Advanced Accounting Flashcards

Ending Retained Earnings

NI+BRE-Div

Gross Profit Percentage

(S-SD-COGS)/(S-SD)

Return on Sales

NI/(S-SD)

Return on Assets

NI/Assets

Return on Equity

NI/ERE + CapStock

Working Capital

Current Assets -Current Liabilities

Current Ratio

Current Assets/Current liablities

Debt Ratio

Total liabilities / Total Assets

Debt-to-Equity Ratio

Total Liabilities / Stockholders Equity

EPS

NI - Div / Shares Outstanding

P/E Ratio

Selling Price / EPS

Paid-in Capital Excess of Par - Normal Balance

Credit

Dividend - Normal Balance

Debit

Dividends Payable - Normal Balance

Credit

Stock issuance - SOCF Section

Financing

Dividend Payment - SOCF Section

Financing

What does P/E mean?

Number of times the stock’s market price is trading over it’s EPS

What does EPS mean?

the earnings represented by each share of stock

What does DPS mean?

The dividends that have been declared per share of stock

DPS

Dividends Declared / Number of Shares Outstanding

What does market capitalization mean?

The market value of a corporation on the stock market

Market Capitlization

Current Market Price x Shares outstanding

What is treasury stock?

A contra-equity account that represents the stocks issued by a corporation that have been bought back

Treasury stock - Normal Balance

Debit

Units-of-production method

Estimates depreciation based on usage

Sym-of-years method

Method that has larger depreciation expenses early on by dividing remaining years with sum of years digits

Sum-of-years method formula

(Cost-Salvalge)x(remaining useful life/sum of digits)

Double-declining method

Method that has higher depreciation expenses early on by doubling the normal depreciation expense then going down later

Double-declining formula

\left(\frac{1}{UsefulLife}\cdot2\right)Begi\cap ingvalue

Depreciation Expense - Normal Balance

Debit

Accumulate Depreciation - Normal Balance

Credit

When is depreciation expense calculated?

Adjusted in the work sheet

Uncollectible accounts expense

Expense account used in both direct write off method and allowance method

What is the journal entry for a direct write off method

Debit Uncollectible accounts expense

Credit Accounts Receivable

Allowance for uncollectible accounts

Contra-asset account for accounts receivable - Estimates uncollectible account expense based on sales - Recorded in work sheet

Journal entry for allowance method

Debit Uncollectible Accounts Expense

Credit Allowance for uncollectible accounts

Book value

AR - AUA

Interest formula

Pr\in cipal\cdot Rate\cdot\frac{Days}{365}

prepaid expenses

paid in one period and reported as an expense later

accrued expenses

A cost that has been incurred but not paid for

reversing entry

when a company accrues expenses at the end of one period then reverses the entry at the beginning of the next

What goes in the account credited part of the purchases journal?

name of the vendor

accrued interest

revenue account for interest

journal entry for writing off account in allowance method

Debit allowance for uncollectible accounts

Credit Accounts Receivable(with specific name)

What is an accrual

A revenue or expense incurred but not yet paid or received in cash