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666
Subject Index 
 
Consumer credit rights, 313
         (internet exercise)
Convertible preferred stock, 569
Corporation
capital maintenance, 555
creating, 541, 562
closely held, 542
compared to proprietorship and    partnership, 72
defined, 71, 536
directors of, 539
ethical and social responsibility
    of, 544
features of, 72, 536–538, 555–556
financial statements of, Learning
   Goal 31
introduction to, Learning Goal 28
management issues, 544
non-profit and for profit, 542
organization chart, 539
publicly-held, 542
regulation, 543
stockholders’ equity transactions,    Learning Goals 29 and 30
taxes, 538, 631, 643–644
Cost principal, see historical cost
Cost/benefit constraint, 361
Creditors
claims compared to owners, 52
do not own borrowers assets, 156
Cumulative dividend feature, 568
Cumulative tests
Learning Goals 1 through 9, 210
Learning Goals 10 through 18, 375
Learning Goals 19 through 27, 527
D
Date of declaration, 565
Date of record, 565
Debits and credits
common mistakes with, 428
defined, 427
rules for use, 428
Deferred revenue, see unearned
         revenue
Deferred tax, 643-644
Deficit (retained earnings), 599
Discontinued operations, 632
Diluted earnings per share, 640
Dilution, 560
Dividends
cash, 564
dates for, 565
defined, 558
 
in arrears, 568
liquidating, 564
preference, 568
requirements for payment, 564
stock, 591–595
Double entry/single entry
          accounting, 94
Drawings (withdrawals)
defined, 190
element of owner’s capital, 411–412
illustrated, 414–416
in statement of owner’s equity, 294
normal balance, 413
not wages, 69
recording rules, 429
E
Earned surplus, see retained earnings
Earnings per share, 637–640
Earnings statement, see income        statement
Economic entity
compared to legal entity, 68
defined, 63, 68
Economic entity assumption, 64
Economic resources, defined, 4
Elements of financial statements,
       358, 362
Enron, 227, 280, 368
Entity types, 62
Equity
defined, 47
partnership, 71
proprietorship, 71, see also
   
owner’s equity
corporation, 72
EPS, see earnings per share
Ethics in accounting, 223–227
Event (transaction) analysis
accounting equation, 99
Diagrams, 99
T accounts, 455
Ex-dividend date, 565
Expense
confused with liability, 124
defined, 10, 112
effect on owner’s equity, 189
element of owner’s capital,
    411-412
normal balance, 413
recording rules, 429
resources consumed to add
   value, 9-10
Extraordinary gains and losses, 633
E
FASB, see Financial Accounting
        Standards Board
FICO score, 313 (internet exercise)
Financial Accounting Standards
        Board, 360, 367–368
Financial statements
articulation (linkage), 317
combined illustration, 311
corporate, Learning Goal 31
deceptive, 640
defined, 279
features compared, 312, 315
four general-purpose types, 279
order of preparation, 311–312, 339
part of conceptual framework of
   accounting, 362
prepared from trial balance, 508
qualities of information
   in, 281–282
Financing activities, defined, 308
Footing, 396
Footnotes, see full disclosure
Franchise, 154
Full disclosure, 280, 366–367
G
GAAP, see Generally Accepted
       Accounting Principles
Gain, 189
General journal
compared to ledger, 443
defined, 450
recording in illustrated, 451–453
posting to ledger from, 483–487
General ledger, see ledger
General partnership, 70
Generally Accepted Accounting
       Principles (GAAP), 358-360
Going concern assumption, 362
H
Historical cost, 40, 363–365
Income statement

compared to other financial
   statements, 311, 312, 316, 320

connection to balance
   sheet, 316
corporate, 628-635, 639
defined, 286
features of, 287-288
multiple-step, 628, 629, 630, 635
preparation of, 289-290
single-step, 628, 629, 630
 

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