Identify the purpose of financial statements and their key elements.
Distinguish between BS and IS accounts.
Given any two items of assets, liabilities, or stockholders equity, calculate the missing
A = L
1. First-in, first-out inventory costing method using the price of merchandise purchased
first to calculate the cost of merchandise sold first
2. Gross profit method of estimating inventory estimating inventory by using the previous
years percentage of gr
1. Capital stock total shares of ownership in a corporation
2. Cash discount a deduction that a vendor allows on the invoice amount to encourage
3. Cash over a petty cash on hand amount that is more than a recorded amount
4. Cash payments j
Test 3 Review
April 15, 2014
Items that arent extraordinary are higher up on the income statement.
Higher earnings persistence and recurrence.
Materiality (how significant an item is to the company; large in monetary amount to
Chapter 3 Accounting Cycle at the End of a Period
January 29, 2014
I. Accrual-Basis Accounting (record rev when earned; record expenses w/ related rev).
A. Revenue and Expense Reporting
1. Revenue Recognition (record revenue in the period