D102 Financial Accounting OA COMPLETE Study Guide Western
Governors University
Table of Contents
Unit 2 - The Primary Financial Statement...............................................................................4
Module 1 - The Balance Sheet...........................................................................................................4
Lesson 1 - Assets, Liabilities & Owners Equity.................................................................................................4
Lesson 2 - The Accounting Equation..................................................................................................................5
Lesson 3 - The Elements of the Balance Sheet..................................................................................................5
Lesson 4 - Revenues & Expenses......................................................................................................................10
Lesson 5 - Organization of Income Statement.................................................................................................11
Lesson 6 - Net Income & Earnings per Share..................................................................................................12
Module 3- The Statement of Cash Flows.......................................................................................13
Lesson 7 - Activities of Cash Flow....................................................................................................................13
Lesson 8 - Sources & Uses of Cash Flow..........................................................................................................14
Lesson 9 - How Financial Statements Tie Together.......................................................................................14
Unit 3 - Accounting Cycle Mechanics.......................................................................................16
Module 4 - The Accounting Equation.............................................................................................16
Lesson 10 - T Accounts, Debits, & Credits.......................................................................................................16
Lesson 11 - Transactions & the Balance Sheets..............................................................................................19
Lesson 12 - Transactions & the Income Statement........................................................................................19
Module 5 - Recording Accounting Transactions...........................................................................20
Lesson 13 - The Difference Between Journals & Ledgers..............................................................................20
Lesson 14 - How are Journal Entries Used?....................................................................................................20
Lesson 15 - Creating Journal Entries................................................................................................................20
Lesson 16 - Chart of Accounts...........................................................................................................................21
Unit 4 - Completing the Accounting Cycle..............................................................................23
Module 6 - Adjusting Journal Entries.............................................................................................23
Lesson 17 - Revenue Recognition Principle....................................................................................................23
Lesson 18 - Matching Principle.........................................................................................................................24
Lesson19 - Accrual vs Cash Basis Accounting.................................................................................................24
Lesson 20 - Creating Adjusting Journal Entries..............................................................................................24
Module 7 - Closing the Income Statement....................................................................................29
Lesson 21 - Real vs Nominal General Ledger Accounts.................................................................................29
Lesson 22 - Closing Entries...............................................................................................................................29
Lesson 23 - Post Closing Trial Balance............................................................................................................32
Lesson 24 - Using Spreadsheets........................................................................................................................32
.......................................................................................................................................................34
,Unit 5 - Internal Controls..........................................................................................................35
Module 8 - Internal Controls...........................................................................................................35
Lesson 25 - Error Types....................................................................................................................................35
Lesson 26 - Important Internal Controls.........................................................................................................35
Lesson 27 -Business Controls...........................................................................................................................37
Lesson 28 - Reconciling Bank Accounts...........................................................................................................37
Unit 6 - Receivables: Selling a Product...................................................................................40
Module 9 - Receivables.....................................................................................................................40
Lesson 29 - Sales Discounts, Returns & Allowances.......................................................................................40
Lesson 30 - Allowance Estimation Methods....................................................................................................42
Unit 7 - Inventory & Cost of Goods..........................................................................................45
Module 10 - Inventory Related Transactions...............................................................................45
Lesson 31 - Inventory Costs..............................................................................................................................45
Lesson 32 - Purchases Discounts, Returns & Allowances..............................................................................47
Module 11 - Inventory Cost Flow Assumptions...........................................................................49
Lesson 33 - Physical Inventory Count..............................................................................................................49
Lesson 34 - Inventory Cost Flow......................................................................................................................50
Unit 8 - Investing & Accounting for Property, Plants, Equipment (PPE) & Intangible
Assets............................................................................................................................................51
Module 12 - Acquisitions, Depreciations & Disposal of Property, Plant & Equipment (PPE)
..............................................................................................................................................................51
Lesson 35 - Capitalizing vs. Expensing.............................................................................................................51
Lesson 36 - Straight-Line Method....................................................................................................................51
Lesson 37 - Accelerated Depreciation Methods..............................................................................................52
Lesson 38 - Recording Gains/Losses for Disposed PPE.................................................................................55
Module 13 - Acquisitions & Amortization of Intangible Assets.................................................57
Lesson 39 - Trademarks....................................................................................................................................57
Lesson 40 - Patents............................................................................................................................................58
Lesson 41 – Franchise........................................................................................................................................58
Lesson 42 - Amortization Expense...................................................................................................................58
Unit 9 - Completing the Operating Cycle................................................................................58
Module 14 - Accounting for Current Liabilities...........................................................................59
Lesson 43 - Payroll - Related Expenses & Withholdings................................................................................59
Lesson 44 - Compensated Absences.................................................................................................................60
Lesson 45 - Sales Taxes & Property Taxes......................................................................................................61
Lesson 46 -Contingencies..................................................................................................................................61
Module 15 - Long-Term Liabilities.................................................................................................62
Lesson 47 - Present & Future Value.................................................................................................................62
, Lesson 48 - Notes Payable & Mortgages..........................................................................................................62
Module 16 - Accounting for Equity Transactions........................................................................62
Lesson 49 - Common & Preferred Stock..........................................................................................................62
Lesson 50 - Retained Earnings.........................................................................................................................63
Lesson 51 - Cash Dividends...............................................................................................................................64
,
Governors University
Table of Contents
Unit 2 - The Primary Financial Statement...............................................................................4
Module 1 - The Balance Sheet...........................................................................................................4
Lesson 1 - Assets, Liabilities & Owners Equity.................................................................................................4
Lesson 2 - The Accounting Equation..................................................................................................................5
Lesson 3 - The Elements of the Balance Sheet..................................................................................................5
Lesson 4 - Revenues & Expenses......................................................................................................................10
Lesson 5 - Organization of Income Statement.................................................................................................11
Lesson 6 - Net Income & Earnings per Share..................................................................................................12
Module 3- The Statement of Cash Flows.......................................................................................13
Lesson 7 - Activities of Cash Flow....................................................................................................................13
Lesson 8 - Sources & Uses of Cash Flow..........................................................................................................14
Lesson 9 - How Financial Statements Tie Together.......................................................................................14
Unit 3 - Accounting Cycle Mechanics.......................................................................................16
Module 4 - The Accounting Equation.............................................................................................16
Lesson 10 - T Accounts, Debits, & Credits.......................................................................................................16
Lesson 11 - Transactions & the Balance Sheets..............................................................................................19
Lesson 12 - Transactions & the Income Statement........................................................................................19
Module 5 - Recording Accounting Transactions...........................................................................20
Lesson 13 - The Difference Between Journals & Ledgers..............................................................................20
Lesson 14 - How are Journal Entries Used?....................................................................................................20
Lesson 15 - Creating Journal Entries................................................................................................................20
Lesson 16 - Chart of Accounts...........................................................................................................................21
Unit 4 - Completing the Accounting Cycle..............................................................................23
Module 6 - Adjusting Journal Entries.............................................................................................23
Lesson 17 - Revenue Recognition Principle....................................................................................................23
Lesson 18 - Matching Principle.........................................................................................................................24
Lesson19 - Accrual vs Cash Basis Accounting.................................................................................................24
Lesson 20 - Creating Adjusting Journal Entries..............................................................................................24
Module 7 - Closing the Income Statement....................................................................................29
Lesson 21 - Real vs Nominal General Ledger Accounts.................................................................................29
Lesson 22 - Closing Entries...............................................................................................................................29
Lesson 23 - Post Closing Trial Balance............................................................................................................32
Lesson 24 - Using Spreadsheets........................................................................................................................32
.......................................................................................................................................................34
,Unit 5 - Internal Controls..........................................................................................................35
Module 8 - Internal Controls...........................................................................................................35
Lesson 25 - Error Types....................................................................................................................................35
Lesson 26 - Important Internal Controls.........................................................................................................35
Lesson 27 -Business Controls...........................................................................................................................37
Lesson 28 - Reconciling Bank Accounts...........................................................................................................37
Unit 6 - Receivables: Selling a Product...................................................................................40
Module 9 - Receivables.....................................................................................................................40
Lesson 29 - Sales Discounts, Returns & Allowances.......................................................................................40
Lesson 30 - Allowance Estimation Methods....................................................................................................42
Unit 7 - Inventory & Cost of Goods..........................................................................................45
Module 10 - Inventory Related Transactions...............................................................................45
Lesson 31 - Inventory Costs..............................................................................................................................45
Lesson 32 - Purchases Discounts, Returns & Allowances..............................................................................47
Module 11 - Inventory Cost Flow Assumptions...........................................................................49
Lesson 33 - Physical Inventory Count..............................................................................................................49
Lesson 34 - Inventory Cost Flow......................................................................................................................50
Unit 8 - Investing & Accounting for Property, Plants, Equipment (PPE) & Intangible
Assets............................................................................................................................................51
Module 12 - Acquisitions, Depreciations & Disposal of Property, Plant & Equipment (PPE)
..............................................................................................................................................................51
Lesson 35 - Capitalizing vs. Expensing.............................................................................................................51
Lesson 36 - Straight-Line Method....................................................................................................................51
Lesson 37 - Accelerated Depreciation Methods..............................................................................................52
Lesson 38 - Recording Gains/Losses for Disposed PPE.................................................................................55
Module 13 - Acquisitions & Amortization of Intangible Assets.................................................57
Lesson 39 - Trademarks....................................................................................................................................57
Lesson 40 - Patents............................................................................................................................................58
Lesson 41 – Franchise........................................................................................................................................58
Lesson 42 - Amortization Expense...................................................................................................................58
Unit 9 - Completing the Operating Cycle................................................................................58
Module 14 - Accounting for Current Liabilities...........................................................................59
Lesson 43 - Payroll - Related Expenses & Withholdings................................................................................59
Lesson 44 - Compensated Absences.................................................................................................................60
Lesson 45 - Sales Taxes & Property Taxes......................................................................................................61
Lesson 46 -Contingencies..................................................................................................................................61
Module 15 - Long-Term Liabilities.................................................................................................62
Lesson 47 - Present & Future Value.................................................................................................................62
, Lesson 48 - Notes Payable & Mortgages..........................................................................................................62
Module 16 - Accounting for Equity Transactions........................................................................62
Lesson 49 - Common & Preferred Stock..........................................................................................................62
Lesson 50 - Retained Earnings.........................................................................................................................63
Lesson 51 - Cash Dividends...............................................................................................................................64
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