Accounting Study Guide by AccountingInfo.com

Under the accrual basis accounting, revenues and expenses are recognized as follows:

Revenue recognition: Revenue is recognized when both of the following conditions are met:
    a. Revenue is earned.
    b. Revenue is realized or realizable.

Revenue is earned when products are delivered or services are provided.
Realized means cash is received.
Realizable means it is reasonable to expect that cash will be received in the future.

Expense recognition: Expense is recognized in the period in which related revenue is recognized (Matching Principle).

Under the cash basis accounting, revenues and expenses are recognized as follows:
    Revenue recognition: Revenue is recognized when cash is received.
   Expense recognition: Expense is recognized when cash is paid.

There are potential timing differences in recognizing revenues and expenses between accrual basis and cash basis accounting.

Four types of timing differences

    a.  Accrued Revenue: Revenue is recognized before cash is received.
    b.  Accrued Expense: Expense is recognized before cash is paid.
    c.  Deferred Revenue: Revenue is recognized after cash is received.
    d.  Deferred Expense: Expense is recognized after cash is paid.

[Journal entry on May 1, 2010]

[Journal entry on May 10, 2010]

[Journal entry on May 1, 2010]

[Journal entry on May 31, 2010]

$100,000 x 12% x 1/12 = $1,000 for each month.

Interest payable is a liability account.
Credit side of interest payable (a liability account) represents an increase.

[Journal entry on June 30, 2010]

Credit side of interest payable (a liability account) represents an increase.

Company pays $2,000 as interests for May and June.
Debit side of interest payable (a liability account) represents a decrease.

Revenue is recognized when Company A provides service. In this example, service is provided when time passes.

[Journal entry on May 1, 2010]

Unearned rent revenue is a liability account.
Credit side of unearned rent revenue (a liability account) represents an increase.

"Unearned revenue" accounts represent the amount of cash received before services are provided. Since services have not been provided yet, it is not revenue.

"Unearned revenue" accounts are liabilities of the company, because they should be paid back to the other party if service is not provided in the future.

[Journal entry on May 31, 2010]

Debit side of unearned rent revenue (a liability account) represents a decrease.
Credit side of rent revenue (a revenue account) represents an increase.

[Journal entry on June 30, 2010]

Debit side of unearned rent revenue (a liability account) represents a decrease.
Credit side of rent revenue (a revenue account) represents an increase.

[Journal entry on May 1, 2010]

Prepaid insurance is an asset account.
Debit side of prepaid insurance (an asset account) represents an increase.

[Journal entry on May 31, 2010]

Credit side of prepaid insurance (an asset account) represents a decrease.

[Journal entry on June 30, 2010]

Credit side of prepaid insurance (an asset account) represents a decrease.

[Journal entry on July 31, 2010]

Credit side of prepaid insurance (an asset account) represents a decrease.

• Real Estate Sales, ASC 360
• Property, Plant and Equipment, ASC 360
• Website Development Costs, ASC 350
• Internal-Use Software, ASC 350
• Intangibles Other than Goodwill, ASC 350
• Goodwill and Other, ASC 350
• Capitalized Advertising Costs, ASC 340
• Inventory, ASC 330
• Cost Method Investments, ASC 325
• Equity Method, ASC 323
• Investments – Equity Method and Joint Ventures, ASC 323
• Investments-Debt and Equity Securities, ASC 320
• Transfers of Securities: Between Categories, ASC 320
• Overview of Investments in Other Entities, ASC 320
• Investments in Debt and Equity Securities
• Receivables
• Notes Receivable
• Accounts Receivable
• Bank Reconciliation
• Cash and Cash Equivalents
• Interim Reporting, ASC 270
• Earnings per Share, ASC 260
• Accounting Changes and Error Corrections, ASC 250
• Statement of Cash Flows, ASC 230
• Income Statement, ASC 225
• Income Statement, Extraordinary and Unusual Items, ASC 225
• Presentation of Financial Statements, Discontinued Operations, ASC 205
• Comprehensive Income, ASC 220
• Balance Sheet, ASC 210
• Offsetting, ASC 210
• Presentation of Financial Statements, ASC 205
• Codification of U.S. GAAP, ASC 105
• Generally Accepted Accounting Principles, ASC 105
• Adjusting Entries
• Accruals and Deferrals
• Accrual Basis Accounting
• Closing Journal Entries
• Steps of Accounting Cycle
• Accounting Equation
• Debits and Credits
• Accounting Journal Entries
• Elements of Income Statement
• Operating Expenses
• Nonoperating Income and Expenses
• Net Income
• Profitability and Activity Ratios
• Multiple Step Income Statement Practice
• Elements of Balance Sheet
• Classified Balance Sheet
• Classification of Assets
• Classification of Liabilities
• Components of Stockholders' Equity
• Liquidity and Solvency Ratios
• Classified Balance Sheet Practice
• The Objective of Accounting
• Users of Accounting Information
• Generally Accepted Accounting Principles (GAAP)
• Characteristics of Useful Information
• Assumptions of Financial Reporting
• Types of Financial Statements
• Elements of Financial Statements
• Forms of Business Organizations
• Types of Business Activities
• Extraordinary and Unusual Items, ASU 2015-01
• Where can I find the text of IFRS standards?
• Accounting for Research and Development Costs

Principles of Accounting:  

This section provides study guides for students in the principles of accounting courses or introduction to financial accounting courses. 

U.S. Tax Code by Section 

U.S. GAAP Codification of Accounting Standards
GAAP Codification Updates
   
Sources of U.S. GAAP
U.S. GAAP by Topic
Hierarchy of U.S. GAAP 

Principles of Accounting Course Review
Intermediate Accounting Course Review
Advanced Accounting Course Review

Financial Statements
Examples of Financial Statements
Balance Sheet: Examples

Ratios for Financial Statement Analysis

Liquidity Analysis Ratios

Profitability Analysis Ratios Activity Analysis Ratios

Cash Flow Analysis Ratios

Capital Structure Analysis Ratios

Capital Market Analysis Ratios
 
Balance Sheet
Income Statement
Statement of Cash Flows

Basics of Journal Entries
Accounting Journal Entry Examples

More Examples of Journal Entries
 
Accounting Equation
Double Entry Recording of Accounting Transactions
Debit Accounts
Credit Accounts

Asset Accounts
Liability Accounts
Equity Accounts
Revenue Accounts
Expense Accounts

Accounting Cycle

Journals and Ledgers

Adjusting Journal Entries

Trial Balance

Accrual Basis vs. Cash Basis Accounting
Accrual Basis Accounting

Cash Basis Accounting

Accrual Basis Accounting

Revenue recognition

Expense recognition
  
Bank Reconciliation 
Accounts Receivable
Inventory Accounting 
Depreciation Methods 

Present Value, Future Value (PV, FV Conversion Tables)


Simple and Compound Interest Calculations

Accounting for General Users:  
 
A guide to accounting for users who are interested in understanding accounting reports.  This section explains what users need to know to understand and analyze accounting information provided in the financial statements.  No prerequisite is required to read this section.  

CPA and Accounting Profession

How to become a Certified Public Accountant (CPA)

Accounting is an information system.

Users of accounting information

Financial accounting for external users

Managerial accounting for internal users

Examples of Financial Statements
Financial Statements Index

Balance Sheet: Examples
Balance Sheet

Income Statement

Statement of Cash Flows

Statement of Stockholders' Equity

Annual Report Project Resources

Elements of Financial Statements (SFAC No. 6)

Balance Sheet provides information about financial position of a company.

Examples of Asset Accounts

Examples of Liability Accounts

Examples of Stockholders' Equity Accounts

Income Statement provides information about the performance of a company.

Earnings Per Share (EPS)
Revenue Recognition Principle
Examples of Revenue and Gain Accounts
Examples of Expense and Loss Accounts

Statement of Cash Flows provides information about the cash flow of a company.

Cash flow from operating activities

Cash flow from investing activities

Cash flow from financing activities

Intermediate Accounting:  

This section provides study guides for students in the intermediate accounting courses.  Following topics are discussed in this section.

Accounting Courses Online
 
Accounting for Cash and Receivables

Cash and bank deposits

Accounts receivable

Notes receivable

Allowance for doubtful accounts
Impairment of a Loan

Accounting for Inventories

First In First Out (FIFO)

Last In First Out (LIFO)

Dollar Value LIFO

Retail Inventory Method

Gross Profit Method

Lower of Cost or Market (LCM)

Investments in Debt and Equity Securities

Trading securities

Available for sale securities

Debt securities

Property, Plant, and Equipment (PP&E)

Acquisition costs of noncurrent operating assets

Retirement of noncurrent operating assets
Capitalization of interest cost
Impairment of Long-Lived Assets

Goodwill and Other Intangible Assets

Loss and Gain Contingencies
Extraordinary Gains and Losses
Discontinued Operations

Earnings per Share (Basic and Diluted EPS)

Depreciation Methods

Straight Line Depreciation

Declining Balance Method

Sum-of-the-years-digits Method

Accounting for Bonds Payable

Price of bonds payable

Discount on bonds payable

Premium on bonds payable

Amortization of discount and premium

Early extinguishment of debts

Stockholders' Equity

Common stock

Preferred stock

Par value

Additional paid-in capital

Retained earnings

Treasury stock (Cost method, par value method)

Dividends (Cash dividend, Stock dividend)

Stock split

Initial Public Offering (IPO)
Subsequent Events

Code of Professional Conduct for Accountants

Advanced Accounting:  

This section provides study guides for students in the advanced accounting courses.  Following topics are discussed in this section. 

Consolidated Financial Statements
Business Combinations
Accounting for Leases