Friday, December 19, 2008

Book Review by Bishoy Ayoub: M. Guerrero's Poison Pill



Posted December 8, 2008, 10:51 PM EST:
:www.barnesandnoble.com


The poison pill is a work of art. It has the mystical touch of pan's labyrinth and the enduring pain of a man trying to find himself. With the many realities it reveals; a new realm unfolds and introduces love, betrayal, deception and torment. Ivon Bates character is brilliant in this read and is the "intangible asset". To say that this book is great is an understatement. It is a must read.

Back to main page

Thursday, December 18, 2008

Review of Marciano Guerrero's Poison Pill: by Chrissy Rodriguez




Posted December 15, 2008, 4:05 PM EST:www.barnesandnoble.com


The book had my full attention from the beginning. Mysterious and suspenseful. I couldn't put my book down without knowing what was going to happen next. I felt like I was in the book trying to figure everyone out. Who should you trust? Who should you be careful with? It was an exciting book!

Back to main page

Tuesday, November 25, 2008

Chapter 17 The Statement of Cash Flows

What is Cash Flows from Financing Activities?
The cash flows from financing activities is the section of the statement or cash flows that reports cash flows from transactions affecting the equity (sale and purchase of shares and payment of dividends) and debt (bonds) of the businesses.

What is Cash Flows from Investing Activities?
The cash flows from investing activities is the section of the statement or cash flows that reports cash flows from transactions affecting non-current assets; the most common transactions include purchase and disposal of investments and plant, property, and equipment; and lending money and collecting the loans.

What is Cash Flows from Operating Activities?
The cash flows from operating activities is the section of the statement or cash flows that reports the cash transactions affecting the determination of net income; it includes all the accounts for current assets and current liabilities.

What is a Direct Method?
The direct method is a method of reporting the cash flows from operating activities by adjusting each item in the income statement from the accrual basis to the cash basis.

What is Free Cash Flow?
The free cash flow is the amount of cash provided by operating activities adjusted for capital expenditures and dividends paid.

What is an Indirect Method?
The indirect method is a method of reporting the cash flows from operating activities by assuming that the net income figure is all cash and then adding and subtracting deferrals and accruals. In addition depreciation and losses must be added to net income, and gains subtracted.

What is Statement of Cash Flows?
The statement of cash flows is a financial statement that measures the liquidity of a company. It accounts for all the inflows and outflows of cash during a specific period of time.

What is Cash?
Cash is the ledger in the General Ledger that accounts for all the cash received and paid during a specified period of time. Cash is an accounting term and should not be confused with ‘money.’ Cash includes coins, currency, money orders, travelers checks, and other near money items.

Why is the Statement of Cash Flows so scrutinized by analysts?
It is carefully scrutinized because in the last decade many corporations have falsified their Income Statements and Balance Sheets. The Cash Flows statement is more difficult to tamper with since it has to tie into the bank accounts.

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers




Wednesday, October 29, 2008

Chapter 15 Long Term Liabilities

What is an Annuity?
The annuity is a series of identical cash payments to be received at fixed intervals.

What is a Bond?

The bond is a certificate of debt which bears interest for a long period of time.

What is a Bearer Bond?

A bearer bond is a bond that is not registered.

What is a Bond Indenture?
The bond indenture is the contract between a corporation issuing bonds and the bondholders. The indenture contains the face value of the bond, the contract interest rate, and the maturity date.

What is a Callable Bond?

A Callable bond is a bond subject to retirement at a stated dollar amount prior to maturity, at the option of the issuer.

What is Capital Lease?

A capital lease is a contractual arrangement that transfers substantially all the benefits and risks of ownership to the lessee, so that the lease is in effect a purchase of the property.

What is Carrying Amount?
The carrying amount is the balance of the bonds payable account (face amount of the bonds) less any unamortized discount or plus any unamortized premium.

What is a Contract Rate or Contractual Rate?
The contract rate is the periodic interest to be paid on the bonds that is identified in the bond indenture; it is expressed as a percentage of the face amount of the bond (e.g., 97, 98, and 104). Other names for contract rate are “coupon rate” and “stated rate.”

What is a Debenture Bond?
A debenture bond is an unsecured bond issued based on the excellent reputation of the issuer. Therefore, the bond issue doesn’t require the pledge of assets, treasury stock, or any other type of collateral.

What is a Discount?
The discount is the interest deducted from the maturity value of a note or the excess of the face amount of bonds over their issue price.

What is an Effective Interest Rate Method?
The effective interest rate method is the method of amortizing discounts and premiums that provides for a constant rate of interest on the carrying amount of the bonds at the beginning of each period; often called simply the “interest method.”

What is Face Value?

Face value is the amount of principal the issuer must pay at the maturity date of the bond.

What is Future Value?

The future value is the estimated worth in the future of an amount of cash on hand today invested at a fixed rate of interest.

What is Market Interest Rate?
The market interest rate is the rate investors demand for loaning funds to the corporation. The rate is fixed by the for forces of demand supply.

What is Operating Lease?

An operating lease is a contractual agreement that gives the lessee the right to use property (which belongs to the lessor) for a period of time. The title to the property remains with the lessor.

What is Premium?

The premium is the excess of the issue price of a stock over its par value or the excess of the issue price of bonds over their face amount.

What is Present Value?
The present value is the estimated worth today of an amount of cash to be received (or paid) in the future.

What is Present Value of an Annuity?
The present value of an annuity is the sum of the present values of a series of equal cash flows to be received at fixed intervals.

What is a Sinking Fund?
The sinking fund is a fund in which cash or assets are set aside for the purpose of paying the face amount of the bonds at maturity.

What is a Perpetuity?

A perpetuity is a bond that is issued without a maturity date.

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers






Reblog this post [with Zemanta]

Friday, October 17, 2008

Mike Barnicle: Misogynist - Was He Hatched by an Ostrich or a Reptile?

Nothing can be more insulting than a man who insults women.

If you ever want to see the image of a misogynist, just look at the picture of Mike Barnicle. Not only does he hate women, but he'd like to see them disappear from the face of the earth. Which makes me wonder if he was born of a woman, or a reptile--or even a mule.

Why would someone like Joe Scarborough allow Barnicle pollute the airwaves with the hate-speech of a man like Barnicle? Is it that hate-speech brings ratings? I can understand this man writing for the Huffington Blog --which is hate dump-- but on TV? That is too much for me. So, whenever he's a guest in Morning Joe, I simply switch channels.

Back to main page

Monday, October 13, 2008

Paul Krugman: While He Wins Nobel Prize, the USA Languishes as a Result of His Theory

Americans will not rejoyce in Krugman winning the Nobel Prize for Economics.

The closing of factories in the USA and loss of jobs are the direct result of Krugman's theory:
Produce overseas where is cheap and take advantage of economies of scale! Yes, indeed--we can see the results now.

As many greedy industrialists followed his advice, factories and jobs started to disappear in the USA. First came "outsourcing" and then "downsizing."

Lord Keynes once said, "In the long run we are all dead." And that's exactly what the enemies --anarchists, leftists, socialists, and communists-- of the USA are wishing: the death of a great industrial nation. But do not bet against the resilience of the people in this great country.

What is most disturbing to me is that Krugman is now giving advice on solving the financial crisis. Follow England's model he says. In other words: "Let's have socialism!"

I wonder if the New York Times will throw a party for him.

Back to main page

Saturday, October 11, 2008

Rachel Maddow: Marxist Dialectics in Action

To think that Marxist dialectics is still being practiced in America boggles the mind. And on TV, to boot! To hear liberal academicians still spew thesis, antithesis, and synthesis isn't so bad, but to hear such gibberish from a TV commentator in the 21st Century is baffling. Are we regressing?

Let me give you a paragraph of history:

Marx (using Hegel’s dialectics) attempted to discard the system of binary opposites. He attempted to replace it with a more universal triad of concepts: thesis, antithesis, and synthesis. The result was the now defunct Dialectic Materialism (thesis: the feudal class system; antithesis: the bourgeois class; synthesis: the proletariat). If you oppose two ideas, out of the clash a new one is born--supposedly.

More than 125 years later (after Marx's death) Rachel Maddow has resurrected the very same Marxist method of argument. When Hurricaine Ike was devastating Galveston and Huston, Rachel's political commentary was mirroring the natural disaster: thesis--water, antithesis--electricity, synthesis--McCain suspends Republican convention. Were this form of corrupted marxian dialectics not laughable, it would be dangerous.

Who had the insulting, if not dangerous idea, to put this woman to analyze American politics with "Dialectic Materialism" tools? Well, as long as she gets the ratings I supposed CNBC will be safe. But why not say what she is--an avowed Marxist? Is it too much to ask for honesty and full disclosure in the airwaves (radio and tv)?

Tune in and try to detect her marxist techniques. Once you get it you will understand why she is such a passionate advocate of Senator Obama: Obama--the most liberal senator--is as close to marxism as two coats of paint (pink and red). Might I remind readers that "Black Liberation Theology" is an offshoot of Marxist Liberation Theology as preached and published by the Jesuit priest Gustavo Gutierrez, in the 1960s.

When in the late 1960s Louis Althusser's "Structuralist Marxism" fell flat and stiff on its back (as if in a casket), I thought that was the last marxist gasp. Is another incarnation of such discredited and convicted ideology needed? Apparently Rachel Maddow thinks so, and so does CSNBC.

That she is a lesbian, I accept, just like millions of Americans do. But that she is a Marxist? To attempt to revive an extinct ideology that was the vehicle for the likes of Stalin and Lenin to slaughter forty million human beings, is morally reprehensible.

Back to main page

Thursday, October 9, 2008

Ch.14 Corporations: Dividends, Retained Earnings, and Income Reporting

What is Cash Dividend?
A cash dividend is a pro-rata distribution of profits in the form of cash (from retained earnings) to stockholders.

What is Declaration Date?
Declaration date is the date on which the board of directors formally declares dividends and announces it to stockholders.

What is Deficit?
Deficit is a debit balance in retained earnings.

What is Dividend?
Dividend is a distribution of profits (net income) in the form of cash, stock, script, or properties or merchandise.

Earnings Per Share (of Common Stock)
EPS is a measure of profitability which shows the amount of net income earned by each share of outstanding common stock. This measure is used in computing the Price/Earnings ratio.

Liquidating Dividend
A liquidating dividend is a dividend declared out of Paid-in-Capital.

Payment Date
Payment date is the date on which checks are mailed to stockholders.

Prior Period Adjustment
Prior period adjustments are the correction of financial statements for errors that happened in previous accounting years.

Record Date
Record date is the date when ownership of outstanding shares is determined for dividends purposes.

Retained Earnings
Retained earnings is the shareholders’ equity account into which the net income is transferred from the Income Summary. The normal balance of retained earnings is credit.

What is a Merger?
Merger is the joining of two corporations in which one company acquires all the assets and liabilities of another corporation, which is then dissolved.

What is Minority Interest?
Minority interest is the portion of a subsidiary corporation’s stock owned by outsiders.

What is ‘Parent Company’?
A parent company is a corporation owning all or a majority of the voting stock of the other corporation. (576)

What is P/E Ratio—Price-Earnings Ratio?
The Price-Earnings ratio is the ratio computed by dividing a corporation’s stock market price per share at a specific date by the company’s annual earnings per share (EPS).

What is Subsidiary Company?
A subsidiary company is a corporation that is controlled by a parent company.

What is Taxable Income?
Taxable income is the income according to the tax laws that is used as a base for determining the amount of taxes owed.

What are Temporary Differences?
Temporary differences are differences between taxable income and income before income taxes (IBIT). The differences are created because items are recognized in one period for tax purposes and in another period for income statement purposes. Such differences reverse or turn around in later years.

What are Temporary Investments?
‘Temporary investments’ is the balance sheet caption used to report investments in income-yielding securities that can be quickly sold and converted to cash as needed.

What is Trading Securities?
Trading securities are securities that management intends to actively trade for profit.

What is Unrealized Gain or Loss?
Unrealized gain or loss is the difference between the fair market value of the securities and their cost.

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers






Reblog this post [with Zemanta]

Wednesday, September 24, 2008

Chapter 13: Corporations: Organization and Capital Stock Transactions

1903 stock certificate of the Baltimore and Oh...Image via Wikipedia

What is Authorized Stock?
Authorized stock is the number of shares that the State Department in Albany authorized the corporation to sell, and which is specified in the charter.

What is Book Value per Share?
Book value per share is the ownership or equity a common stockholder has in the net assets of the corporation. (NOTE: net assets equal the total amount of the stockholders equity section).

What are By-Laws?
By-laws are the internal rules and regulations that the corporation follows to administer its business.

What is Cash Dividend?
A cash dividend is a distribution of earnings by a corporation to its shareholders.

What is the Charter?
The charter is the legal document that the State Department issues and which authorizes the creation of the corporation.

What is Common stock?
Common stock is the outstanding stock when a corporation has issued only one class of stock.

What is the Definition of ‘Corporation’?
A corporation is a business organized as a legal entity separate and distinct from its owners under state corporation law.

How Did Justice John Marshall Define ‘Corporation’?
In 1819 Chief Justice John Marshall defined a corporation as “an artificial being, invisible, intangible, and existing only in contemplation of law.

What is Cumulative Dividend?
Cumulative dividend is a feature of preferred stock that requires that the corporation pay the stockholder the current and the unpaid prior-year dividends before common stockholders receive their dividends.

What is Cumulative Preferred Stock?
Cumulative preferred stock is a class of preferred stock that has a right to receive regular dividends that have been passed (not declared) before any common stock dividends are paid.

What is Nonparticipating Preferred stock?
Nonparticipating Preferred Stock is a class of preferred stock whose dividend rights are usually limited to a certain amount.


What is No-par Value Stock?
No-par value stock is capital stock that has not been assigned a value in the corporate charter.

What are Organization Costs?
Organization costs are various costs and expenses incurred in the formation of a corporation.

What is Outstanding Stock?
Outstanding stock is issued stock which is in the hands of stockholders.

What is Paid-in-Capital?Paid-in-Capital is the contributed cash and other assets paid by shareholders to a corporation in exchange for capital stock.

What is Par Value?
Par value is the monetary value assigned to a share in the corporate charter.

What is Preferred Stock?
Preferred stock is a class of stock with preferential rights over common stock.

What is a Privately Held Corporation?
A privately held corporation is a corporation that has only a few stockholders and whose stock is not available for sale to the general public.

What is a Publicly Held Corporation?
A publicly held corporation is a corporation that may have many stockholders and whose stock is traded in organized security markets.

What is Retained Earnings?
Retained earnings is the account into which the net income is transferred from the Income Summary Account.

What is Retained Earnings Statement?
The Retained Earnings Statement is a financial statement that summarizes the changes in the retained earnings of a corporation for s specific period of time, such as a month, quarter, or year.

What is Stated Value?
Stated value is a value similar to par value, approved by the board of directors of a coporation for no-par stock.

What is Stock?
Stock is a certificate of ownership in a corporation.

How do we Define Stockholders?
Stockholders are the owners of a corporation.

What is Stockholders’ Equity?
Stockholders’ Equity is the owners’ equity in a corporation; also called ‘net assets.’

What is Treasury Stock?
Treasury Stock is the corporation’s own stock that has been issued and then reacquired from shareholders.

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers






Reblog this post [with Zemanta]

Monday, September 15, 2008

Chapter 12 Partnerships

View of Wall Street, Manhattan.Image via Wikipedia


What is a Partnership?
A partnership is an unincorporated business form consisting of two or more persons conducting business as co-owners for profit.

What is a General Partner?
A general partner is the partner who assumes unlimited liability in the partnership; as such the partner is personally liable for the debts of the partnership.

What is a Limited Partner?
A limited partner is a partner who has limited liability for the debts of the company; usually up to, and not exceed the amount of the partner’s investment in the business.

What is a Limited Partnership?
A limited partnership is a partnership in which the limited partners have limited liability. However, the partnership must have at least one general partner with unlimited liability.

What is a Limited Liability Company—LLC?
An LLC is a type of partnership that is usually organized for a limited period of time, with one or more general partners, and limited partners called members.

What is a Limited Liability Partnership?
A LLP is a partnership of professionals organized to protect the limited partners from unlimited liability, such as legal suits for malpractice.

What is Income (and Loss) Ratio?
The income ratio is the percentage or proportion used for dividing net income and net loss in a partnership.

What is Partnership Liquidation?
Liquidation is the winding up process when a partnership goes out of business.

Schedule of Cash Payments
Is a schedule that shows the distribution of cash to the partners in partnership liquidation.

What is Partnership Dissolution?
A partnership occurs when a new partner is accepted or when an existing partner leaves the company. However, such actions do not necessarily terminate the business, since in most cases the operating partners will opt to go on.

What is Capital Deficiency?
Capital Deficiency is the debit balance in the owner’s equity account of a partner.

What is No Capital Deficiency?
No Capital Deficiency occurs when all the partners’ capital accounts show credit balances.

What is a Partnership Agreement?
The partnership agreement is the formal written contract that creates a partnership.

What is Realization?
Realization is the sale of assets when a partnership is being liquidated.

What is a Statement of Partnership Equity?
It is a summary of the changes that have occurred—during a specific period of time—in each partner’s capital account. This statement is also called “Partners’ Capital Statement.”

What is Admission by Investment?
Admission by Investment occurs when a new partner joins the business by investing assets in the partnership, causing the total capital to increase.

What is Admission by Purchase of an Interest?
A new partner may buy an existing partner’s interest in the business, in a personal transaction. The total assets and total capital remain unchanged.

What is Withdrawal by Payment from Partners’ Personal Assets?
This situation occurs when a partner is bought out—and paid—by the other partners in a personal transaction, causing no change in either total assets or total capital.

What is Withdrawal by Payment from Partnership Assets?
This situation occurs when the withdrawing partner is paid with assets of the partnership, causing the total assets and total capital to decrease.

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers




Friday, September 5, 2008

Updike and Hemingway, Use of Infinitives

Of all the nuances of the English language, what fascinates me the most are:

(1) The Infinitives and (2) The Absolutes.

Let's talk about Infinitives first; we'll talk of the latter some other time.

Why wordsmiths such as Wilkie Collins, Updike, and Hemingway write lyrical prose without appealing to adjectives? Such a troublesome question!

The answer is that they employ adjectives, but in a disguised manner.

Let’s say you find the following sentence:

Angelina Jolie’s are the lips to kiss.

'To kiss' is an infinitive (verbal) being used as an adjective since 'to kiss' modifies the noun lips. There are other twenty uses of the infinitive—but enough for today. In a soon to appear blog I will post my thoughts of how acrobats of the English language such as Hemingway and Updike, accelerate their prose by means of the masterful use of Absolutes.

Senada Selmani, model

To write great blogs, e-mails, term papers, essays, or fiction - Get Mary Duffy's

Sentence Openers




Itching to Become a Writer?


Visit Mary Duffy's Storefront

Wednesday, September 3, 2008

Ch9 Accounting for Receivables

What is an Account Receivable?
An account receivable is a claim against a customer created by selling merchandise or services on credit.

What is Accounts Receivable Turnover?
The accounts receivable turnover is the relationship between net sales and accounts receivable, computed by dividing the net sales by the average net accounts receivable; it measures how frequently during the year the accounts receivable are being converted to cash.

What is Aging the Receivables?
Aging the receivables means analyzing the accounts receivable and classifying them into groups according to how old or past due they are. The older the account has gone uncollectible the higher the probability that it will not be collected.

What is the Allowance Method?
The allowance method is the method of accounting for uncollectible accounts that provides an expense for uncollectible receivables in advance of their write-off.

What is Contra Asset?The contra asset is an asset offset against another asset.

What is Direct Write-off Method?
The direct write-off method is the method of accounting for uncollectible accounts that recognizes the expense only when accounts are judged to be worthless; it is a method preferred by small businesses.

What is a Dishonored Note Receivable?
A dishonored note receivable is a note that the maker fails to pay on the due date.

What is Maturity Value?
The maturity value is the amount that is due at the maturity or due date of a note.

What is Note Receivable?
The note receivable is a customer’s written document that contains the promise to pay an amount and possibly interest at an agreed-upon rate.

What is Number of Days’ Sales in Receivables?
The number of days’ sales in receivables is the relationship between sales and accounts receivable, computed by dividing the net accounts receivable at the end of the year by the average daily sales.

What is a Promissory Note?
The promissory note is a written and unconditional promise to pay a sum of money on demand or at a definite time.

What is Receivables?
Receivables is the name of the group of all money claims against other entities, including people, business firms, and other organizations.

What is Uncollectible Accounts Expense?
The uncollectible accounts expense is the operating expense incurred because of the failure to collect receivables.

What are the Two Bases of Estimating the Allowance?
The two bases or ways of estimating the allowance are: (1) percentage of sales, and (2) percentage of accounts receivable.

What does Write-Off mean?
Write off means to remove an account receivable that we feel it is worthless.

What do we mean by Trade Receivables?
Trade receivables are created by the sale of merchandise.

Assume the Direct Write Off method is used: How do you write off an uncollectible account receivable?
We write off the uncollectible account by debiting Bad Debts Expense and crediting Accounts Receivable.

Assume the Allowance method is used: How do you write off an uncollectible account receivable?

We write off the uncollectible account by debiting Allowance for Uncollectible Accounts and crediting Accounts Receivable.

What is the formula for Computing Simple Interest?
The formula is:
I = P x R x T
Where
I = interest
P = Principal
R = Rate (which may be expressed as (1) fraction 10/100 (2) decimal .10 (3) percentage 10%, or (4) In words: “Ten per cent.”

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers




Ch8 Internal Control and Cash

What is Bank Reconciliation?
Bank reconciliation is the analysis that shows the items responsible for the difference between the cash balance reported in the bank statement and the balance of the cash account in the ledger.

What is Cash?
Cash is the medium of exchange that includes coins, currency (paper money), checks, money orders, and money on deposit that is available for unrestricted withdrawal from banks and other financial institutions.

What are Cash Equivalents?
Cash equivalents are highly liquid investments that are usually reported together with cash on the balance sheet. Examples: Treasury Bills and Commercial Paper.

What is Cash Short and Over Account?
The cash short and over account is the account into which we record errors in cash sales or errors in making change.

What is Doomsday Ratio?
The doomsday ratio is the ratio of cash and cash equivalents to current liabilities.

What is Electronic Funds Transfer (EFT)?
EFT is a system in which computers rather than paper (money, checks, etc.) are used to effect cash transactions. EFTs are also called 'Wire Transfers.'

What is Petty Cash Fund?
The petty cash fund is a special fund set up to pay small expenditures.

What is Voucher?
The voucher is a special form for recording relevant data about a liability and the details of its payment.

What is Voucher System?
The voucher system is a set of procedures for authorizing and recording liabilities and cash payments.

What are Outstanding Checks?
Outstanding checks are checks recorded in the ledger but not yet paid by the bank.

What are Deposits in transit?
Deposits in transit are deposits that are included in the general ledger, but not in the bank balance.
Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers




Ch11 Current Liabilities and Payroll Accounting

Price-Earnings Ratios as a Predictor of Ten-Ye...Image via Wikipedia

What is Defined Benefit Plan?
The defined benefit plan is a pension plan that promises employees a fixed annual pension benefit at retirement, based on years of service and compensation levels.

What is Defined Contribution Plan?
The defined contribution plan is a pension plan that requires a fixed amount of money to be invested for the employee’s behalf during the employee’s working years.

What is Discount?
The discount is the interest deducted from the maturity value of a note or the excess of the face amount of bonds over their issue price. (Bonds are studied in Accounting 2).

What is Discount Rate?
The discount rate is the rate used in computing the interest to be deducted from the maturity value of a note.

What is Employee’s Earnings Record?
The employee’s earning record is a detailed record of each employee’s earnings.

What is FICA Tax?
Federal Insurance Contributions Act (FICA) tax used to finance social security programs for old-age retirement, disability benefits, survivors (orphans/widows), and health insurance for the aged (Medicare).

What are Fringe Benefits?
The fringe benefits are benefits—such as dental, eye, medical, Blue Cross, pension— provided to employees in addition to wages and salaries.

What is Gross Pay?
Gross pay is the total earnings of an employee for an employee for a payroll period.

What is Net Pay?
Net pay is gross pay less payroll deductions; the amount the employer is obligated to pay the employee.

What is Payroll?

The payroll is the total amount paid to employees for a certain period.

What is Payroll Register?
The payroll register is a special journal, multicolumn, used to assemble and summarize payroll data at the end of each payroll period.

What are Proceeds?The proceeds are the net CASH available from discounting a note payable.

What are Quick Assets?
Quick assets include cash and other current assets that can be quickly converted to cash, such as marketable securities and receivables.

What is Quick Ratio?Quick ratio is a financial ratio that measures the ability to pay current liabilities with quick assets (cash, marketable securities, accounts receivable).

What is Working Capital?
Working capital is the excess of current assets of a business over its current liabilities.

What is Contingent Liability?
A contingent liability is a potential liability that may or may not come to pass.

What is “Take Home Pay?”
Take Home pay is the next pay in the employees payroll check, or the gross earnings less deductions.

What is Vesting?
Vesting is the date at which the employee is entitled to the pension contributions the employer makes on his or her behalf. If a company offers vesting after 5 years of service, this means that the employee must stay with the company at least five years to own the pension contributions the employer made.

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers






Reblog this post [with Zemanta]

Tuesday, September 2, 2008

Ch7 Accounting Information Systems

What is an Accounting System?
An accounting system includes the methods and procedures used by a business to collect, classify, summarize, and report financial data for use by management and external users.

What is the Accounts Payable Subsidiary Ledger?
The Accounts Payable subsidiary ledger contains the individual ledger accounts of all suppliers, vendors, and creditors.

What is a Cash Payments Journal?
The Cash Payments Journal is a special journal in which all the cash payments made by check are recorded.

What is a Cash Receipts Journal?
The Cash Receipts Journal is a special journal in which all cash receipts are recorded.

What is a Controlling Account?
The Controlling account is the account in the general ledger that summarizes the balances of all the accounts in a subsidiary ledger. Another name used is “Control Account.”

What is the General Journal?The General Journal is the two-column form used for entries that do not “fit” in any of the special journals.

What is the General Ledger?
The General Ledger is the primary ledger that contains all of the balance sheet and income statement accounts.

What is the Purchases Journal?
The Purchases Journal is the special journal in which all items purchased on account are recorded.

What is the Revenue Journal?
The Revenue journal is the special journal in which all sales and services on account are recorded.

What are Special Journals?
Special Journals are designed to be used for recording transactions that are similar and therefore grouped to save time and effort in the recording process.

What is a Subsidiary Ledger?
A Subsidiary ledger is a ledger that contains individual accounts with a common characteristic.

What is a Schedule of Accounts Receivable Subsidiary Ledger?
A Schedule of Accounts Receivable is a list that contains the names and unpaid balances of customers. The total of the schedule must agree with the Accounts Receivable control account.

What is a Schedule of Accounts Payable Subsidiary Ledger?
A Schedule of Accounts Payable is a list that contains the names and open balance that a company owes to its creditors. The total of this schedule must agree with the Accounts Payable controlling account.

What are the Titles of the four earlier chapters we’ve studied?
Chapter 1, Accounting in Action
Chapter 2, The Recording Process
Chapter 3, Adjusting the Accounts
Chapter 4, Completing the Accounting Cycle.
Chapter 5, Accounting for Merchandising Operations
Chapter 6, Inventories

Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers




Ch6 Inventories

What is Average Cost Method?
The average cost method is the method of inventory valuation in which a weighted average unit cost is computed and used to arrive at the cost of the ending inventory.

What is First-in, First-out (FIFO) Method?
The FIFO method is the method of inventory costing based on the assumption that the Beginning inventory units and then the early purchases are sold first, leaving the later purchases in the ending inventory.

What is Last-in, First-out (LIFO) Method?
The LIFO method is a method of inventory costing based on the assumption that the last purchases are sold first, leaving the Beginning inventory units and the early purchases in the ending inventory.

What is Gross Profit Method?
The gross profit method is a method of estimating inventory cost that is based on the relationship of gross profit to sales.

What is Inventory Turnover?
The inventory turnover is the relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory. Low turonver is a sign of inefficiency or low sales.

What is Lower-of-cost-or-market (LCM) Method?
The LCM method is a method of valuing inventory that reports the inventory at the lower of its cost or current market value (replacement cost).

What is Net Realizable Value?
The net realizable value is the estimated selling price of an item of inventory less any direct costs of disposal, such as sales commissions.

What is Number of Days’ Sales in Inventory?
The number of days’ sales in inventory is the relationship between the volume of sales and inventory, computed by dividing the inventory at the end of the year by the average daily cost of goods sold.

What is Physical Inventory?
The physical inventory is a detailed listing of merchandise on hand.

What is Retail Inventory Method?
The retail inventory method is a method of estimating inventory cost that is based on the relationship of gross profit to sales.
Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers




Ch5 Accounting for Merchandising Operations

What are the two forms of the balance sheet?
The two forms of the balance sheet are Account form and Report form. The account form resembles the basic format of the accounting equation, with assets on the left side and the liabilities and owner’s equity sections on the right side. The report form shows the assets, liabilities, and owner’s equity in a downward sequence.

What are administrative expenses?
Administrative expenses are general expenses incurred in the administration of the business.

How do you find cost of Goods sold in the Periodic System?
We find cost of merchandise sold by subtracting the ending inventory from cost of merchandise available for sale.

What is a credit memorandum?
A credit memo is a form used by a seller to inform the buyer of the amount the seller proposes to credit to the account receivable due from the buyer.

What is a debit memorandum?
A debit memo is a form used by a buyer to inform the seller of the amount the buyer proposes to debit to the accounts payable due the seller.

Who pays for the transportation or freight cost under FOB destination?
The seller pays for the freight cost (debit Transportation out or delivery expense).

Who pays for the transportation or freight costs under FOB shipping point?
The buyer pays for the freight cost (debit Transportation In or Freight In).

How do you find gross profit?
We find gross profit by subtracting cost of merchandise sold from net sales.

How do you find income from operations?
We find Income from Operations by subtracting the Operating Expenses from Gross Profit.

What is inventory shrinkage?
The amount by which the merchandise for sale, as indicated by the balance of the merchandise inventory account, is larger than the total amount of merchandise counted during the physical inventory.

What is an invoice?
An invoice is a bill that the seller sends to the buyer.

What kind of account is merchandise inventory?
Merchandise Inventory is an asset account that shows the merchandise on hand (not sold) at the end of the accounting period.

What are the two forms of Income Statement?
The two forms of the income statement are: single-step income statement and multiple-step income statement.

What is the periodic method?
The periodic method is the inventory system in which the inventory records do not show the amount available for sale or sold during the period. When merchandise is purchase we debit the Purchases account rather than the Merchandise Inventory account.

What is the perpetual method?
The perpetual method is the inventory system in which each purchase and sale of merchandise is recorded in an inventory account.

What are Purchases Returns and Allowances?
From the buyer’s side, Purchase returns and allowances are the amount owed to the buyer for merchandise returned because of defects or damages.

What are Purchases Discounts?
Purchase discounts are the percentages taken by the buyer for early payment of an invoice.

What are Sales Discounts?
Sales discounts are cash discounts that the seller offers to their customers to give them an incentive to pay their invoices right away.

What are Sales Returns and Allowances?
Sales Returns and Allowances are given by the seller (to the buyer) because of damaged merchandise.

What are selling expenses?
Selling Expenses are expenses that are incurred directly in the selling of merchandise.

What are trade discounts?
Trade discounts are discounts from the list price in published catalogs or special discounts offered to certain classes of buyers.

What is Gross Profit Margin?
It is the percentage of each dollar remaining once the company has paid for the cost of the merchandise sold. The formula is:

GPM = Gross Profit / Net sales

What is Profit Margin?
The Profit Margin the percentage of earnings generated from revenue. It provides an idea of the firm’s pricing, cost structure, and efficiency.

PM = Net income / Net sales

Back to main page


Ch1 Accounting in Action

Ch2 Recording Process

Ch3 Adjusting the Accounts

Ch4 Completing the Accounting Cycle

Ch5 Merchandising Operations

Ch6 Inventories

Ch7 Accounting Information Systems

Ch8 Internal Control and Cash

Ch9 Accounting for Receivables

Ch10 PP&E, Natural Resources, and Intangible Assets

Ch11 Current Liabilities and Payroll


Ch12 Partnerships

Ch13 Corporations

Ch14 Corporations:Dividends, RE

Ch15 Long Term Liabilities

Ch16 Investment

Ch17 Statement of Cash Flows

Ch18 Financial Statement Analysis

Plato and Accounting

Price/Earnings Ratio

Plant Assets

Luca Pacioli and DaVinci


The secrets of 'no-doze' prose:
Mary Duffy's Sentence Openers