adjusting, Closing, and Reversing Entries 87Adjusting Entries 87Types of Adjusting Entries 88Accruals 88Accrued Expenses 89Accrued Revenue 90Deferrals 92Deferred Expenses 92Deferred Revenue 94Adjusting Noncurrent Assets 96What Is Depreciation? 96Preparing the Worksheet 98How to Record Adjustments on the Worksheet 100Using the Completed Worksheet 101Closing Entries 103Eliminating the Temporary Account Balances 103Using the Income Summary Account 103Post-Closing Trial Balance 106Verifying the Ledger After Closing 106Steps in the Accounting Cycle 106Reversing Entries 107The Need for Reversing Entries 108When to Use Reversing Entries 110Know the Concepts 112Practical Application 113Answers 119A Trading Business 130How Service and Trading Businesses Differ 130Special Accounts for a Trading Business 131Methods of Determining Income 132Determining Net Sales 132Recording Sales, and Sales Returns and Allowances 133Recording Sales Discounts 134Determining the Cost of Goods Available for Sale 136Determining Net Purchases 136Determining the Merchandise Inventory 137Determining the Cost of Merchandise Sold 139Recording Daily Business Transactions 140Adjusting and Closing Entries 142Converting Beginning Inventory to an Expense 142Establishing Ending Inventory 142Preparing a Worksheet 144Reversing Entries 145Know The Concepts 146Practical Application 147Answers 152Special Journals and Controls 161What Are Special Journals? 161Kinds of Special Journals 162Sales Journal 163Cash Receipts Journal 169Purchases Journal 172Cash Payments Journal 174Bracket Entries 177Other Special Journals 178Know the Concepts 181Practical Application 182Answers 193Safeguarding Cash-Special Controls 211Internal Control 211Special Controls to Safeguard Cash 212Bank Reconciliation Statement 214Recording Adjusting Entries 219Petty Cash Fund 220Voucher System 223Know the Concepts 229Practical Application 230Answers 236Receivables and Payables 244Selling Goods and Services 244Recognizing Bad Debts 245Direct Write-off Method 246Net Sales Method 247Aging of Accounts Receivable Method 249Extending Credit 251Promissory Notes 251Interest-Bearing Promissory Notes 253Transferring Notes 258Know the Concepts 264Practical Application 265Answers 271Long-Life and Intangible Assets 279Long-Life Assets 279Using Long-Life Assets 279Determining Plant and Equipment Costs 280Allocating Plant and Equipment Costs 281Depreciation 282Recording Depreciation for Federal Income Tax Purposes 292Disposal of Plant Assets 293Depletion 296Intangible Assets 298Amortization 298Capital Improvements 300Know the Concepts 301Practical Application 302Answers 307Inventories 313What Is Merchandise Inventory? 313Inventories and the Trading Business 314Errors in Valuing Merchandise Inventories 314Types of Inventory Systems 317Determining the Cost of Inventories 321The FIFO Method 321The LIFO Method 322The Weighted Average Method 323Recognizing Significant Changes in Inventory Value 324Estimating Inventory Value 326The Gross Profit Method 326The Retail Method 327Know the Concepts 329Practical Application 330Answers 334Payroll 340What Is Payroll? 340Payroll Deductions 341Social Security Tax 342Federal Income Tax 344State and Local Taxes 357Disability Insurance Taxes 358The Payroll Register 359The Employee Earnings Record 360Payroll and Government Regulations 363Unemployment Compensation Taxes 364Calculating Employee Earnings 365The W-2 Form 367Know the Concepts 368Practical Application 369Answers 372Financial Statements for Partnership and Corporate Forms of Business Organizations 377Forms of Business Organizations 378The Partnership 378Characteristics of the Partnership 378Advantages and Disadvantages of the Partnership 380The Partnership Capital and Drawing Accounts 381Financial Statements of a Partnership 383The Corporation 385Characteristics of the Corporation 385Advantages and Disadvantages of the Corporation 386Corporate Capital 387Types of Stock 388Recording Stock Transactions 392Financial Statements for a Corporation 397Know the Concepts 399Practical Application 400Answers 405Appendix A 411Statement of Cash Flows 411Appendix B 414Accounting and the Microcomputer 414Electronic Spreadsheet 415Data Base 416Word Processor 417Graphics 417Networking and the Internet (World Wide Web) 418Glossary 420Index 434
