Goodreads helps you keep track of books you want to read. Want to Read saving…. Want to Read Currently Reading Read. Other editions. Enlarge cover. Error rating book. Refresh and try again. Open Preview See a Problem? Details if other :. Thanks for telling us about the problem. Return to Book Page. Preview — Financial Accounting by Jerry J. Weygandt ,. Donald E. Kieso ,. Paul D. This successful book continues to provide accountants with an understanding of the fundamental concepts necessary to use accounting effectively.
A look at more recent frauds such as the Bernie Madoff scandal have been added. Enhanced discussions of ethics and international accounting are presented. The coverage of non-cash items and their impact on decision making has been expanded. In addition, comprehensive case studies and problems help accountants tie the material together.
Get A Copy. Paperback , 6th Edition , pages. More Details Original Title. Other Editions 4. Friend Reviews. To see what your friends thought of this book, please sign up. To ask other readers questions about Financial Accounting , please sign up. Lists with This Book. This book is not yet featured on Listopia. Add this book to your favorite list ». Community Reviews. C deduct them from the book balance of cash.
D deduct them from the bank balance of cash. Which of the following demonstrates a poor internal control procedure? A The bookkeeper makes cash deposits and records journal entries related to cash, while the treasurer prepares the bank reconciliation. B The president, who does no bookkeeping, prepares the bank reconciliation each month. C The treasurer signs all checks after the bookkeeper prepares the supporting documents. D One bookkeeper prepares cash deposits and the other bookkeeper enters the collections in the journal and ledger.
Exercises Where, if at all, do items A to G listed below belong to in the following bank reconciliation? Checks written during June that had not cleared by June Bank service charges for June which were not known until the June 30 bank statement arrived.
Deposit made on June 30 that did not reach the bank until July 1. Upon reviewing the company's cash receipts book after June 30, it was discovered that the accounting clerk had neglected to post one receipt to the cash account. The bank incorrectly deducted the check of another company to the bank account during June.
The company was paid interest on its account by the bank. F The sales returns and allowances account should be reported as a deduction from sales revenue because it is a contra-revenue account. F Should be credit balance 5. A Exercises 1. C, F; 2. D, G; 4.
Assumes the first costs in are the first costs out. The oldest costs are included in cost of goods sold. The newest costs are included in ending inventory. Assumes the last costs in are the first costs out.
The newest costs are included in cost of goods sold. The oldest costs are included in ending inventory. Uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.
This method uses a weighted-average rather than a simple average. Financial Statement Effects of Inventory Costing Methods In times of changing prices, each method will produce differences in net income, stockholders' equity, and asset valuation amounts. It is a more conservative approach. Perpetual and Periodic Inventory Systems i Perpetual a. Up-to-date records are kept for inventory and cost of goods sold.
The cost of goods acquired during the period is a direct increase in the inventory account. The Purchases account is not used. The cost of goods sold during the period is a direct decrease in the inventory account. In addition, a cost of goods sold account is increased for a like amount. No up-to-date record exists for inventory. Inventory is updated once in a while periodically.
Physical count of inventory at year-end is required to derive the ending inventory amount. Goods acquired during the period are accumulated in the Purchases account. Cost of goods sold cannot be calculated until a physical count of the inventory is performed and an ending inventory value is determined. When the weighted average inventory method is used, ending inventory and cost of goods sold are valued at a different cost per unit. The beginning inventory of one accounting period becomes the beginning inventory amount of the next accounting period.
An understatement error in the ending inventory causes an overstatement of both net income and current assets in that year. Under the periodic inventory system, the balance in the inventory account changes each time a purchase or sale of inventory is recorded. Which of the following is true during periods of rising prices? Inventory at the end of the current period was understated because one bin of inventory was not counted or included in the ending inventory totals.
Because of this error, A net income for the period was overstated. B net income for the following period will be overstated. C the cost of goods sold for the current period was understated.
D total equity for the current year is overstated. How much cash was paid to suppliers in ? Ending inventory 2,? Gross margin? Expenses 20, 20, 20, Net income pretax? F Goods available for sale in dollars is divided by goods available for sale in units to determine the weighted average cost per unit. This unit cost is applied to both ending inventory and cost of goods sold.
This requirement is known as the LIFO conformity rule. F The ending inventory of one accounting period becomes the beginning inventory amount of the next accounting period.
F If ending inventory is understated, cost of goods sold is overstated and gross margin is understated. Therefore, net income would be understated on the income statement while current assets would be understated on the balance sheet. F Cost of goods sold is computed as goods available for sale minus ending inventory. They are usually classified as property, plant, and equipment fixed assets. These assets confer rights on the owner. They are evidenced by legal documents.
Examples include patents, copyrights, franchises, licenses, and trademarks. Acquisition Costs Acquisition costs are the net cash equivalent paid or to be paid for long-lived assets. Examples: - Costs to buy the asset include the invoice price less early payment discounts , sales taxes, legal fees, and transportation costs. Exception: self-constructed assets. The cash-equivalent cost of an asset received is measured as any cash given plus the current market value of the non-cash consideration given up.
If this value is not determinable, the current market value of what is received should be used instead. If a second-hand machine is purchased for productive use in a business, all renovation and repair costs on the used machine incurred by the purchaser prior to its productive use should be excluded from the cost of the asset.
The first step in recording the disposal of a long-lived asset is to recognize depreciation expense for the period of time since the last depreciation adjustment was made.
The systematic and rational allocation of the acquisition cost of natural resources to those periods in which the resources contribute to revenue is called depletion. Depreciation expense, as computed for financial reporting, has a direct effect on a corporation's cash flow. A special repair on a machine will extend the life of the machine an additional four years beyond the original estimated life of 6 years.
B a capital expenditure. C an ordinary repair and maintenance expenditure. D either A or B. Which of the following is the GAAP that requires the recording of depreciation? A materiality constraint B matching principle C cost principle D time period assumption 4. Which of the following assets are not depreciated? A buildings B office equipment C land D delivery vans 5. D all of the above. Required: Calculate depreciation expense under straight line and double declining balance for F Generally renovation and repair costs paid by the purchaser prior to a machine's use should be included in the cost of the machine.
These costs are usually capitalized unless they are not material accounts. F Depreciation itself requires no outflow of cash. The cash flow took place when the asset was paid for. However, depreciation has an indirect effect on cash since it affects the amount of income taxes to be paid. Whether a situation produces a contingent liability depends on two factors: i The liability must be probable, and ii The liability must be reasonably estimated.
The borrowing agreement specifies the amount borrowed, the interest rate imposed, and the repayment schedule. Fundamentally, liabilities are measured at their cash equivalent amount. When a liability is recorded, it includes the principle and interest to be paid.
Current liabilities are short-term and usually will be paid or satisfied within three months. Liabilities must be fully reported in conformity with the full-disclosure principle. A liability, to be reported on the balance sheet, must have a fixed, known amount to be paid in the future. A current liability is a short-term obligation that A will be paid within the current operating cycle.
B will be paid within one year of the balance sheet date. C will be paid in the longer of periods A and B. D does not affect liquidity. What is the current ratio? At the end of the accounting period, one-fourth of the deferred revenue had been earned, but unrecorded.
Which of the following rules about contingent liabilities is NOT true? A A contingent liability that can be estimated and is probable should be recorded. B A contingent liability that cannot be estimated and is probable should be recorded. C A contingent liability that cannot be estimated and is remote should not be recorded or disclosed.
D A contingent liability that can be estimated and is only reasonably possible should be disclosed but not recorded. F A liability is recorded at the principle only and the interest is recognized as it is incurred with the passage of time. F Current liabilities are short-term and usually will be paid or satisfied within one year or the operating cycle whichever is longer. F Fixed and known amounts to be paid are not required for liabilities to be reported on the balance sheet.
Warranty liabilities, for example, are based on estimates. However, this is not without risk and can result in losses to owners. Role of Stock - Authorized number of shares is the maximum number of shares that can be issued by a corporation as specified in its charter. This should be a larger number than a corporation plans to issue initially to provide for the option of selling stock in the future.
Unissued number of shares is the number of authorized shares that have not yet been sold to date. If there is no treasury stock, the number of issued shares will equal the number of outstanding shares.
Common Stock - Common stock is the residual equity the "leftovers" of a corporation. Initial Sale of Stock - When a corporation sells stock to the public, the transaction must be recorded in the accounts of the corporation. When stock sales are made for cash, Cash is debited and Common Stock is credited for par value. Cash xxx Common Stock xxx Capital in Excess of Par Value xxx - In the case of no-par common stock that has no stated value, the total proceeds received at the issue are debited to Cash and credited to No-Par Common Stock.
The capital in excess of par value account is not used under these circumstances. Repurchase of Stock - Treasury stock is previously issued stock that is reacquired by the issuing corporation. When treasury stock shares are resold, cash is debited and treasury stock is credited reduced by the cost of the proportional number of shares resold.
If treasury stock is acquired and resold for the same amount, that is the extent of the journal entry. If the acquisition and resale amounts differ, additional elements appear in the journal entry. Capital in Excess of Par is credited for the difference. A gain results in an overall increase in stockholders' equity. Capital in Excess of Par is debited for the difference. If that account balance is not adequate to absorb this difference, Retained Earnings are reduced to the extent needed.
A loss results in an overall decrease in stockholders' equity. Preferred Stock - Combines some of the features of bonds and common stock. A major advantage that a corporation has over a proprietorship or partnership is that it allows individuals to participate in ownership by purchasing small amounts of stock.
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Kimmel and Donald E. Kieso , Hardcover, Revised edition. Kieso , Hardcover, Revised edition 4. About this product. New other. Make an offer:. Stock photo. Brand new: Lowest price The lowest-priced brand-new, unused, unopened, undamaged item in its original packaging where packaging is applicable.
Kimmel, Jerry J. Weygandt, Donald E. Kimmel NEW. Buy It Now. Add to cart. Sold by zuber Whether you measure classroom success by improved grades, students who are better prepared for the Intermediate course and their future careers, or by student evaluations at the end of the semester, Financial Accounting delivers real results.
Believe me I have looked. The supporting materials for instructors are] also terrific. This book is easy to understand, but is rigorous in its coverage of accounting issues. In addition, Financial, Managerial and Intermediate all flow together for greater coverage and comprehension. Chapter 1. Introduction to Financial Statements. Chapter 2. A Further Look at Financial Statements. Section 1: The Financial Statements Revisited.
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