finance accounting

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finance accounting by Mind Map: finance accounting

1. chapter1

1.1. Form of business Org

1.1.1. Sole proprietoship

1.1.1.1. owed by one person

1.1.1.2. personally liable for debts

1.1.1.3. tax advantages

1.1.1.4. small service-type

1.1.2. partnership

1.1.2.1. owned by two or more persons

1.1.2.2. personally liable for debts

1.1.2.3. tax advantages

1.1.2.4. retail service-type

1.1.3. corporation

1.1.3.1. ownership in shares of stock

1.1.3.2. no personal liability

1.1.3.3. easier to raise funds

1.1.3.4. separate legal entity organized under state corporation law

1.2. users and uses of Financial information

1.2.1. internal

1.2.1.1. management

1.2.1.2. human resources

1.2.1.3. finance

1.2.1.4. marketing

1.2.2. external

1.2.2.1. IRS

1.2.2.2. investors

1.2.2.3. labor unions

1.2.2.4. creditors

1.2.3. ethics in financial reporting

1.3. business activity

1.3.1. financing

1.3.2. investing

1.3.3. operating

1.4. communicating with users

1.4.1. income statement

1.4.1.1. revenues

1.4.1.2. expenses

1.4.1.3. net/loss income

1.4.2. retained earnings statement

1.4.2.1. retained earnings (đầu tháng)

1.4.2.2. add/less: net/loss income

1.4.2.3. less: dividends

1.4.2.4. retained earnings (cuối tháng)

1.4.3. balance sheet

1.4.3.1. Assets

1.4.3.1.1. cash

1.4.3.1.2. accounts receivable

1.4.3.1.3. supplies

1.4.3.1.4. insurance

1.4.3.1.5. equipment

1.4.3.1.6. total assets

1.4.3.2. liabilities and stockholders'equity

1.4.3.2.1. Liabilities

1.4.3.2.2. stockholders'equity

1.4.4. statement of cash flows

1.4.4.1. cash flows from operating activities

1.4.4.1.1. receipts

1.4.4.1.2. payments

1.4.4.1.3. net/loss cash provided operating activities

1.4.4.2. from investing

1.4.4.3. from financing

1.4.4.3.1. issuance of common stock

1.4.4.3.2. issued note payable

1.4.4.3.3. payment of dividend

1.4.4.3.4. net/loss cash provided by financing activities

1.4.5. interrelationships of statements

1.5. Tootsie Roll's Financial statements

2. chapter2

2.1. the classified balance sheet

2.1.1. current assets

2.1.2. long-term investments

2.1.3. property, plant, and equipment

2.1.4. intangible assets

2.1.5. current liabilities

2.1.6. long-term liabilities

2.1.7. stockholders' equity

2.2. using the financial statements

2.2.1. ratio analysis

2.2.1.1. profitability ratios

2.2.1.1.1. earnings per share(EPS)=(net income - preferred stock dividends)/ average common shares outstanding- (start+end)/2

2.2.1.2. liquidity ratios

2.2.1.2.1. working capital= current assets- current liabilities when working capital is positive, there is greater likelihood that the company will pay its liabilities

2.2.1.2.2. liquidity ratios=current assets/ current liabilities

2.2.1.3. solvency ratios

2.2.1.3.1. khả năng trả lãi khi đến hạn - measure the ability of the company to survive over a long time

2.2.1.3.2. debt to total assets ratio=total liabilities/ total assets

2.2.2. using income statement

2.2.3. using the statement of stockholders' equity

2.2.4. using a classified balance sheet

2.2.5. using the statement of cash flows

2.2.5.1. free cash flow= cash provided by operations - capital expenditures - cash dividends

2.3. financial reporting concepts

2.3.1. the standard-setting environment

2.3.1.1. GAAP: generally accepted accounting principles: a set of rules and pratices, having substantial authoritative support that the accounting profession recognizes as a general guide for financial reporting purposes

2.3.2. characteristics of useful information

2.3.2.1. relevance

2.3.2.2. reliability

2.3.2.3. comparability

2.3.2.4. consistency

2.3.3. assumptions and principles

2.3.3.1. assumptions

2.3.3.1.1. going concern

2.3.3.1.2. monetary unit

2.3.3.1.3. economic entity

2.3.3.1.4. time period

2.3.3.2. principles

2.3.3.2.1. cost

2.3.3.2.2. full disclosure

2.3.4. constraints

2.3.4.1. materiality

2.3.4.2. conservatism

3. chapter 3

3.1. accounting transactions

3.1.1. asset=liabilities + tockholders'equity

3.1.2. liabilities=

3.1.3. stockholders'equity=common stock+retained earning

3.1.3.1. retained earning=revenues-expenses-dividends

3.2. the account

3.3. steps in the recording process

3.3.1. analyze the transaction

3.3.2. enter the journal

3.3.2.1. book of original entry

3.3.2.2. transactions recorded in chronological order(thứ tự thời gian)

3.3.3. transfer journal to ledger accounts

3.3.3.1. account arranged in sequence in which they are presented in the financial statement

3.4. the recording process illustrated

3.5. the trial balance

3.5.1. limitation

3.5.1.1. có thể vẫn balance khi

3.5.1.1.1. transaction is not journalized

3.5.1.1.2. a correct journal entry is not posted

3.5.1.1.3. a journal entry is posted twice

3.5.1.1.4. incorrect accounts are used in journalizing or posting

3.5.1.1.5. offsetting errors are made in recording the amount of a transaction

4. chapter 4: accrual accounting concepts

4.1. timing issues

4.1.1. accrual-basic

4.1.1.1. revenues : recognized when earned

4.1.1.2. expenses: when incurred (phát sinh)

4.1.1.3. recorded in the periods- events occur

4.1.2. cash-basic

4.1.2.1. revenues- recognized- cash received

4.1.2.2. expenses- recognized- cash paid

4.1.2.3. not in accordance with GAAP

4.2. the basics of adjusting entries

4.2.1. followed the accrual-basic

4.2.2. needed to ensure the revenue recognition and matching principles are followed

4.2.3. include one income statement and one balance sheet account

4.2.4. make every time - prepares financial statements

4.2.5. report correct amount on income and balance

4.2.6. adjusting entries for

4.2.6.1. accruals: nhận revenue trước cash

4.2.6.1.1. accrued revenue

4.2.6.1.2. accrued expenses

4.2.6.2. deferrals: nhận cash trước revenue

4.2.6.2.1. prepaid expenses

4.2.6.2.2. unearned revenues

4.3. the adjusted trial balance and financial statement

4.3.1. adjusted trial

4.3.1.1. purpose: to prove the equality of debit and credit in the ledger

4.4. closing the books

4.4.1. all the temporary accounts will have zero balances

4.4.2. purpose: post-closing trial balance: to prove the equality of the permanent account balances

4.5. quality of earnings

4.5.1. quality of earnings- provides full and transparent information

4.5.2. earning management - one- time items : prop up earnings numbers - inflate revenue : numbers in short-run - improper: Adjusting entries

5. chapter 5: merchandising operations -222

5.1. merchandising operation

5.1.1. operating cycles

5.1.1.1. sales revenue - cost of goods sold= gross profit - operating expenses= net income

5.1.2. flow of costs-perpetual and periodic inventory systems

5.1.2.1. perpetual inventory system: ghi nhận liên tục theo từng đơn hàng

5.1.2.1.1. Toàn bộ ghi vào tài khoản Inventory

5.1.2.2. periodic inventory system: ghi nhận theo khoảng thời gian nhất định

5.1.2.2.1. Có một tài khoản tạm thời: Purchase / Purchase return and allowances giao dịch xảy ra ghi hết vào đây cuối kỳ mới ghi vào inventory và kiểm đếm inv còn dư trong kho

5.2. recording purchases of merchandise

5.2.1. freight costs: chi phí vận chuyển

5.2.1.1. FOB Destination: seller trả

5.2.1.1.1. giảm Freight-out (SE-Delivery expense) và cash(A)

5.2.1.2. FOB shipping point: buyer trả

5.2.1.2.1. Tăng Merchandise Inventory (A) - giảm cash (A)

5.2.2. purchase returns (hàng lỗi trả về) and allowances (người là chấp nhận lấy hàng vs điều kiện giảm giá món hàng bị lỗi)

5.2.3. purchase discounts

5.2.4. summary of purchasing transactions

5.3. recording sales of mechandise

5.3.1. sales returns and allowances

5.3.2. sales discounts

5.3.3. Cost of good sold

5.3.3.1. Có 4 pp tính giá hàng tồn kho- cost of flow assumtion

5.3.3.2. FIFO LIFO Weighted Average Specific Identification

5.4. income statement presentation-235

5.4.1. sales revenues

5.4.2. gross profit

5.4.3. operating expenses

5.4.4. nonoperating activities

5.4.5. determining cost of goods sold-periodic system

5.5. evaluating profitability-241

5.5.1. gross profit rate (tỷ lệ lợi nhuận gộp - lợi nhuận từ việc bán hàng chưa trừ đi chi phí vận hành- trên doanh thu)

5.5.1.1. gross profit/net sale

5.5.2. profit margin ratio (tỷ lệ lợi nhuận thực trên tổng doanh thu)

5.5.2.1. net income/ net sale

6. Chapter 6: Reporting and Analyzing Inventory

6.1. Classifying Inventory

6.1.1. merchandise company

6.1.1.1. merchandise inventory

6.1.2. manufacturing company

6.1.2.1. Raw materials

6.1.2.2. Work in process

6.1.2.3. Finished goods inventory

6.1.3. Just-in-time (JIT) inventory method

6.1.3.1. Cung khi có cầu, giữ mức inven gần như bằng 0

6.2. Determining Inventory Quantities

6.2.1. Taking a physical inventory

6.2.2. Determining ownership of goods

6.2.2.1. Goods in transit

6.2.2.1.1. Vẫn là hàng tồn của người bán cho tới khi đưa tới tay người mua

6.2.2.2. Consigned goods

6.2.2.2.1. Là hàng bán hộ nên ko phải sở hữu của mình nên không ảnh hưởng tới hàng tồn kho của mình

6.3. Inventory Costing- ex: 285

6.3.1. In periodic system 3 cách tính cost of good sold- 3 cost flow methods

6.3.1.1. First-in, First-out (FIFO)

6.3.1.1.1. Trong kỳ lạm phát net income cao hơn

6.3.1.1.2. overstated net income

6.3.1.1.3. Bị đánh thuế nhiều hơn

6.3.1.2. Last -in, First-out (LIFO)

6.3.1.2.1. Understated ending inventory

6.3.1.2.2. Bị đánh thuê ít hơn

6.3.1.3. Average cost

6.3.2. reason to adopt inventory cost flow methods

6.3.2.1. Income statement effects

6.3.2.1.1. Khi giá tăng dùng FIFO sẽ cho nhiều net income hơn, người ta sẽ lạc quan hơn. Giá giảm thì dùng LIFO sẽ cho nhiều net income hơn. Khi có lạm phát giá sẽ tăng, xài FIFO sẽ tính ra nhiều net income hơn nhưng đó chỉ là lợi nhuận trên giấy không phản ánh được lợi nhuận kinh tế. (real) lúc này mức chênh lệch khi dùng FIFO và LIFO gọi là PLANTOM OR ILLUSORY. Tức là cái report net income is overstated in real terms. - 287

6.3.2.2. Balance sheet effects

6.3.2.2.1. Trong kỳ lạm phát, xài FIFO nó sẽ phản ánh giá của ending inventory gần đúng với giá hiện hành, còn xài LIFO thì nó tính ending inventory bằng cái giá của mặt hàng đó cách đây 10 năm tức là sẽ bị understated in terms of current cost

6.3.2.3. tax effects

6.3.2.3.1. Người ta vấn xài LIFO vì cùng mức thuế suất đánh vào, thì net income cao hơn sẽ bị đánh thuế cao hơn

6.3.3. Lower-of-cost-or-market (LCM)

6.3.3.1. theo kế toán bảo thủ: concept of conservation cho rằng khi giá thị trường của inventory thay đổi thấp hơn giá vốn, người ta phải ghi nhận giá của hàng tại kỳ đó theo mức giá thấp hơn để trách phóng đại tài sản.

6.4. Analysis of Inventory -ex: 292

6.4.1. Inventory turnover ratio

6.4.1.1. Tỷ số giữa cost of good sold và trung bình inventory - (begin+end)/2

6.4.1.2. Phản ánh tốc độ thanh lý hàng trong kho nhanh hay chậm

6.4.2. Days in inventory

6.4.2.1. 365 ngày chia cho inventory turnover ratio

6.4.2.2. Phản ánh số ngày mà một sản phẩm được giữ trong kho ko bị bán

6.4.3. Inventory turnover càng lớn thì days in inven càng nhỏ, inventory management tốt nhưng có khả năng lost sales - hay gặp ở cơ chế just-in-time inventory

6.4.4. LIFO RESERVE

6.4.4.1. lấy inventory sử dụng LIFO trừ đi inventory sử dụng FIFO