Debit side: the left side of a T account
Credit side: the right side of a T account
Increases in assets are recorded on the debit (left) side
Decreases in assets are recorded on the credit (right) side of an account
Balance of the asset account = debits c
Define liability: debt, obligation
Probable future sacrifice of goods or services
Based on a present obligation
Arising from a past event
An obligation that is 1) due within one year of the date of a company's balanc
Long-term assets: assets that we use/own > 1yr
(1) Property, Plant, and Equipment
Assets used in operation of business to generate revenue
Assets purchased with intention of holding and selling at a profit
THE STATEMENT OF CASH FLOWS
The Statement of Cash flows is needed to show the total change in cash, and the reasons for
the change. This information is not available from the other statements, since they are prepared
on an accrual basis. The Statement of
Compound Interest and the Time Value of Money
SIMPLE VS. COMPOUND INTEREST
Assume you deposited $1,000 into First National Bank, and another $1,000 into First State Bank. First National pays 5% simple interest, and First
State pays 5% interest compounded
LONG TERM LIABILITIES
Debt-financing vs. Equity-financing (borrowing vs. ownership)
Advantages of debt financing: doesnt dilute ownership
- Interest decreases taxable income
- May result in positive financial leverage
Disadvantages of debt financing: may
Inventory and the matching principle:
INVENTORY COST FLOW METHODS
Cost of inventory must be allocated between units sold during period (expense) and
units left on hand at end of period (asset)
Problem: Counting the number of items on
COMPARISON OF BUSINESS ORGANIZATIONS
Easy to establish
Ease of raising
May be difficult based
Accrual basis of accounting:
revenues are reported on the income statement when they are earned regardless of when
cash is received (revenue recognition concept)
expenses are reported in the same period as the revenues to which they relate (matching
Assets: resources owned by a business
- Cash, land, buildings, equipment, prepaid expenses, accounts receivable
- Claims/rights to assets are divided into
o Rights of creditors
Liabilities (debts of the business)
o Rights of owners
SOLUTIONS AT END OF EXAM
Match each description with the appropriate term. NOTE that the same letter is used to
identify more than one term. You may use a term once, more than once, or not at all. (2 points
Exam 1, Fall 2016
5 Points Each (1-10)
1. A crossover event that places the SRY sex-determining gene (normally on the Y chromosome) onto an
autosome can cause offspring that:
Loose X-inactivation in XX individuals
Review for Exam 1
This review is intended to be a study aid to help you organize course material and provide examples of
some types of questions you might see on the exam, but is not a comprehensive listing of every possible
COMPLETING THE ACCOUNTING CYCLE
The accounting cycle
2. RECORD transactions
in journal and post to
ledger (T) accounts
8. Prepare postclosing trial balance;
start new accounting period
7. Prepare for next
accounting period with
Original Sources of Tax Law
Internal Revenue Code of 1986
ex. IRC Sec 63(c)(2)(A)(i)
1. U.S. Treasury Regulations (Interpretive, Procedural and Legislative)
ex. Reg Se
Rev. Rul. 95-74
1995-2 CB 36.
(1) Are the liabilities assumed by S in the section 351 exchange described below liabilities for purposes of
sections 357(c)(1) and 358(d)?
(2) Once assumed by S, how will the liabilities in the section 351 exchange de
Handout Research Problems
Use the RIA Checkpoint or other internet tax service to answer the following
1. Locate the following IRS regulation citations and give a brief description of each:
a. Reg Sec 1.642(c)-5(a)(3).
Hempt Brothers, Inc. v. United States
United States Court of Appeals, Third Circuit, 1974.
490 F.2d 1172, cert. denied 419 U.S. 826, 95 S.Ct. 44 (1974)
ALDISERT, Circuit Judge.
[A cash method partnership transferred all its assets, including $662,820 in z
U.S. v. Charles J. Krall
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH DAKOTA.
835 F 2d 711 (8th Circ, 1987)
Submitted: August 31, 1987
Filed: December 15, 1987
Before McMillian, John R. Gibson and Fagg, Circuit Judges.
JOHN R. GI
HOW TO READ AND BRIEF COURT CASES AND REVENUE RULINGS
Reading and Understanding Court Cases
Most court cases are typically constructed in the following ways. First, the text of the
case presents a description of the facts of the t
IWA 1: Opinion Review
AggieLand, CPAs completed the audit of JaGuar Inc., a nonpublic entity, on February 1, 2017 for a December 31,
2016 fiscal year end. The audit team encountered no significant issues and found no material misstatements.
Tuesday September 19, 2017
Discussed the form and content of Exam 2 to be given in class on Thursday.
Answered questions and worked problems as requested.
For Thursday September 21, 2017
Continue your review for Exam 1 which will be given in class on Thur
Thursday August 31, 2017
Welcome back for the Fall Semester and ACCT 210!
Class format (please interrupt to ask questions or make comments at
Important: Help is available from me, my job is to a
Award: 10 out of 10.00 points
You received credit for this question in a previous attempt
The difference between total sales in dollars and total variable expenses is called:
net operating income.
the gross margin
INTRODUCTION TO ACCOUNTING and its use in business decisions
What is accounting? How do accounting and bookkeeping differ?
Who are the users of accounting information?
What is business? What are two primary objectives of every business entity?
How are bus