accting 301 study guide 2 min shen

accting 301 study guide 2 min shen - ACCT 301 Fall 2010...

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1 ACCT 301 – Fall 2010 Study Guide Chapter 4, 5, 6, 7 1. Cash and cash equivalents 1) Internal control over cash 2) Bank reconciliation: Balance per bank Balance per books + Deposits in transit + Bank collections - Outstanding checks - Electronic funds transfers +/- Bank errors + Interest earned - Service charges - NSF checks +/- Book errors Balance per the bank must equal The balance shown by the books 2. Reporting and interpreting short-term investments in other corporations 1) Held-to-maturity securities: Amortized cost method 2) Trading securities (<20%): Mark-to-market method Dr. Short-term investment-trading securities (+A) Cr. Unrealized gain on short-term investment (+ NI ) or Dr. Unrealized loss on short-term investment (- NI ) Cr. Short-term investment-trading securities (-A) 3) Available-for-sale securities (<20%): Market value method Dr. Short-term investment-AFS securities (+A) Cr. Unrealized gain on short-term investment (+ SE ) or Dr. Unrealized loss on short-term investment (- SE ) Cr. Short-term investment-AFS securities (-A) 3. Accounts Receivable 1) Direct write-off method (not permitted by GAAP) vs. allowance method (required by GAAP) 2) Calculation of bad debts expense h Income statement approach: credit sales revenue × bad debt loss rate h Balance sheet approach: age analysis
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This note was uploaded on 02/16/2011 for the course ACCOUNTING 301 taught by Professor Chen during the Spring '10 term at George Mason.

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accting 301 study guide 2 min shen - ACCT 301 Fall 2010...

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