Financial Accounting Study Guide

The Accounting Equation and Transaction Analysis

Master Assets = Liabilities + Equity framework and analyze how business transactions affect each element.

Journal Entries and the General Ledger

Apply debit/credit rules to record transactions in journals and post to T-accounts accurately.

The Trial Balance and Worksheet Preparation

Prepare unadjusted trial balances and use worksheets to organize accounting cycle completion.

Adjusting Entries and Accrual Accounting

Record deferrals, accruals, and estimates to match revenues and expenses to proper periods.

Preparing the Four Financial Statements

Construct income statement, retained earnings statement, balance sheet, and statement of cash flows.

Closing Entries and the Post-Closing Trial Balance

Close temporary accounts to retained earnings and verify ledger balances for the next period.

Cash and Internal Controls

Understand internal control principles and prepare bank reconciliations to safeguard cash assets.

Accounts Receivable and Bad Debt Estimation

Apply allowance method using percentage-of-sales and aging schedules to estimate uncollectible accounts.

Inventory Valuation Methods

Calculate cost of goods sold and ending inventory using FIFO, LIFO, and weighted-average methods.

Long-Term Assets and Depreciation Methods

Record acquisition, depreciation (straight-line, double-declining, units-of-production), and disposal of plant assets.

Current and Long-Term Liabilities

Account for notes payable, bond issuance, interest accruals, and current liability classifications.

Stockholders' Equity and Dividends

Record common stock, preferred stock, treasury stock transactions, and cash/stock dividend declarations.