Chapter 6 - Merchandising Activities
Operating Cycle of a Merchandising Company
The operating cycle of a business is the time it takes a business to start with cash,
purchase inventory, sell the inventory, and finally collect cash from customers.
Chapter 1 - Information for Decision Making
Accounting links decision makers with economic activities and with the results of
Accounting Information Reported Results of Actions (decisions) Decision Makers
Actions (decisions) Economic Acti
Chapter 5 - The Accounting Cycle: Reporting Financial Results
Preparing Financial Statements
Publicly owned companies those with shares listed on a stock exchange have
obligations to release annual and interim information to their shareholders and to the
Chapter 4 - The Accounting Cycle: Accruals and Deferrals
At the end of the period, we need to make adjusting entries to get the accounts up to
date for the financial statements.
The accrual basis dictates that revenues be recognized when
Chapter 3 - The Accounting Cycle: Capturing Economic Events
The Role of Accounting Records
1. Establishes accountability for assets and transactions.
2. Keeps track of routine business activities.
3. Obtains detailed information about a particular transac
Chapter 14: Financial statement analysis
Financial Statements Are Designed for Analysis
Financial statements may be presented in various formats to help facilitate analysis. A
classified set of financial statements groups items with similar characteristic
Chapter 12: Profit and Changes in Retained Earnings
Reporting the Results of Operations
When a companys income-related activities include events not part of its normal
continuing operations, it must disclose this information. Reporting this information
Chapter 11: Shareholders Equity: Capital
Corporations are entities created by law that exist separately from their owners and
have rights and privileges. Ownership in a corporation can be publicly or privately
held. Owners of a corporation ar
Chapter 10: Liabilities
The Nature of Liabilities
Liabilities are present obligations of the entity arising from past events, the settlement
of which is expected to result in an outflow from the entity of resources embodying
economic benefits. Liabilities
Chapter 9: Property, Plant and Equipment, Intangible Assets and Natural
Property, Plant and Equipment
PPE assets are tangible assets that are held for use in the production of goods or
services, for rental to others, or for administrative purpos
Chapter 8: Inventories and the Cost of Goods Sold
The Flow of Inventory Costs
Inventory includes all goods that a company owns and holds for sale, regardless of
where the goods are located when inventory is counted. Inventory is reported as a
Chapter 7: Financial Assets
How Much Cash Should a Business Have?
How much cash should a business have? Every business needs enough cash to pay its
bills. However, a business that has too much cash on hand is losing the ability to earn
a return by investi
Chapter 2 - Basic Financial Statements
Introduction to Financial Statements
There are three fundamental financial statements used in accounting.
The income statement shows revenues and expenses.
The balance sheet is a listing of all asset, liability, and