the accounting cycle

Accounting Information 1.1 Accounting Def ned 1.2 Financial Accounting 1.3 Managerial Accounting 1.4 A Quality Information System 1.5 Inherent Limitations 2.. The Accounting Profession a

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The Account ing Cycle

© 2009 Lar r y M Walt her, under nonexclusive license t o Chr ist opher J Skousen & Vent us Publishing ApS All m at er ial in t his publicat ion is copyr ight ed, and t he exclusive

pr oper t y of Lar r y M Walt her or his licensor s ( all r ight s r eser ved)

I SBN 978- 87- 7681- 486- 1

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The Accounting Cycle

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Contents

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Cont ent s

Part 1: Welcome to the World of Accounting

1 Accounting Information

1.1 Accounting Def ned

1.2 Financial Accounting

1.3 Managerial Accounting

1.4 A Quality Information System

1.5 Inherent Limitations

2 The Accounting Profession and Careers

2.1 Accounting and Professional Ethics

3 The Fundamental Accounting Equation

3.1 Assets

3.2 Liabilities

3.3 Owners’ Equity

3.4 Balance Sheet

4 How Transactions Impact the Accounting Equation

4.1 Edelweiss Collects an Account Receivable

4.2 Edelweiss Buys Equipment With Loan Proceeds

4.3 Edelweiss Provides Services to a Costumer on Account

4.4 Edelweiss Pays Expenses With Cash

4.5 Generalizing About the Impact of Transactions

4.6 Distinguishing Between Revenue and Income

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The Accounting Cycle

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Contents

5 The Core Financial Statements

5.1 Financial Statements

5.2 Income Statements

5.3 The Statement of Retained Earnings

5.4 Balance Sheet

5.5 Statement of Cash Flows

5.6 Articulation

5.7 Unlocking the Mystery of Articulation

Part 2: Information Processing

6 Accounts, Debits and Credits

6.1 Accounts

6.2 Debits and Credits

6.3 The Fallacy of “+/-” Nomenclature

6.4 The Debit/Credit Rules

6.5 Assets/Expenses/Dividends

6.6 Liabilities/Revenues/Equity

6.7 Analysis of Transactions and Events

6.8 Determining an Account’s Balance

6.9 A Common Misunderstanding About Credits

7 The Journal

7.1 Illustrating the Accounting Journal

7.2 Special Journals

7.3 Page Numbering

7.4 But, What are the Account Balances?

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360°

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