Accounting Entries CheatSheet
Accounting Entries CheatSheet
Accounting Entries CheatSheet
com
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Accounting Cheat Sheet
by John Gillingham, CPA All Rights Reserved
Accounting
Cheat Sheet
by John Gillingham, CPA All Rights Reserved
TEST VOCABULARY
BANK RECONCILIATION
Balance per bank
+ Deposits in transit
- Outstanding checks
+/- Errors, fees, returned items
Balance per books
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FOB shipping point Buyer’s books at year end, title passes when goods delivered
FOB destination Seller’s books at year end, title passes when goods received
Raw materials Direct costs of materials manufactured such as steel
Overhead costs Costs typically thought of as expenses that are added to cost of goods
Work in process (WIP) Goods in the process of being manufactured (assets)
ASSET SALES
Sale of inventory Increase AR, Increase sales, Decrease inventory, Increase cost of goods sold
Debits and credits Debit AR, Credit sales, Credit inventory, Debit cost of goods sold
Sell appreciated stock Increase cash, Increase realized gain, Decrease stock
Debits and credits Debit cash, Credit realized gain, Credit stock
Sell stock for a loss Increase cash, Increase realized loss, Decrease stock
Debits and credits Debit cash, Debit realized loss, Credit stock
Sell depreciated asset, gain Increase cash, Decrease asset, Decrease accumulated depreciation, Increase gain
Debits and credits Debit cash, Credit asset, Debit accumulated depreciation, Credit gain on sale
Sell depreciated asset, loss Increase cash, Decrease asset, Decrease accumulated depreciation, Increase loss
Debits and credits Debit cash, Credit asset, Debit accumulated depreciation, Debit loss on sale
BONDS
Bonds Financial instrument (agreement) issued by a company to borrow money from investors at a specified term (time) and rate
Issuer Company that is raising the money
Face value Amount that is repaid at the end of term
Stated coupon rate Interest that bond pays investor
Effective interest Rate of interest investor receives if the bond is purchased at a discount or premium
Premium Amount company is paid in excess of face value, often paid when coupon rate is greater than market rate
Premium = Price paid for bond - face value
Discount Amount below the face value paid for a bond often occurs when coupon rate is less than market rate
Discount = Face value - price paid for bond
Cost Price paid for asset (may include costs to Straight line Rate = (Cost - Salvage value / Useful life)
install)
Book value Cost - Accumulated depreciation Declining Book value x Depreciation rate
Salvage value Estimated scrap value at the end of asset (Accelerated method) Rate = Straight line rate x Applicable %
life
Accelerated methods Methods resulting in greater depreciation Applicable % = 150% for 150 DB and
during earlier years 200% for double declining
MACRS / ACRS / DDB Accelerated depreciation methods
Depreciation Expense taken on a physical asset over time Sum-of-years’-digits (Cost - Salvage value) X Applicable
Amortization Expense taken on an intangible asset over fraction
time (Accelerated method) Applicable fraction = Years of estimated
life remaining / Sum of years digits
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Accounting Cheat Sheet
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FINANCIAL STATEMENTS
ASSETS
BALANCE SHEET
Current assets To be used within one year of the balance sheet date
As of 12/31/2100 or longer, if the operating cycle is greater
Assets Current assets Cash and equivalents, accounts receivable, inventory,
Cash 1,497 prepaid expenses to be used within a year
Long-term assets Expected benefit greater than one year
Accounts receivable 400 Examples: property, plant, equipment, intangible assets (copyrights,
Allowance for doubtful accounts (90) trademarks, goodwill)
Equipment 200 Accounts receivable (AR) Cash due from customers who have
purchased goods or received services not yet paid for
Accumulated depreciation (40)
Inventory Goods for sale or manufacture, valued under GAAP at
Inventory - lower of cost or market
Total Assets 1,967 Prepaid expense Expenses paid in advance, considered an asset until
used (such as a two year insurance policy)
Accumulated depreciation | amortization The sum of all prior
Liabilities depreciation | amortization (contra asset) increases with a credit and
Accounts payable - offsets the value of depreciable assets reported at cost
Wages payable 300
LIABILITIES
Note payable 405 Current liabilities Obligations due in one year or less
Dividends payable - Long-term liabilities Debts owed to creditors, due in more than one
Total Liabilities 705 year from the balance sheet date
Accounts payable (AP) Money owed to creditors and vendors
Notes payable Debts owed to banks or other creditors based on
Equity written agreements
Common stock 1,010 Accrued expenses Expenses incurred before the end of the
(175) accounting period, but not yet paid for
Treasury stock
Deferred revenue Cash received in advance, but not yet
Retained earnings 427 earned
Total Equity 1,262 Long-term bonds payable Money borrowed to finance company
operations, due in more than one year
Liabilities + Equity 1,967
SHAREHOLDERS’ EQUITY
Common stock Sold to investors for ownership of a
corporation
Preferred stock Investors receive dividends before common
BALANCE SHEET FEATURES stockholders and usually do not have voting rights
Additional paid-in capital Investment received by corporation,
Balance sheet (statement of financial position) shows the in excess of par value per share (APIC = Issuance price - Par
ending balances of assets, liabilities, and equity at the end of the value)
accounting period Par (stated) value Per share amount on stock certificates, also
Mechanics Assets always equal liabilities plus equity, (which forms referred to as legal capital (no relation to market value)
the accounting equation) Retained earnings Sum of all previous profit and losses, less
dividends
Treasury stock Stock repurchased by company
Dividends Corporate profits paid to shareholders from retained
earnings (not an expense)
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Accounting Cheat Sheet
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Statement of owners' equity shows sources of capital (business funding), additional paid in capital and common stock breakdown, changes
in retained earnings, and treasury stock (stock repurchased)
Mechanics The statement starts with beginning balances and reconciles to ending period balance
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